What Is the Better Option: Renting or Selling Your Home?
If you're a homeowner looking to relocate, you might consider renting out your current home instead of selling it. A short-term rental (STR) is often offered as an alternative to a hotel and has become a popular investment in recent years.
While a short-term rental may seem appealing, the reality of being responsible for one may be tough to accept. Here are some of the difficulties you may encounter if you rent out your home rather than selling it.
A Short-Term Rental Comes with Responsibilities
It takes a lot of time and work to successfully manage your residence as a short-term rental. You'll have to deal with reservations, organize check-ins, and handle cleaning, landscaping, and maintenance jobs. Each of these can be taxing on its own, but when combined, it's a lot to handle.
Because new guests check in and out regularly, short-term rentals have a high turnover rate. Because of the increased wear and tear on your property, you may need to make more regular repairs or replace your furnishings, fixtures, and appliances more frequently.
Think through your ability to make that level of commitment, especially if you plan to use a platform that advertises your rental listing. Most of them have specific requirements that hosts must meet. An article from Bankrate explains:
"Managing a rental property can be time-consuming and challenging. Are you handy and able to make some repairs yourself? If not, do you have a network of affordable contractors you can reach out to in a pinch? Consider whether you want to take on the added responsibility of being a landlord, which means screening tenants and fielding issues, among other responsibilities, or pay for a third party to take care of things instead."
There are numerous factors to consider before converting your home into a short-term rental. If you are not prepared to put in the effort, it may be better to sell.
Short-Term Rental Regulations
As the short-term rental sector grows, so do the restrictions. Limits on the number of holiday rentals in a given area are frequent legal restrictions. This is especially true in larger cities and tourist areas, where there may be concerns about overpopulation or housing shortages for permanent residents. There may also be limitations on the type of property that can be utilized for short-term rentals.
Many cities also require homeowners to obtain a license or permit before renting out their properties. Nick Del Pego, CEO at Deckard Technologies, explains:
“Renting short-term rentals is considered a business by most local governments, and owners must comply with specific workplace regulations and business licensing rules established in their local communities.”
Before considering renting out your house, you should extensively investigate if short-term rentals are regulated or restricted by the local government and your homeowners association (HOA).
Converting your house into a short-term rental is not a decision you should make lightly. Let's talk today about if selling your home is a better option.