Should you do AirBnb
North Texas Real Estate Tips
Short term rental websites like AirBnb are presenting a new set of options for homeowners. Whether you own a second home or a vacation property, renting out your home to a complete stranger can still seem somewhat odd. To many, the mere thought of someone using their property can seem foreign and inconceivable.
Still the concept of capitalizing on this extra revenue has sprung up a wide range of AirBnb like services such as FlipKey and VRBO, all with the intent of helping people find property to rent.
Have a second home or a vacation spot you want to rent out? Check out these carefully highlighted bullet points before you consider AirBnb or any other short term rental service.
Things to consider before you AirBnb…
1. Uncle Sam
Whenever you are considering a short term rental service such as AirBnb, it’s important to handle your paperwork first. Having the right approach to handling your records can give your tax representative a leg up on getting your taxes done right. When considering AirBnb, here’s the important factors to keep in mind when renting your property out.
Renting your home out for less than 15 days a year? Good news is you won’t have to report this income or pay taxes on it if it’s a residence! What determines if this property is a residence or a rental property? Good question!
Rental property vs residence – You’ll need to live in the home for more than 14 days a year or more than 10 percent of the total days that you rent the property out on an annual basis.
Although AirBnb and other short term rental services have skyrocketed in popularity, there’s still quite a bit of unstable ground when it comes to legality. The first issue is to of course cover yourself from a liability standpoint, whether that’s insurance or taking the proper measures to protect your property.
The second issue with legality can arise if you are buying property specifically to rent it out. Many municipalities are now taking active measures to prevent rental properties from being purchased. Depending on the area you are looking at, you may need a permit or license to rent out the property in question. Whenever you are looking at a specific AirBnb property to buy, make sure to check with the local laws to ensure there are no roadblocks.
4. Additional costs
Although turning to AirBnb could turn your property into a money making machine, you still need money to make money. If you are considering renting out your property, you may want to take out additional coverage or insurance to cover any potential accidents. Although Airbnb does provide free primary liability coverage, you may want to cover your bases a little further.
Don’t forget there’s a finders fee from these rental services such as AirBnb as well. All of these things are guidelines if you want to rent your property out, or if you are asking yourself “should I turn to AirBnb for my renting purposes?”
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