Renting or Selling Your House: What’s the Best Move?
If you’re a homeowner planning to move, renting or selling your house may be on your mind. Short-term rentals (STR) are an increasingly popular form of investment as an alternative to hotels.
Renting out your house may be tempting, but you need to consider the challenges involved compared to selling. You could face difficulty in managing tenants, unexpected costs for maintenance and repairs, less income than expected due to taxes or tenant damage, legal requirements for rental agreements and landlord-tenant laws, and more responsibility for ensuring a safe environment for tenants.
A Short-Term Rental Comes with Responsibilities
Managing a short-term rental requires time and effort. You’ll need to take care of reservations, check-ins, cleaning, landscape upkeep, and maintenance tasks. All these duties can be demanding on their own, but when combined they form a huge workload.
Short-term rentals often have a frequent turnover of guests. This traffic can lead to more wear and tear on your property, potentially requiring you to make repairs or replace items more often.
When deciding between renting or selling your house, consider the level of commitment required. If you plan to advertise a rental listing, research the requirements for hosts set by the platform. Bankrate has more information on this issue:
“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 paying for a third party to take care of things instead.”
If you don’t feel prepared to take on the responsibility of running a short-term rental, then selling your house may be a better option.
Short-Term Rental Regulations
It’s also important to understand the legal implications of renting or selling your property. Laws vary from state to state, so it’s crucial that you research local regulations before making any plans. You may need to obtain certain permits or licenses or adhere to particular zoning ordinances and safety requirements. Furthermore, if you’re renting out your property, you’ll need to consider insurance coverage for tenants as well as liability for the owner.
More regulations are in place as the short-term rental industry grows. Cities and tourist destinations may limit the number of vacation rentals due to overcrowding or housing shortages. Also, restrictions may apply to what type of properties can be used 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 renting out your home, be sure to check the regulations put in place by both the local government and your homeowners association (HOA).
Bottom Line
In conclusion, renting a home as a short-term rental is an attractive option for homeowners looking to make a move. However, it’s essential to understand the responsibilities and regulations involved before taking on this investment. If you’re unsure of whether renting or selling your house is the best move for you, speak with a professional who can help guide you through the process. Whether you choose to rent or sell, it’s important to do your research and make an informed decision that best meets your needs.