Thanks to websites such as AirBnB and VRBO, homeowners can now easily rent their homes, spare rooms, or basements to interested out-of-towners looking for a place to stay.
The procedure is fairly straightforward – and can be profitable when managed properly – but it isn’t always as simple as just posting your available property.
Let’s take a look at seven things you should consider about before putting your home on a short-term rental site. And remember, if you’d prefer to just sell your property instead, we’ll help you find a REALTOR® on Vancouver Island, BC right away!
Understand Your Options
By now, most of us are well aware of the rental site AirBnB. They are one of the largest and most reliable online marketplaces and lead the way when it comes to renting out your home. But that doesn’t mean they are the only ones.
While all four function in very similar fashions, you may find that one meets your needs better than the rest. On the flip side, you could end up posting to multiple short-term sites: a savvy-move for those looking to rent their place out as often as possible.
Learn the Law
As short-term rental sites have increased in popularity, so too has their share of controversy. For instance, some parties have argued that this industry threatens the livelihood of hotel workers, while others are worried that they aren’t properly sanctioned or certified.
Whatever the case may be, it’s important you keep up with your local by-laws. Some cities have enforced restrictions surrounding the practice or require you to register and/or obtain a license before accepting guests.
As per the Canadian Revenue Agency, any income earned by renting out your home is considered to be rental income and included on your tax return. Fortunately for you, you can deduct your expenses.
And don’t forget about the GST you might have to collect and remit (pay to the CRA) once you start using your home to generate income. The CRA says short-term rentals of less than one month are subject to GST, but the total annual revenues of that business must be $30,000 or over for that to apply. Additionally, once you start using your home for business purposes, there may be GST implications when you decide to sell. Tax rules can get messy so be sure to visit the CRA’s website for exact rules and regulations.
Check out this article from TurboTax for more information regarding short-term rental income.
Consider your Ongoing Expenses
If you plan on hosting guests on a regular basis, make sure to consider the ongoing expenses, such as soap, toilet paper and cleaning supplies. If you’re hoping to save some money, it’s your best bet to buy everything in bulk, as most guests won’t worry themselves about being wasteful.
Vet Your Guests
Most short-term rental websites will provide you with a rating system that will allow you to vet your guests and weed out those who may seem troublesome. Sites such as Airbnb put the power in your hands, meaning you don’t have to rent to anyone if you don’t like the way they sound.
Be a Good Host
Remember, your guests are here for a good time, and although they may not mind to stop and chat, usually they’ll appreciate some personal space. Once you’ve shown them their room, home or basement, let them know that you’ll be around if need be. Otherwise, stay out of their hair.
Keep An Eye Out For Reviews
In the same way that guests can be reviewed, so too can those renting out their homes. If you’ve done a good job – provided personal space, a comfortable home and other amenities – chances are it will reflect in your online reviews. Not only is this a great way to attract new business, but if you’re interested in ways to improve, it will work as a valuable resource.
If you’re sitting on a ton of unused space, carefully consider whether or not you’re ready to put your home on a short-term rental site. This is your opportunity to open up a secondary source of income and live the kind life you want! For more great content, check out the Pemberton Holmes blog.