RentalsTechnology

How to soothe 5 common fears about renting a home short term

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Are you set up for success in 2016? Join 2,500 real estate industry leaders Aug. 4-7, 2015, at Inman Connect in San Francisco. Get Connected with the people and ideas that will inspire you and take your business to new heights. Register today and save $100 with code Readers.


Takeaways:

  • Short-term rentals are becoming increasingly popular.
  • Clients thinking about renting homes short term might be hesitant or uncertain whether the market is right for them.
  • There are more and more tools to help owners through the rental process. Here’s how to address those concerns.

When searching for a place to stay during a trip, travelers looking for somewhere other than a hotel are increasingly having great success with homes listed as short-term rentals.

The rapidly increasing number of travelers seeking home rentals is contributing to a limited supply of available home rentals in a growing number of popular cities.

Home rental site HomeAway recently found that the top vacation-home rental cities across the globe are major urban centers such as Los Angeles, Rome, New York, Paris and Miami, followed by London, Barcelona and San Francisco.

This option is wonderful for tourists looking to stay in the world’s top cities and the best locations at a reasonable price. Also, travelers get to feel what it’s like to live as a resident in that city.

Gain a massive competitive advantage with a modern RE CRM
3 reasons you need to replace your dumb CRM with a smart one READ MORE

Homes in these cities are in high demand, and residents have an opportunity to capitalize on this growing marketplace and make some extra money.

It’s possible you have clients who are already doing this and others who are contemplating renting or even selling their second homes.

However, the clients who are thinking about renting their home might be hesitant to list it as a rental, and they might be uncertain as to whether the vacation-home rental market is right for them.

As a way to address the potential anxiety of your clients about entering the home rental marketplace, I’ve listed some commons concerns expressed by potential vacation-home renters and corresponding “fear nots” to help put their minds at ease. The “fear nots” are ways you can address your clients’ questions — think of it as almost a script.

Concern: “I don’t know where to start, how to best list our home, price it or which websites to use.”

Fear not: If you use any of the major listing sites, such as Airbnb, HomeAway or VRBO, and the property is listed and priced appropriately, you will most likely get bookings.

Also, by taking a look at a few of the other homes listed in your area, homeowners can gauge the appropriate listing price for their home and location.

You can list your property for a commission on all of the major sites, and pay fees only once you have a booking. These commission-pricing models can be a good way to try these websites risk-free.

The website either handles or makes it easy to collect money from your guests with the payment tools provided. They can also make it easy to include photos, maps and locations, update information and provide tools to communicate with guests throughout the booking process.

Concern: “Renting out my home seems scary, and I’m worried about renters damaging our home.”

Fear not: Given the occasional stories in the news about damages done to rental homes, there can be an enormous misconception by people not familiar with our industry.

Some stories can be sensational, and they are exceedingly rare. Most guests are not those who party a lot. They are usually professionals if the home is a smaller property and families or extended families if the home is a larger property.

Guests are often groups in town for an event, graduation, wedding, conference, etc. The vast majority of guests will honor and respect your home — they are mature adults.

Guests are likely to be educated, affluent or families with discretionary income to rent your property. If you are worried about the small stuff, put a lock on a designated closet or two to keep personal belongings locked away and secure.

Most renters are paying to rent a home for a reason — they know they are liable for any damages and as mentioned, are not looking to cause problems or disrupt the home.

Concern: “I don’t want to get into legal trouble. The taxes and compliance issues seem confusing and complicated.”

Fear not: Yes, understanding lodging tax, registration and licensing requirements (and how to stay compliant) can be confusing and complicated. The good news is that owners don’t have to figure it out themselves.

HomeAway and VRBO, for example, have tax centers that help point rental owners in the right direction and provide information about the tax rules and requirements.

For owners who need more help figuring out lodging tax and licenses — Avalara MyLodgeTax can manage all tax and license requirements for $10 to $15 per month.

HomeAway and VRBO are partners with MyLodgeTax, but many customers from all websites use MyLodgeTax to manage all taxes and licenses. MyLodgeTax will guarantee you are fully compliant and make sure all the paperwork and filings are completed correctly.

Concern: “What if my guest has questions about fun things to do during their stay? Or what if there is a problem like a pipe bursting, a clogged toilet or the guest is demanding?”

Fear not: Travelers are visiting the city of their choice for a reason and with useful tools such as HomeAway’s new Cities home page, they can browse through recommendations of the best activities, restaurants and attractions in the area.

If you have a maintenance problem, you can call a professional (plumber, heating/cooling, handyman, etc.), and they will fix the problem, just like you would in your own home.

You can work with your guest to make up for any inconvenience it might cause. Again, this marketplace is targeted toward mature adults, and guests will likely be sympathetic about the plumbing or another issue in the home.

One caveat: They are sympathetic as long as you are working hard to solve the problem and working with them to remedy the situation, such as a refund for a night or two.

Concern: “I’m afraid the work I have to put in will outweigh the benefits or money I can make.”

Fear not: The effort is not as much as one might think, and the rent might easily be tens of thousands of dollars. The major rental websites offer numerous tools and partners to simplify the process.

Renting on these websites is getting easier and easier. They have tools to manage the collection of money, contracts and calendars.

Also, HomeAway and VRBO have integrated partners such as Evolve Vacation Rentals or Turnkey Vacation Rentals. Both of these companies will do all the heavy lifting to create your advertisement, rent the property and handle the funds.

They charge a commission to handle it, but for busy owners or owners who are not interested in full management, it is an excellent option.

There are more and more tools to help owners through the rental process, whether your client is a seasoned pro or wants full-service management. Either way, now you can educate your clients on their options.

Finance expert for the rapidly growing short-term lodging marketplace, Rob Stephens co-founded HotSpot Tax in 2002 out of his own necessity to understand and manage compliance with his rental property.

Email Rob Stephens.