Five Things to Consider Before Renting Your Home to Vacation Renters

Renting your home either to short term or long term renters means you are effectively running a business. You may find yourself subject to rules and regulations that did not affect you as a homeowner but will as a business owner. There are many things to take into consideration as you begin your business. Here are five key items to keep in mind.

  1. Licenses and Permits – Many towns, cities and/or states require that homeowners renting their properties obtain a business license or permits. In most cases, you can find the information online along with the necessary forms. Check with your tax accountant or municipal websites for more information.
  2. Sales Tax – You most likely will be required to collect sales tax from your guests and remit it to the local taxing authority. Consult with your tax accountant. Always remember to remit taxes in full in a timely manner.
  3. HOA Rules – If your property belongs to a homeowner’s association make sure you are in compliance with their rules. Also, make sure your guests are aware of any rules that they must comply with.
  4. Insurance – Make sure your insurance company is aware that you are renting your home to short-term guests. Yes, your rates will probably go up, but in the event of a claim, you would not want to find your policy canceled because you had not made the disclosure t your insurance company. You will want to be sure you have adequate liability coverage in the event one of your guests has an accident.
  5. Safety Requirements – When you rent your home to short-term renters, you may find that your home is required to meet safety standards beyond those of a residential property.

As with any venture you should always seek the guidance of a professional, such as an accountant, to be sure you are in compliance and are taking advantage of any tax breaks you may be entitled to.