Thanks to today’s online and cell phone technology, pretty much everyone has the opportunity to be a landlord. Using services such as Airbnb and HomeAway, you can rent out your home to travelers visiting your community. Interested? Let’s take a look.
Ask questions. Do you live in a neighborhood with a homeowners association? If so, check your neighborhood rules to see if short-term rentals are allowed. If so, are there any restrictions? Next, check with your municipality. Your city or town may not prevent short-term rentals, but may have rules governing them and may also require you to pay a percentage to the city in what amounts to a hotel tax.
Treat it like a business. It’s a good idea to weigh the costs and commitment versus the income you’ll make renting out your home. Opening your home to strangers is a considerable amount of work. Cleaning before and after guests, providing keys, having valuables locked away, and providing amenities to your guests all take considerable commitment on your part. Don’t forget to figure in the fees you’re required to pay Airbnb or another rental service company to advertise your home.
Let’s talk taxes. Find out if your municipality levies a tax on short-term rentals. If you only rent your home out once per year for a special event, you may not face taxes. The same goes for federal taxes, but the rules are complicated so it’s always best to consult your tax adviser and read this IRS publication.