Rental Risks You Could Face This Summer
Considering renting a beach-house this summer? Summer is the prime season for rental homeowners to make some extra income, especially in vacation hotspots like Florida and California. According to Airbnb, reservations in Destin, FL are up 232% from this time last year. Before venturing into the short-term rental market, consider these five common risks hosts face.
- Homeowners Insurance – standard homeowners insurance policies do not cover losses the homeowner can incur from inviting rental guests into their home. Short-term rental insurance is usually available at an additional cost.
- City Ordinances – due to the popularity of services like Airbnb, many cities have additional requirements for hosts. New York City, for example, taxes short-term rental hosts and imposes other zoning laws.
- Homeowners Association Compliance – many homeowners associations prohibit short-term rentals. Some cities also have rent control or rent stabilization laws that may apply.
- Liability Insurance – this insurance protects the host in case a guest is injured while on the property. Services like Airbnb offer host protection insurance, however specific liability policies may be beneficial.
- Mortgage Contract – some mortgage contracts forbid short-term rentals. Violating this contract could have long-term impact on the homeowner like hefty fines or other consequences.
Rental property owners who do their homework will set themselves up for success this season. Before renting any property, its best to research any legal issues that may complicate the process.