In the United States alone, the vacation rental industry is estimated to be worth about $100 billion. It’s never been easier for vacationers to find a comfortable, turn-key condo or house to rent while homeowners and even renters can cash in on the industry by renting out their home for a few days or weeks at a time. Are you thinking about getting in on this growing industry? Here are eight great reasons to rent out your home to people looking for a vacation rental.
1. You don’t need to live in a major city or destination
While you can likely set higher rates if you live very close to an in-demand vacation destination, beach, or large event, this isn’t necessary to make money by turning your home into a vacation rental.
Vacationers rent condos and homes for many reasons, including visiting with family, attending a wedding or reunion, or connecting with nature. Sometimes all people want is privacy and a quiet atmosphere, even if your home is an hour from popular attractions.
2. Your home has what travelers are looking for
You may be surprised to learn that travelers aren’t usually looking for a luxury home on the beach; what they want is what hotels can’t provide:
- More living space
- Better amenities
- Lower rates
- An at-home experience while on vacation
Yourent.com said, “Vacationers want to feel at home and comfortable when they travel and staying in a cramped hotel room certainly doesn’t lend itself well to this atmosphere.” With a vacation rental, travelers can enjoy amenities like a washer and dryer, a kitchen, and possibly a pet-friendly layout with a fenced backyard to make the most of their time in your area.
3. There may be tax benefits
Turning your home into a vacation rental means running a business. While you need to pay taxes on the rental income if you rent your home for more than two weeks a year and you may have local tourist taxes, you can also deduct many expenses of renting out your home.
Tax rules can be very complicated, especially when you rent out the home that is also your primary residence. Still, you can potentially deduct rental expenses like mortgage interest, property taxes, depreciation, marketing expenses, cleaning costs, repairs, professional property management, and more.
4. Demand is on the rise
While just 7% of survey respondents planned to stay in a rental home in 2014, demand increased to 60% just one year later. Demand for vacation rentals is now outstripping demand in many areas of the United States, offering a great opportunity for property owners. If you live in a metropolitan area, demand is especially high for vacation rentals for groups and families.
5. You won’t be locked in
If you aren’t sure if renting out your home is right for you, you don’t need to worry about getting locked into a contract or paying high fees. Many booking sites that connect property owners and travelers use a per booking fee that gives you an easy way out if you aren’t happy with how it goes. You can choose to try it out for a few weeks or months and see how many bookings you get before deciding if it’s the right move for you.
6. You may live in a high-demand city
If you live in or near an area in which demand outstrips supply, you will have no problem finding paying guests to stay in your home while earning a substantial amount of money. The most in-demand cities with average weekly rental rates include:
- Kissimmee, FL: $1,029
- Orlando, FL: $1,235
- Gatlinburg, TN: $1,228
- Davenport, FL: $674
- South Lake Tahoe, CA: $1,252
- Panama City Beach, FL: $1,258
- Myrtle Beach, SC: $732
- Las Vegas, NV: $1,277
- Pigeon Forge, TN: $1,215
- Big Bear Lake, CA: $1,223
- Galveston, TX: $1,203
- New Orleans, LA: $1,892
- Los Angeles, CA: $1,906
- Nashville, TN: $1,365
- Gulf Shores, AL: $963
- South Padre Island, TX: $1,385
- Destin, FL: $1,278
7. It’s easy to get started
Putting your home up for rent to travelers isn’t as complicated as you may think. A number of booking websites make it easy to start an account, post a listing of your home, and begin receiving booking requests directly from travelers. You’ll usually pay a flat rate for the service with the option to put more money in for better marketing. You can also easily screen potential renters and arrange for details like cleaning service or property management with little know-how.
8. You can pay your mortgage!
On average, homeowners charge $217 per night for a vacation rental with their home made available to renters for 32 weeks a year. With a standard weekly rate of $1,520, this means the typical rental owner earns $84 an hour renting out their home. If you rent out your home for just 18 weeks a year, you can cover over three-quarters of your mortgage! Even if you don’t plan to rent out your home more than a few weeks a year, renting your home to travelers can put a significant amount of money in your pocket.
