Make a Quick Buck Renting Out Your House on Inauguration Day, but Be Careful
With a crush of visitors expected this Inauguration Day, hundreds of area residents are advertising their homes as temporary -- and top-dollar -- rentals over the four days leading up to Jan. 20. It's a brilliant solution to the lodging shortage, but let's pause a moment to examine the potential for meltdowns.
Crises are almost inevitable given this volatile mix: amateur landlords renting out home-sweet-home, out-of-towners unfamiliar with the area, large sums of money, the absolute unavailability of hotel-room alternatives, and an emotion-laden, once-in-a-lifetime opportunity to witness history being made. Gee, what could go wrong?
Already hundreds of homes are listed on Craigslist as available for rent around Inauguration Day. Most appear to be people's primary residences, with the asking rents ranging from less than $5,000 to $50,000 for a four-day stay. Most seem to be asking about $20,000.
That's not to say they're going to get such large sums. This is an unprecedented occasion with unprecedented demand. Most folks are taking a stab at an asking price, and renters should feel confident trying to negotiate them down.
What renters will get for their money also looks to be a grab bag. I found one person offering a spare bedroom (and toothbrush space in the shared bathroom) for $1,600 for four nights. Now that's what I call bringing the electorate together. Most ads, though, offer the whole house or apartment, with sweeteners, such as airport pickup or a fridge or bar stocked to the tenant's specifications sometimes thrown in.
In other locations, some homeowners vacate their homes regularly for high-demand annual events, such as the Masters golf tournament in Augusta, Ga. And if it goes well for you this January, it might be something you consider doing again for future inaugurals, or even for the Cherry Blossom Festival each spring and Independence Day each July.
Just keep it businesslike, and no one should get hurt.
There's no reason not to handle it like a business transaction. If, by chance, you were thinking about keeping your deal an all-cash, no-contract affair so the Internal Revenue Service wouldn't lay a tax bill on you, think again. The IRS doesn't care about rentals of 14 days a year or less. You don't even have to report the income. (You don't get to deduct any business expenses related to the rental, either.)
Free-flowing information between landlord and renter is going to be key to making the deal work. Both parties benefit from getting a contract signed, and from having full payment made before the big day arrives.
Most, but not quite all of the information, needs to be packed into your advertisement. Renters need to see photos -- lots of them -- to decide whether they want to spend thousands of dollars on the digs you're offering. They're trying to decide if your home will be comfortable and worth the price. They're also trying to guess if you're going to be a reliable business partner -- or a flake who could ruin their big weekend.
If you advertise through Craigslist, there's no excuse not to post interior and exterior shots of the home, including the all-important bedrooms, bathrooms and kitchen. Craigslist doesn't charge for posting photos, so I can't fathom why so many people advertising their inauguration rentals haven't bothered to include them. Take some of the knickknacks out of the shots so it doesn't look like renters will be crashing at grandma's house for 20 grand.
Too many of the Craigslist posts disclose the landlord's exact address. That's a big mistake; you're telling all the world that your home has lots of goodies like flat-screen TVs -- and that you won't happen to be living there Jan. 18-21. Your ad should specify only the general neighborhood, with details on the distance to Metro, restaurants or highways. You can reveal the exact address after you've entered negotiations over the phone or e-mail.
When I last checked, there were more than 500 inauguration rentals posted on Craigslist. Way too many of them had way too little information to entice an out-of-towner who doesn't know Mount Vernon from Mount Pleasant. Flesh out these ads with more details about the comfort and convenience of your home, and back up the claims with all those attractive photos I've been harping about.
It costs more, but if you want to reach out to travelers who regularly search for private homes as lodging, you could sign up with http:/
Christine Karpinski, who works for the Homeaway organization and is author of "How to Rent Vacation Properties by Owner," said it's crucial that you collect all the rent and security deposit two weeks before the renter arrives. That way, you don't have to bother about checking renters' credit. "A bounced check is your best form of insurance," she said. "If it bounces, you don't want them in your house anyway."
She noted that Paypal makes it easy for your renters to pay by credit card. You can send your renter a Paypal invoice by e-mail, and the service will cost you about $220 on a $10,000 invoice. It offers a buffer of protection (and financial privacy) for both renter and landlord that simply isn't available when landlord and renter swap bank-account numbers, as you inevitably do when paying by check.
Give your homeowners insurance company a quick phone call before January just to confirm that you're covered for property damage and liability claims during a temporary rental. It shouldn't be a problem. For example, Allstate spokeswoman Kate Hollcraft said that temporary landlords insured by that company would be covered as usual. But their tenants' personal property (such as luggage, clothes and cameras) would be covered under their own homeowners or renters policies.
Before your renters commit their cash, you need to be explicit about what amenities and restrictions they can expect. If you object to your renters hosting a weekend bash, for example, spell that out in your ad and include it in the lease. Your expectations about smoking, pets, additional guests and trash removal need to be detailed.
Don't forget that your renters deserve and expect a comfortable stay. Lock your personal stuff away in a closet -- or take it wherever you relocate during the stay. "Anything you leave there would be fair game for them to touch," Karpinski said. "It's really your responsibility to put things away." Mementos, medicines, weapons, credit card bills, business records, lingerie, delicate electronics -- put them under lock and key unless you're comfortable with the idea of strangers rifling through them.
If you're supplying towels and bed linens, consider buying a new set if yours aren't nearly new and spotless. Clean out the fridge.
And if you're planning to take a little vacation of your own while renters use your place, make sure someone is on call to handle middle-of-the-night crises. After all, isn't preparedness for the 3 a.m. phone call one of the things the election was about in the first place?
E-mail Elizabeth Razzi at email@example.com.