Short-term home rentals have become a popular way for homeowners and even renters to receive supplemental income. Many services, such as Airbnb and Vacation Rentals by Owner (VRBO), have become quite popular in the Washington area, especially in high-density areas that are walkable to the Capitol and downtown.
Thinking about renting out a room or property online? While hosts can receive well over their mortgage each month in rental income, there are precautions you should take when inviting strangers into your home.
Here are a few do’s and don’ts to consider:
Do know the laws in your city and community.
Every state and most major cities have rules regarding home-sharing. From limitations to how long guests can stay to rules about occupancy of your property, it is important to first understand the rules of your community before becoming a host.
In the District, you will be required to get a Basic Business License (BBL) for each property being rented out. If you live in a condo, it would be wise to check your condominium documents for any restrictions on short-term rentals in the building. Most condominiums have some kind of language that requires a minimum lease of 12 months, which keeps many condo owners from short-term leasing.
It’s also important to note that the laws around short-term leasing of property are constantly changing. A recently introduced D.C. Council measure would restrict home-sharing. Bills such as this have popped up across the country to combat increasing problems with home affordability.
Don’t expect high returns for little input.
Renting out your home on a short-term basis requires time. Many homeowners might dabble in Airbnb a few times, but for those who continue to host at their home, expect to put in the time and attention to detail.
Yes, hosting a rental at your home may cover part of your mortgage. However, developing your space to cover these costs will also take some time as you have repeat guests, build up positive reviews and prepare your house to host guests.
Many headaches for first-time hosts come from there being little preparation. Do not expect to wake up one morning and simply leave the house before guests arrive. Instead, it is important to provide some resources in the expectation that they will pay off in the long term.
Do set your house up like a hotel.
Providing for your guests should be your top priority as a host. Many soon-to-be hosts may not be equipped for short-term renters. For example, having adequate supplies for your guests is key, both for service and their future reviews. Small toiletries, fresh linens and towels, and other convenience items set you apart as a host, but these items may not come naturally to every homeowner.
Also, consider getting a smart lock on your home so you can monitor everyone coming in and out of the house — from guests to housekeepers to handymen. This is much easier than hiding a key or risking the loss of a spare.
Don’t ignore your neighbors.
As a rule of thumb, try to be discreet yet up front with your neighbors if you are going to host many different groups through Airbnb or other services. There have been many cases of disputes among hosts, their neighbors and guests that have resulted in court cases.
Many hosts have approached their neighbors to inform them of their hosting practices in the event the guests become noisy or a disturbance. Instead of contacting police for noise complaints, some homeowners would prefer to be the primary point of contact before trouble arises.
Do hire people you trust.
Of course, there are companies that will manage your entire home for rentals, but these come at high costs. Most homeowners believe in managing their own rentals but often have difficulty managing the people in and out of the house.
After your guests leave and before hosting new guests, most hosts will hire a cleaning service, laundry service or a team to manage their home before guests arrive. This obviously comes at a cost. Moreover, shopping for services may come at a lesser quality for some providers.
Set up a good infrastructure for these basic services. If employing a maid or a handyman, repeated service is likely to get you discounted costs as well as better performance.
Don’t make your home into a party house.
One practice that surprised me was renting out your home for just one night at a time, especially to local residents who may host a party there. As the homeowner, you set the policies of your home, and it may be important to set policies for noise, guests and parties.
One way to navigate this would be to require a certain number of nights required to share your home. Homes that require only a single-night stay may fall victim to guests who just want to party in your space and then leave.
Continuing the trend of being a good neighbor, houses that become party central tend to get shut down by neighbors quicker than longer-stay housing hosts.
Tim Savoy, a real estate agent with Coldwell Banker Residential Brokerage Capitol Hill, writes an occasional column about the Washington-area housing market. Tim can be reached at email@example.com and on Twitter @SavoyRealEstate.