By Rita Steele
AirBNB and similar vacation rental portals have changed the game in real estate investment property. The benefits of renting your home or investment on AirBNB are many, and trend conscious property owners are jumping into the market head first. As one of the first brokers to create and popularize short term furnished accommodations on Providence’s East Side, I of course love this trend, and my own personal travels have centered on adorable home-away-from-home finds worldwide. But knowing the risks and common pitfalls that arise within this industry is a must for those who endeavor to be successful at it.
“If you vet your prospective guests correctly and manage expectations you will have a positive experience,” Heatheran Kristopher, SRCI International Consultant, explains. Things get riskier when an incoming guest has never tried AirBNB housing before and they don’t know what to expect from the process. She stresses that “giving those guests attention upfront is a must to ensure that they have a pleasant experience.”
Check your Homeowners and Liabilty Insurance.
Before renting out property homeowners need to check in with their insurance agent. “The insurance industry has not caught up with the latest trends in technology and real estate,” James Steele of S&T Insurance explains. “Nine out ten times policies have strict exclusions for short term rentals. Most homeowners insurance policies carry a Business Pursuit’s Exclusion, and liability falls on the homeowners. While AirBNB offers trip protection to its users, make sure to consult with your insurance provider. Insurance is complicated and waiting until you actuality have a claim is not the best time to sort out what your coverage is.
Condo Owners and Tenants.
So. Chances are, your condo docs or your lease prohibit short term rentals and/or subletting. Read through your condo documents or your lease carefully.
Compared to other Cities and States, Rhode Island is generally relatively accepting of AirBNB rentals. (Yes, they are taxed..so is everything else). But make sure you know your local laws. For example, in my neighborhood in Newport we are not permitted to accept a rental term of less than one month’s duration. (We are also not allowed to have a bonfire but that is another story).
From the income potential to the incredible cultural experiences, AirBNB and the like open up traveling and the ability to earn extra cash to a lot of people. Done right, it is a great experience. If you have questions about how to get the most out of your AirBNB experience, contact Heatheran at firstname.lastname@example.org.