SHORT TERM RENTALS
How To Make VRBO & Airbnb
Work For Your Family’ s Cabin Or Seasonal Home
BY: STEPHEN SWANSON
Short-term rentals are a wonderful way to generate income and expedite mortgage payoffs. They could also be your start in real estate investing.
Peer-to-peer rental platforms have grown exponentially over the past decade. We continue to see them expand over the years into many different outlets, from companies like Turo, which offers peerto-peer car rentals, to Swimply, which facilitates the short-term rental of your pool.
Many of us are familiar with the platforms of companies like VRBO and Airbnb. They are the two most common providers that assist with short-term property rentals. Frequently, people look to these options to generate income on their seasonal homes and cabins. It naturally lends to a vibrant market for families looking to spend a week or a weekend on the lake or find a secluded cabin in the woods away from the hustle and bustle of the city.
As short-term rental platforms continue to reshape how families approach real estate and supplemental income, it is essential to weigh the unique opportunities and challenges they present for homeowners.
What do you need to know before deciding if short-term rental is right for you?
The most important thing to consider is that you are significantly expanding your liability exposure. Others will be at your property enjoying themselves; parties may be involved, alcohol may be consumed, and general risks abound with access to lakes, docks, boats, ATVs, etc. In addition to the added liability, there is also the property itself.
Renters typically don’ t take the same level of care as you would when it comes to your property. Are you willing to deal with the cost you could incur for damage to your home? These are all factors to consider.
Once you’ ve considered the potential risks and responsibilities, the next step is to explore how to safeguard yourself and your property.
If you believe a short-term rental is suitable, how can you protect yourself adequately?
It is essential to understand that not all insurance carriers will offer coverage for short-term rental exposure. You should verify with your current carrier to determine if they can add the necessary endorsement to provide coverage.
Additionally, there may be conditions that must be met for the endorsement to be applied. Often, many carriers prefer to see that the home is not rented for more than
50 % of the year, or it may only permit incidental rentals.
However, not every insurance provider can accommodate short-term rental arrangements, so you may need alternative solutions.
What are your options if you do not meet the carrier’ s conditions, or if they do not offer coverage?
Don’ t get discouraged. You can explore a couple of options to ensure you are protecting your family.
First, you can seek proposals from other carriers that provide the necessary coverage.
Second, Airbnb and VRBO offer an additional policy that specifically provides liability and property coverage while renting the property. Be aware that if you obtain a policy directly through them, you will still need to maintain your current home policy, and you should confirm that your carrier is willing to keep your policy in place, even if it is expensive.
After identifying a suitable insurance option, ensuring your coverage is comprehensive and tailored to your needs is essential.
Once you determine where to secure coverage, what should you have in place?
12 • NesbitAgencies. com