There has been something of a shift in the vacation property rental process over the last couple of decades. Previously, renting a vacation home would normally involve some sort of pre-planned rental community. The property somebody would rent would be located somewhere full of rental properties, or the tenant would even rent directly from that community.
Things like AirBnB have changed this somewhat. Now it is possible to rent a property anywhere and from anyone. However, the old style does still exist and comes recommended in many circumstances. REMAX Hot Spring Village, Arkansas, is a resort made up of privately owned rentals. They say it is the vacation community, as much as the property itself, that attracted vacationers.
However, there is no doubt that it’s a new world where renting a vacation property is concerned. At the very least, improved communication and information technology has meant that people are coming from far and wide to rent a given property.
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New People and Places
The effect of this has been a much wider geographical dispersal of those persons owning a vacation property, those persons renting it, and the location of the property itself. This means that many involved in the process can be far off, not familiar with the local economy or laws – and can therefore make mistakes.
Of course, the process of renting out a vacation property has been around for long enough that there is still a set body of wisdom regarding how to go about the process. Things haven’t been completely overhauled. But then, many of the classic mistakes continue to be made too!
Most Common Mistakes
It might be better, therefore, to talk about the most common mistakes made by those renting out a vacation home. The best way to start doing things right is to stop doing things wrong. By covering these bases, you will already be well on your way to taking a cautious yet effective approach to what can be, at times, a pretty complicated process.
Here follows then the most common mistakes made by those renting out a vacation home:
Ignorance of the Local Laws
When it comes to the short-term legal market, the laws governing it can vary a lot depending on where the property is located. This can sometimes be disastrous, as those seeking to rent out on a short-term basis might learn (only too late) that there are byelaws restricting or even prohibiting this. There are also the local safety regulations to satisfy as well, as the safety of the property becomes your responsibility.
Failing to Consider Tax
Things get trickytax-wisewhen you own a second home, never mind planning to rent it. Mortgage interest deductions on loansin particularis capped at a threshold amount on the total value of your property’s, which has implications for the deductions you can make on your vacation home. There are many other specific tax requirements, and a professional accountant should certainly be enlisted to work out what these are and how they apply to you.
Failing to Consider the Dynamics of the Neighborhood
If your rental property becomes a revolving door of tourists, then it is quite possible that some long-established members of the community might not look kindly on this. Such neighbors (who, after all, are not really your neighbors) might be quick to report nuisances to the authorities, which can make your rental suddenly appear very unattractive. The best advice is to speak to these people first.
Such are the most common mistakes around the rentals market today. Following the advice here means you can stop making them today.