Savvy Income Sources: Use Your Home as a Vacation Rental

Make Money From Your Home!

No, this isn’t a paper sign posted on the side of a highway. I’m referring to ways that savvy homeowners can use their home to earn extra money, take nice vacations, and meet friends along the way. There are four effective ways to do this–and none of them involve moving out, I promise! I’ve been applying all four methods to great effect, and I’m more than happy to share all the details. This advice is based on my own personal experience of what works and doesn’t work–you may want to tweak things to work best for you. The key is to find what jibes with your personality, lifestyle, and your home.

Today we’ll cover Savvy Income Source #1: Vacation Rentals.

You may know people who shun hotels when they travel. “We like to live like the locals,” they say. People like this usually rent apartments in the cities they visit. They’re able to cook at home, make tea at any hour, and enjoy a more residential (and tipping-free!) experience.

Doesn't this cabin in Oregon look like a great place for a getaway? (click image for more info)*

Well, what if your home was the vacation apartment these travelers stayed in? Is this too far fetched an idea? You live there and like it, don’t you? You probably chose to live there for a specific reason–you like being in the center of everything, or close to hiking trails, or near a hip strip of restaurants–and whatever appeals to you will likely appeal to someone else.

The concept is this: whenever you know you’re going to be out of town, simply make your apartment available to travelers who are seeking a place to stay. You’ll make money while you’re gone, and if you do a good job screening people and setting house rules, your place will be undisturbed when you return.

It might sound crazy to open your home to strangers, but think through that reaction. What are you specifically afraid of? That they will touch your stuff? Break something? You can collect a deposit to cover damage, so that takes care of breakage. As for a fear of people touching your stuff, the question is whether you want your stuff to run your life. Paual Graham writes a great treatise on the tyranny of stuff that helped put things in perspective for me.

No matter the size or shape of your home, you can find vacationers who want to stay there. One Vermont couple rents out their tree house! (click image for more info)

How to find vacationers: The classic sites for home rentals are VRBO.com and HomeAway.com. While these sites have tons of great listings, the user interface leaves much to be desired. Plus, you have to pay to post your home (but not to rent one), so it’s not a cost effective proposition if you only rent your home out on weekends here and there.

I much prefer the new startup AirBnB.com, which is more community-based, with profiles of owners and vacationers. AirBnB has listings for anything from couches to full vacation homes all over the world. I’ve enjoyed many successful AirBnB transactions from both sides of the equation, and it’s been great every time. They charge a fee only when you complete a rental, and they process the transaction for you, so renters can use a credit card. You, the owner, gets paid 24 hours after the rental period begins; this allows the renters to complain and withhold payment if the property is different than described. Note that you’ll have to make separate arrangements for a security deposit, as AirBnB doesn’t process this (a check or PayPal usually works fine).

SecondPorch, a Facebook application, offers a similar, community-based service which connects to your Facebook profile. I haven’t had as much experience with them, since I don’t feel the need to see the Facebook profiles of potential vacationers. But for some people, this is an excellent perk.

And of course there’s always Craigslist. It’s free, it’s accessible, and anyone can use it. You’ll get a slightly higher number of bogus or undesirable responses, but I’ve had tremendous luck with Craigslist. I appreciate its free, democratic approach to transactions. If you connect with vacationers this way, you’ll need to set up your own payment method–PayPal or a simple check usually work just fine.

How to create an attractive ad: Your ad needs to communicate all the vital information, and nothing more. If it’s too long, people won’t read it. If it’s incomplete, people might pass it over.

An example of good photo staging in Taos, NM (click image for more info)

A good ad has these components:

Description

• Where is your place located? What is it near, and how can people get around? Is a car required, or can people walk or use public transit?
• How many bedrooms, and how big is each bed?
• How many bathrooms?
• How is the kitchen equipped? (Stove, dishwasher, microwave, coffee maker, etc)
• What technology is there? (TV, DVD, Wireless Internet, etc)
• What other key information will people need to know about your home? Describe your home aloud to yourself as though you’re telling someone about it. What are the first 5 things that come to mind?

Photos

Similar to home staging, you want to create a space that vacationers can imagine themselves in.

Take well-lit photos with a good camera (borrow one if you don’t have one). Photos make all the difference in the world, so spend as much time as it takes to get good photos. You can reuse them for years, so it’s worth getting them right. I hate to think I have to say this, but take photos during the day. I’ve seen so many scary, dark photos of vacation homes taken at night. People want to see light, airy, peaceful spaces.

Spend some time cleaning and organizing your home before you take photos. Put away clutter and personal effects. Straighten the bed comforter. Fluff the pillows. People will be scrutinizing the photos to figure out what your home is like, so pay attention to the details.

Gorgeous photo of a vacation rental in Barbados. The sea certainly helps! (click image for more info)

Preparing for your vacationers: Declutter your space (a good practice anyway), and make your home as “livable” as possible. Put lighting where lighting is needed; be sure there’s somewhere for vacationers to put their stuff. If you have any priceless antiques or super personal items, put them away. Put your toiletries away. Put fresh sheets on the bed and clean towels in the bathroom.

Yes, it’s a bit more work, but remember that you’re getting paid to do it! Plus, paring down your belongings and keeping your home immaculate are good practices to get used to anyway.

Customer service: You are effectively running a business, and don’t forget it. You must be responsive to vacationers’ questions and requests, even if it means going out of your way for them. Do everything you can to make their stay an enjoyable one. Not only do you want to amass good reviews (if you’re using one of the listing sites I mentioned), but you don’t want to be the reason someone’s vacation is ruined–that’s bad karma. I’ve been known to give a bottle of wine or a restaurant gift certificate to help smooth over bumps in the road. A little hospitality goes a long way, trust me.

Final words of advice: It can be fun and exciting to meet new people and accept vacationers into your home. While you prepare your home for vacationers, don’t forget to prepare the less visible stuff, too. Be sure that your vacation rental does not violate any HOA or zoning laws in your area. Check your homeowner’s insurance policy to ensure you’re covered should anything happen while guests are staying with you. And finally, keep track of your income through this method because it’s taxable! (The fun never stops, does it?)

Good luck, and let me know how it goes!

I’m curious to hear from you. Have you rented your home to vacationers before? How did it go? Would you consider setting up a vacation rental?

*Note: all the properties linked in this post are places I’ve stayed or would like to stay. I make no commission from these properties; they’re simply included for your enjoyment.

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Stay tuned for the next installment of the Savvy Income series: Home Exchanges.