You’ve probably heard of or seen the headlines. A homeowner rents out their home on a short-term basis and ends up with the legal nightmare of a squatter who won’t leave.
The “sharing economy” refers to the trend of consumer peer-to-peer rentals of houses, cars, skills, and other goods and services. With the rise of the sharing economy, many homeowners have become de facto landlords through use of sites like VRBO and Airbnb.
How can property owners protect themselves as they pocket a little extra cash?
Understand state and local laws
You could rent out your home as a short-term vacation rental for years with no problems. In fact, that’s how it goes for the vast majority of homeowners who earn extra money with sharing economy sites like Airbnb. Most guests are respectful of your property, and many will leave it in better condition than they found it.
But it’s the handful of outliers who can cause serious and costly problems for property owners. First, homeowners should understand that short-term rental of homes is not legal everywhere. And an owner might have to go to court to evict a guest who decides to stay beyond their welcome.
Before renting out a home on a short-term basis, owners should research and understand pertinent local and state laws. In some areas, a stay longer than 30 days falls under landlord-tenant law rather than laws that cover hotels.
Take advantage of all available protections to thrive in the sharing economy
Airbnb encourages hosts to check into prospective guests by reading reviews on the site and contacting the guest, The Desert Sun notes. Airbnb requires that both hosts and guests be site members, and the site provides some vetting. Guests typically review sites where they stay, and hosts also can post reviews of guests. Airbnb also provides insurance to cover damage to a home by a guest.
Do your own sleuthing
Homeowners also can take the initiative to do their own research on prospective guests. Facebook, Twitter, Instagram and even a simple Google search can reveal a multitude of information about renters and their histories. Doing a little legwork can help confirm that prospective renters are being truthful about their identities and can save homeowners from potential headaches down the road.
Short-term rentals require caution
The new sharing economy has brought unprecedented opportunities for homeowners to make extra money from their investments. By understanding relevant laws, taking advantage of protections afforded by online services and researching prospective tenants, you can enjoy the benefits while minimizing the risks.