Turn Your House Into A Rental: Step
When it comes time to move your family to a new home, it sometimes feels like your only option is to put your current house up for sale, fight for the highest value, and take whatever the market is ready to offer you. In some cases, however, there is another option. You could turn your home into a rental property!
There are many reasons you may consider making your primary residence a rental property, all with their own merits. Maybe you have tried listing the house for sale and you cant get the price you need. Maybe you need to move quickly and dont want to firesale your home. Maybe you just want to rock your finances and add an extra source of income as a real estate mogul.
How To Vacation In A Residential World In The Sims 4
With the new free patch for The Sims 4, players can take their Sims on vacation in any world they have access to, as long as it has a rental property.
Vacation is on every The Sims 4 fan’s mind lately with the arrival of the Snowy Escape Expansion Pack. In the new DLC, players can take their Sims on an unforgettable vacation to Mount Komorebi, the game’s first residential and vacation destination world and participate in extreme winter sports, take a relaxing dip in the hot springs, and spend time with family or friends building memories. However, players don’t need to spring for the Expansion Pack to get the vacation treatment. A free patch coming to all players when the DLC releases allow players to vacation in any world, not just the destination worlds .
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Players can’t just pack up their Sims and go on vacation, however. They will need to do a little preparation. The Sims 4 has yet to include hotels and resorts, but the new update allows players to convert any lot into a rental property, or, for especially build-minded fans, craft their own in the residential worlds as well as the vacation ones. Sims can then rent those properties and take a vacation anywhere, from visiting grandma and grandpa for a week in Newcrest to spending a weekend in the European-inspired Windenburg. Here’s how to vacation in residential worlds in The Sims 4.
Hop On The Advanced Automation Train
If youre wasting time sending the same message to all your guests or continuously updating the booking and vacancy status you need to run the automation train. Repetition of tasks is one of the single most reasons which can affect your vacation rental profitability. From automating Airbnb rentals to sending automatic alerts to the housekeeping after checkout, using technical advancements, you can ensure a seamless journey both for the managers and the vacationers. You no longer have to spend time scheduling different activities or keeping track of guests. Instead, you can utilize the time on campaigns to win a potential vacationer.
Interestingly, with automation, you can even automate the Airbnb review, which can become a turning point for your rental. Customers, especially Millennials, prefer to read online reviews before booking a property. Using automation tools, you can send the vacationers a message telling them that you have given them a 5-star rating and request them to leave a review. You can even program the automation tool to send reminders and follow-up messages if the vacationer ignores the first message.
If you want customers to book your rental property, its time you embrace the digital age otherwise, you will be left far behind.
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Move Out And Prep The Property For Tenants
Once youve done the big stuff, its time to move out your personal belongings and start prepping the home for photos and possible tours. Keep in mind here: If youre turning the house into a short-term rental, you might want to leave a lot of the furniture and essentials . Airbnbs are expected to be furnished.
After youve moved out your personal items, clean the home, stage it , and bring in a photographer to capture the property. You might even want a video to include on the listing since many renters are leasing sight-unseen these days.
Decide If You Want A Property Manager
A property manager helps handle all the stress and craziness that comes with owning a rental property. They collect rent, oversee maintenance, find tenants, and complete lease agreements. A good property manager can make rental income feel automatic.
However, for that peace of mind, you are going to have to pay a pretty penny. The average property manager charges 10% of rental income in addition to ~50% of first months rent when you get a new tenant. If you have a mortgage on your property and an already slim amount of profit, this may not be an option you can afford.
Also, keep in mind that a good property manager is hard to find. Work off references from acquaintances and sources like Angies List and interview potential candidates thoroughly. If you dont feel like you can trust them in the first interview, move on! These people will be handling your property and your money, you want to be sure you are comfortable with them.
HGTV has a great article on how to find a good property manager that I found really helpful.
If you decide to hire a property manager, they will be responsible for the remaining steps in the process! I still recommend reading the basics so you know what the steps are.
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Develop A Marketing Plan
Creating a marketing strategy for the property does not necessarily take a professional. In fact, there are multiple do-it-yourself measures to promote the property. Here are just a few ways to make your listing stand out:
- Write a detailed description of your property for all potential guests to read
- List each feature of the home, whether it is a basic feature or a highly-sought amenity
- Provide links to popular tourist destinations near the property
- Include a recommendation of nearby restaurants and bars
- Note any cleaning and sanitizing methods used and
- Offer discounted rates whenever fiscally possible.
Alternatively, one can hire a licensed real estate agent who shall undertake all listing responsibilities.
What Will You Charge
Before you list your rental, it’s a good idea to sit down and crunch some numbers. Make a list of all the costs associated with the homeyour mortgage payment , property taxes, utilities, and any money you’ve spent on repairs. Don’t forget to add in your estimates for any maintenance, repairs, and other expenses you’ll need to make while you have a tenant. Then figure out how much you’d like to see as a monthly profit. Once you arrive at a rental rate, check other rentals in the area for a house as close to the same as yours. This gives you an idea of how competitive your rate will be compared to other landlords around you.
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Talk To A Real Estate Attorney
You need an attorneys input one way or another. First, youll need to talk to them about liability. Is a good insurance policy enough, or should you consider starting an LLC to protect yourself and your personal finances?
You can also tap your attorney for leasing help. Ask them to put together a customized lease agreement based on the rules and policies you plan on putting in place. You might also want guidance on other forms youll be using — like your application, for example. They can go over it and make sure youre in line with Fair Housing Laws and other legal requirements.
How To Turn Your Space Into A Vacation Rental On A Dime
Real estate owners are benefitting from renting out their primary or secondary homes as vacation rentals. Once you have decided to commit to this opportunity, it is time to decide on strategies for transforming your home into an attractive vacation rental property without spending a lot of your hard-earned money.
Below are some tried and true hacks for transforming any home into rental income gold.
Contents
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As a result, you must first and foremost analyze your home from a different perspective. And it should never be about how much money you can make every day, week, or month. It should actually be a question you ask yourself: Would you stay as a paying guest in your home and how much would you be willing to spend for a vacation? Of course, this presupposes that your property is in an area that is visited by individuals of diverse backgrounds.
To take it a step further, ask the same question to people you know and trust who enjoy traveling. But dont forget to clarify why youre asking and assure them that you wont be insulted if they answer honestly.
We all travel nowadays, and we expect certain things to be delivered. And if our host, who may be any type of property including hotels, fails to match our expectations, which are based on information we obtain and the propertys marketing, the end result will be a dissatisfying encounter and a ruined vacation.
This market research may appear silly to some, but trust us when we say that it is quite important and will, in most cases, point you in the right path.
And if your quick market research went well and youre ready to move on, there are a few more things you should ask yourself, which well go over in the coming weeks. However, here are some hints to get you started:
Now Your Vacation Rental Is Ready For Guests
Whew that was a lot of information! No wonder it was such a whirlwind getting our house ready for guests! I hope this has helped you think through the process and figure out what youll need to get started hosting your own vacation rental.
Be sure to download my handy checklist of what youll need to prepare for guests. And if Ive missed anything, let me know in the comments and Ill update this post to include it.
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Now that youre on your way to getting your house ready, next time well talk about how to create the perfect listing to get guests to come stay at your vacation rental. Until then, happy shopping and cleaning!
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Learn How To Turn Your Home Into A Revenue Machine
Whether you wish to rent your home a few weeks a year or all year long, the fact is you need to attract the right guests and be able to command the amount of money that makes it worth it to you.
These insider tips on how to successfully rent your home as a vacation rental for maximum rental are provided by a friend who is a vacation rental primary at getting as much revenue for his properties as possible.
Just to give you an idea of whats possible, my friend generated $24,600 USD in revenue simply by renting a small suite in his home over the course of 14 months.
While his home is located about 15 minutes from the Atlantic ocean in New Hampshire, its not a vacation hotspot yet he commands top dollar and manages to have very high occupancy rates throughout the year.
Selling Your Rental Property
Another factor to consider in planning for rental property tax consequences is the sale of the property. If you generate a gain, it is taxable at a capital gains rate. That rate is currently up to 20% on the federal level. In addition to that, the Net Investment Income tax at 3.8% will apply.
One way to avoid this is to exchange one rental property for another in a 1031 Exchange. A qualifying 1031 Exchange defers the taxable gain from selling your old rental property until you sell the new one.
There is one option, requiring more planning and a discussion of if whether or not it is a viable option for you, which may shield you from the property sales capital gain and Net Investment Tax. That is to convert the property from a rental to a residential one.
Gain from the sale of a principal residence is subject to a capital gain exclusion of up to $500,000 if a couple filing jointly used the residence as their principal residence for at least two out of five years before the sale. Notice the two-year qualifier. In order to reduce or eliminate the capital gain from the sale of the property, you would have to convert it to principal residence at least two years before the anticipated sale. That would give you two-fifths of the total capital gain exclusion $200,000 for a couple filing jointly. The longer you use the residence as your principal, the larger the excluded gain will be.
For Example
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Protect Yourself With An Llc Or Umbrella Policy
Creating a rental property opens your family up to liability. A rejected tenant may sue for discrimination. A tenants friend may slip and fall on their way down the stairs and sue you for medical expenses. Since a rental property is supposed to be a source of cash instead of a drain on cash, you want to make sure people on your property arent able to come after your family and their other assets .
The two main ways to protect yourself as a landlord are creating an LLC or purchasing an umbrella policy. If your home will be your only rental property, one or the other is probably enough. However, there are some states where both are recommended or one provides better coverage than the other. I recommend getting a consultation with a real estate attorney in your state before you make your decision.
Walk Through Your Property Regularly
If you are not able to do so, enlist the help of a local friend or your real estate company. Look for visible signs of damage and wear and tear. Accidents happen but you want all repairs completed before the next set of guests move in. Outside lawns should be mowed and bushes trimmed. Outside seating and dinging areas should be clean and usable. If your property comes with the use a grill, make sure there is enough gas in the propane tank. If you have a winter vacation home make sure that your furnaces are working and test the heat at the beginning of each rental season. A hands on and involved renter generally has a better property than those who are absent.
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Set Your Rent And Start Marketing The Property
Do the calculations, and figure out what rent you need to charge. For one, you want your rent to align with rents on other comparable properties in the area. More importantly, though, you need to be sure your rental income is enough to cover your mortgage payment and expenses, while still making some sort of a profit.
Once youve determined where that sweet spot is, write up your listing description, compile those photos, and start putting your property out there. You can also bring in a real estate agent for help here, though youll pay a commission to do it.
Tips: How To Turn Your Property Into A Vacation Rental
You dont need a hotel or a cottage to earn that extra income make a few extra bucks by turning your property into a vacation rental.
According to a report by Statista, in 2019, vacation rentals clocked up total revenue of $83,984 million.
With so much on the table and year-on-year increase in the number of people booking vacation rentals, it makes sense to leverage the lucrative businesss benefits. The massive growth of this market is primarily driven by a vacationer base drenched in the digital landscape.
Today, vacationers have a much higher expectation in terms of security, technological sophistication, and convenience.
Imagine a vacationer who can brew espresso or get alerts from the refrigerator when its low on bread. Such a vacationer is likely to speak volumes about your property. With a few swipes of the Smartphone, the vacationer can perform everything. Such a person is never going to forget the experience at your rental, and the odds of them sticking a shiny five-star review on your listing are high.
Your professionalism and the ability to understand the current market trends can be the difference between flipping the vacation rental lights off or on. Here are some actionable ways to turn your property into a profitable vacation rental.
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Tips For Making Money Renting Out Your Home
If you’re inspired by Nainan’s experience, you’ll need to make your living space guest-ready advertise it with a description, pictures, rate and availability monitor inquiries as you receive them select your renters, and communicate your house rules and check-in and check-out times.
No. 1: Time your offer
Big events like sports championships, political conventions and music festivals dramatically increase demand for short-term rentals in towns that don’t have enough conveniently located hotel rooms to meet the need, says Adam Annen, a spokesperson for the HomeAway rental platform headquartered in Austin, Texas.
How much you can charge “depends on where your property is,” he says.
No. 2: Understand the upfront charges
How much you’ll pay for your listing depends on which platform you choose. Craigslist is free. Airbnb charges a 3 percent host service fee for each reservation you accept. HomeAway charges $349 for a 12-month annual subscription or a 10 percent per-booking fee.
No. 3: Show your home’s best features
“Take as many photos as you can and make your listing description as detailed as possible, especially with regards to location,” Annen suggests.
No. 4: Cleanliness and amenities matter
Annen says professional cleaners are a must before your guests arrive and an option after they leave. Make sure all your appliances and any amenities like a dishwasher, big-screen or hot tub are in working order.
No. 5: Secure your valuables
Insurance requirements