After taking a break for the July 4th holiday, the market popped up again across the board… what I think of as the mid-summer bump that spurs activity for the next month until it takes another break for the State Fair and back-to-school.
Showings continue to be significantly higher than the last two years, perhaps a product of new listings hanging below, as buyers eagerly jump on the limited supply.
One of the reasons suggested for the supply shortage is the low interest rates that potential sellers don’t want to give up. Instead of selling and buying another home which might better fit their needs, they are staying put to enjoy their low interest rates. Some are buying another home, but still keeping their low interest rate by holding on to their current home and using it as an investment rental… both long term and short term such as AirBnB, which has become very popular. Read more about it in the article below from our blog at Keeping Matters Current.
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
Renting or Selling Your House: What’s the Best Move?
If you’re a homeowner ready to make a move, you may be thinking about using your current house as a short-term rental property instead of selling it. A short-term rental (STR) is typically offered as an alternative to a hotel, and they’re an investment that’s gained popularity in recent years.
While a short-term rental can be a tempting idea, you may find the reality of being responsible for one difficult to take on. Here are some of the challenges you could face if you rent out your house instead of selling it.
A Short-Term Rental Comes with Responsibilities
Successfully managing your house as a short-term rental takes a lot of time and effort. You’ll have to juggle tasks like dealing with reservations, organizing check-ins, and tackling cleaning, landscape, and maintenance duties. Any one of those can feel demanding, but all together it’s a lot to handle.
Short-term rentals experience high turnover rates, as new guests check in and out frequently. This home traffic can lead to increased wear and tear on your property—meaning you may need to make more frequent repairs or replace your furniture, fixtures, and appliances more often.
Think through your ability to make that level of commitment, especially if you plan to use a platform that advertises your rental listing. Most of them have specific requirements hosts must meet. An article from Bankrate explains:
“Managing a rental property can be time-consuming and challenging. Are you handy and able to make some repairs yourself? If not, do you have a network of affordable contractors you can reach out to in a pinch? Consider whether you want to take on the added responsibility of being a landlord, which means screening tenants and fielding issues, among other responsibilities, or paying for a third party to take care of things instead.”
There’s a lot to consider before taking the leap and converting your house into a short-term rental. If you aren’t ready for the work it takes, it could be wise to sell instead.
Short-Term Rental Regulations
As the short-term rental industry continues to grow, regulations have increased. Legal restrictions commonly include limits on the number of vacation rentals in a particular location. This is especially true in larger cities and tourist destinations where there may be concerns about overcrowding or housing shortages for permanent residents. Restrictions may also apply to the type of property that can be used for short-term rentals.
Many cities also require homeowners to obtain a license or permit before renting out their properties. Nick Del Pego, CEO at Deckard Technologies, explains:
“Renting short-term rentals is considered a business by most local governments, and owners must comply with specific workplace regulations and business licensing rules established in their local communities.”
It is important to thoroughly check whether short-term rentals are regulated or prohibited by the local government and your homeowners association (HOA) before even considering renting out your home.
Bottom Line
Converting your home into a short-term rental isn’t a decision you should make without doing your research. To decide if selling your house is a better alternative, let’s connect today.
