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Vacation rentals: Pros and cons of renting your home

Posted: 6:25 AM, Jun 18, 2018
Updated: 2018-06-18 14:28:21Z

Home rentals are becoming the premier choice for those trying to vacation on a budget. 

Some can cost half the price of a traditional hotel. But renters beware, there are things to know before you click 'agree.' 

Airbnb does impose a service fee between 6 and 12 percent of the nightly rate which is only refundable if the host cancels on you. 

Renters will have to put up a security deposit. But even so, vacation home rentals will be cheaper on average than going the traditional route. 

RE/MAX Realtor Christine Espinoza says renters can "Establish a relationship with the owner, in-fact, and come back the next year and use the same place. But they don't have the hidden fees and they're able to make their own breakfast, make their own lunch. They don't have to go out and eat all the time."

While being a renter will save you money, renting out your space could earn you some serious cash. 

According to Smart Asset, if you're renting out a two bedroom apartment, you can potentially pocket more than $20,000 a year. That research was done in a study of 15 large cities. 

While the profit might not be as big for every listing in Phoenix, it's still money enough to sometimes cover an entire month's rent. 

But with profit comes responsibility. Property owners will need the right type of home insurance which could cost an extra $50 a year. 

Often times there are policies already in place by sites like Airbnb, Home Away and VRBO. 

Taxes will change as well, as you claim extra income so those listing are urged to consult with a Certified Public Accountant. 

And if you have an HOA, beware of its policies on home renting. "There are some communities as a whole that have six-month minimums that you can't rent for less than six months. I would say a lot of the homeowner's associations when you're dealing with a condo would have a 30-day minimum. But you have to check individually because they're all going to be different," Espinoza advises.