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773.818.9054 office/cell
866.381.4238 efax

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Monday, December 5, 2011

When Renting Out Your Home Makes Sense

Chicago Tribune's latest real estate article that I found interesting:

It takes a leap of faith, not to mention a little investment in time and money, but the idea of renting your home to strangers is catching on.

People are coming to town for the holidays or on vacation or to visit their kid in a college near you. Why not open your doors to pick up some extra cash?

"We have had many great experiences renting our home for the summer months," said Michelle, a real estate agent who rents out her primary residence, located in Maine, every summer and lives with family and friends while her place is rented. She asked that her last name not be used.

For her, the decision was financial.

"At first we were very apprehensive about renting out the house," she said. "Believe me, it was not an easy decision to allow strangers to come in our home a week at a time. However, financially we had no other options. … The (rental) money allowed us to pay the mortgage."

"(The rental website) HomeAway sponsors a survey every year, and the most recent said, on average, people who make their vacation property available for rent take in between $30,000 and $35,000 a year," said Emily Glossbrenner, a rental expert (www.fullybookedrentals.com) who wrote "How to Make Your Vacation Property Work for You!" (FireCrystal Communications) and rents out her second home, a one-bedroom riverfront cottage in Bucks County, Pa.

HomeAway is one of several sites that match property owners with potential renters: VRBO, Wimdu and airbnb are among the others. The growing popularity of the idea can be seen in numbers from HomeAway Inc.'s network of online vacation rentals. The websites' global listing count at the end of 2008 was 338,396. A year later, it was 433,295, and 2010 ended with 527,535 listings. As of early November, the number was more than 625,000.

So the money and demand are there. But before you take the plunge, follow this advice:

Do your homework. Go to rental websites and scout the competition. See what amenities are offered, how the property is decorated and what the asking price is.

Is your property something that people want to come to? Beach cottages, summer cabins, even a condo in the heart of a big city will draw people. A two-bedroom ranch in Kansas or a tiny apartment in rural Kentucky might not be as desirable.

Even if you live well outside a big city, you may have something people want.

"If someone has a house 35 miles or more outside a city, I would encourage them to rent anyway," Michelle said. "Lots of people prefer to be a little bit away from all of the summer crowds and traffic.

"For the holidays, someone close to you may have a large family (visiting) that they do not have the room for, and your house may be just what they are looking for."

Legal considerations. Let your insurance company know you're going to be offering your place as a rental and be sure you have the proper liability coverage and damage insurance.

Are there any local regulations or homeowner association rules that prohibit renting out your home? Just because the neighbors do it doesn't mean it's legal. Also, you may be required to collect state and county occupancy taxes.

Depersonalize. Suppose you're going to rent to a party of 10 for a week.

"They're going to expect to be able to hang their clothes in the closet; they're going to look for empty drawers," Glossbrenner said. "Living out of a suitcase doesn't cut it in today's world. People expect dresser tops they can put things on; bathroom vanities for their things."

"We had to depersonalize the house," Michelle said. "Took out all the kids' pictures and little knickknacks and things that had personal meaning for us. We made space in the basement for all the extra stuff that we move out every year. We have streamlined the process and can do most of the changeover from our house to others' in a day or so."

Appliances don't have to be top of the line with all the bells and whistles — most guests won't be able to decipher a high-tech coffee maker anyway — but they have to do what they're supposed to do and operate efficiently.

Other things travelers appreciate: flat-screen TVs, quality sheets and towels, fans, an ironing board, lawn furniture and a work space for using a laptop or writing.

12:46 pm cst 

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