How to rent out your home: 10 common questions answered
If you’re thinking about how to rent out your home, here are some of the 10 most commonly asked questions with information-packed answers that’ll help you turn your spare property into a lucrative business.
Are there local laws and regulations around short-term rentals?
Yes, there are often regulations and requirements regarding short-term vacation rentals—when you’re wondering how to rent out your house, this is one of the first things to check. For example, some cities require you to register your property and pay an annual fee before listing it, while others need you to get a business license or undergo a safety inspection. You may also have to display permits, evacuation plans, or other official notices on your property.
Once you’ve sorted out what paperwork you may need, it’s a good idea to familiarize yourself with other regulations that might affect how to rent out your home. In some areas, there may be a limit on the number of nights you can rent out your home per year or a maximum number of guests who can stay based on your property’s size or how many bedrooms it has. Sometimes, short-term rentals are only permitted in certain neighborhoods.
Your Homeowners Association (HOA) may also have its own policies on vacation rentals, so it’s always a good idea to double-check with them, too. For instance, they may have specific rules about parking or outdoor amenities like hot tubs and communal areas. If you live out of town, you may also need to nominate a local contact person who can respond to issues quickly.
While it may seem a lot to wrap your head around at first, don’t worry. You can often easily look up regulations on your local authority’s website and by speaking to your HOA. If in doubt, have a quick chat with your lawyer about how to rent your home on Vrbo.
Are there tax implications to renting out my house?
Yes, you’ll need to be aware of taxation when thinking about how to rent out your house. While tax may sound intimidating, it isn’t actually all that bad when it comes to vacation rental income—although, remember to always check with an accountant. The following information just serves as an overview to give you an idea.
The good news is that if you’re only planning to rent your home for 14 days or fewer per year, you might not need to report the income on your tax return (in the US). For anything over 14 days, you’ll typically need to report your rental income on Schedule E when you file your taxes.
Luckily, many of your rental-related expenses could be tax-deductible. You can often deduct things like cleaning fees, maintenance costs, and even a portion of your mortgage interest and property taxes. If you’re using part of your home for rental, you’ll need to calculate deductions based on the percentage of your home that’s rented and how many days it’s rented during the year.
Don’t forget about local taxes, too. Some areas collect occupancy or lodging taxes from vacation rentals similar to what hotels pay. On Vrbo, you can often set these up to be collected automatically from your guests when they book and pay, which makes things easier for you. This may vary by jurisdiction, though, so be sure to check first.
Remember, always consult with a tax professional who understands vacation rentals, especially when you’re learning how to rent out your home for the first time.
What insurance do I need when renting out my home?
You’ll want to get a special insurance policy when planning how to rent out your home. That’s because a standard homeowner’s policy typically doesn’t cover short-term rentals. Some insurers offer special endorsements or riders that extend your existing coverage to include occasional rentals. If you’re planning to rent out your house regularly, you might need a specific insurance policy for vacation rentals.
The great thing about listing your home on Vrbo is there’s already some protection with the $1 m liability insurance. This generally covers stays booked and paid for through Vrbo and may help if a guest gets injured while staying at your property or damages a neighbor’s property. However, keep in mind that this typically doesn’t cover damage to your own place. There may be other exclusions, too.
To protect your actual home and belongings, you have a couple of options to look into. You can require guests to purchase Property Damage Protection when they book through Vrbo, or you can collect a refundable security deposit to cover potential damages. Many hosts do both for extra peace of mind.
While insurance may not be the most exciting part of learning how to rent out your house, it’s one of the most important. Consider consulting with an insurance professional who specializes in short-term rentals to make sure you’re fully covered. That way, you can welcome guests and run your vacation rental business with peace of mind.
How much does it cost to start a Vrbo rental?
Startup costs vary depending on things like the current state of your home and how much furniture you’ll need to buy. Although there are upfront expenses to think about when planning how to rent out your home, you can generally recover the investment quite quickly.
Your biggest initial expenses will likely be getting your property ready to welcome guests. This often includes professional cleaning and buying new linen, towels, and bedding. If your home isn’t fully equipped, you might need to invest in additional furniture, kitchenware, and even smart locks for keyless entry. Some hosts also invest in security measures like exterior cameras or noise monitoring devices.
Don’t forget that you may have some legal and administrative costs, like permits, insurance, and taxes. There may be other related expenses to consider too, like accountant fees, property manager costs, and possibly creating an LLC.
You may also want to pay for professional photography and property description writing to help sell your home and attract more guests. Then, of course, you want them to have a memorable stay—small welcome gifts, basic supplies, and reliable Wi-Fi can make your listing stand out. While it may seem like a lot initially, these investments can lead to highly-rated reviews and, in turn, more bookings.
How much should I charge for rent?
To determine how to calculate your vacation rental price, you’ll need to make sure you have all your costs calculated. These expenses give you your break-even point—you’ll want to charge enough to cover this plus a bit more for your time and effort. Next, do some market research. Check prices for similar properties in your area on Vrbo to get a feel for the going rates. Look for homes with bedrooms, bathrooms, and amenities similar to yours. This way you can be competitive while still making a profit. Consider your property’s features, too. Things like an ocean view or a private hot tub add value, meaning you can charge a premium.
Seasons matter a lot in vacation rental pricing. If you’re in a beach town, you’ll naturally charge more during summer months when demand is high. Similarly, a ski property commands higher rates during winter. Many hosts charge higher for stays during the weekends and holidays, and when there are special events taking place in the area.
When you first list your property, it’s smart to be competitive with your pricing to build up your reviews. As you get more bookings and more reviews, you can adjust your rates. Finding your ideal price point takes a bit of trial and error, but you’ll get the hang of it before long.
How profitable is a vacation rental?
How profitable your vacation rental is varies based on your location, property size, and local market. Many hosts can cover their mortgage plus earn extra income, but this may not happen overnight. Your first year might involve higher expenses as you establish your rental and learn the ropes.
How quickly you’ll turn a profit also depends on how often you can rent your place. Occupancy rates typically range depending on your location and the time of year. If you’re in an area with year-round appeal, you’ll likely see more consistent income than somewhere with distinct high and low seasons.
Over time, as you gather positive reviews, you’ll tend to make more bookings. You may find that you can reduce turnover costs by requiring longer minimum stays. Don’t forget to look into potential tax advantages—they might improve your overall bottom line more than you’d expect. While it may seem complicated at first, don’t worry: Many hosts find their vacation rental becomes more profitable as they learn how to rent out their home over time.
How do I prepare my home for guests?
When preparing how to rent out your home, start with safety features: Make sure all smoke detectors and carbon monoxide alarms are working properly, check that locks function correctly, and fix any minor repairs like loose handles or wobbly furniture. It’s also wise to have reliable Wi-Fi with the password clearly displayed.
Remember, your personal space will become someone else’s temporary home, so you’ll want to remove family photos, important documents, and valuables. Give your property a thorough clean before taking photos for the listing, too. Clear out some closet and drawer space for your guests to unpack, and think about the flow of each room from a visitor’s perspective. You might want to create a dedicated area where travelers can store their luggage and work if needed.
Don’t forget about stocking up on essentials. You’ll need quality linens and towels (typically 2 sets per bed and bathroom), basic toiletries like soap and shampoo, and kitchen essentials including cookware, dishes, and some basics like salt and pepper. These small details can make a big difference to your guests’ experience.
Make things easy for them too by creating a simple house manual. Include instructions for appliances, entertainment systems, and any quirky features of your home. Consider adding helpful extras like local guidebooks or seasonal items such as extra blankets in winter or fans in summer. These thoughtful touches can often lead to those 5-star reviews you’re hoping for.
How should I handle property maintenance?
Start by deciding whether you’ll handle property maintenance yourself—if you have the time and skills—or hire a property manager to look after things for you. Keep in mind, when it comes to learning how to rent out your house, maintenance can be one of the more demanding tasks. If you live far away, having a local manager means they can respond to any urgent issues that may arise. Once you’ve made that choice, create a maintenance calendar for regular tasks like changing HVAC filters or servicing appliances.
Your vacation rental will typically see more wear and tear than your own home. Plan for seasonal maintenance like gutter cleaning and yard care, and don’t forget to schedule occasional deep cleaning beyond the usual between-guest cleans. You might also want to replace high-use items like mattresses and linens more frequently than you would at home.
Even with the best planning, unexpected issues can arise. Get to know reliable local service providers who can respond quickly when something breaks. It’s wise to set aside a reserve fund for major replacements like appliances or HVAC systems.
What house rules should I set for my rental?
Your house rules should set expectations before guests book, help look after your property, and provide a framework for changes and cancellations. If you’re learning how to rent out your home for the first time, have a look at other rentals on Vrbo to get a feel. A well-drafted policy that’s firm but fair and easy to understand can make things a lot easier for you and the guest.
Start by deciding on your essential booking policies. Think about how you’ll handle cancellations and refunds—you want to be reasonable to guests while also protecting yourself. Consider your property’s maximum occupancy based on beds, space, and local regulations.
Once you’ve sorted out the basics, define how guests will access and use your property. Be clear about check-in and check-out times, and how you’ll handle early arrivals or late departures. Include details about parking, any security devices you use, and emergency procedures. Your guests will appreciate knowing what to expect before they arrive.
Don’t forget to address guest behavior expectations. Clear policies on smoking, pets, quiet hours, and gatherings help prevent misunderstandings. If your property has location-specific needs, like water conservation in drought areas, be sure to mention those, too.
Many hosts find that creating a simple 1-page summary of the most important rules makes everything easier for both you and your guests. If in doubt, you might want to have a quick chat with a lawyer about your rental agreement to make sure you’ve covered all your bases.
How can I optimize my listing to get more bookings?
On Vrbo, a well-written property description with attractive photos and positive reviews can help you get more bookings. High-quality images create that all-important first impression, so make sure you’re showcasing your space from multiple angles and in the best light possible.
Your listing’s title and description are how you’ll grab people’s attention in the search results. Instead of a generic heading, try creating something that highlights what makes your place special. Maybe it’s the “Sun-drenched studio steps from downtown” or “Cozy mountain cabin with private hot tub”. In your description, be specific and honest about what guests can expect—from bed sizes to amenities included. Once your listing is live, keep your calendar updated, respond quickly to messages, and make sure your listing is accurate, truthful, and up-to-date.
Then, there are the reviews. Positive ratings can boost your visibility and booking rate, so do all you can to make sure your guests have an outstanding stay. Consider adding special touches like a welcome basket with regional treats and check to see if they need anything from time to time. If your guests come across any problems, such as hot water or Wi-Fi outages, respond quickly and try to solve the issues as soon as possible.
How to list your home on Vrbo
You simply need to create an account, add your property details, and upload some great photos to showcase your space. Vrbo’s step-by-step process makes it a breeze to get your property in front of travelers who are looking for their perfect stay. The page on how to list your home has more useful tips and information. Remember to apply what you learned in this Q&A post to start welcoming guests and bringing in some vacation rental income.