Your House: A New Source of Income

Your house usually takes your money, why not let it pay you back? Review these tips for successfully renting out your home.

Mortgages, insurance, maintenance – how much money have you poured into your home? Do you feel that it’s time for your home to start paying you? If so, and you live in a tourist area or a city sponsoring a major event, you might consider renting out your home while you go on vacation or stay with friends.

A recent USA Weekend article presents several important tips for renting out your home with minimal hassle and maximum return.

• Marketing your home aggressively is key to successful renting, especially during peak tourist times. Place ads in your local newspaper or online at Craigslist.org. You can also check out vacation-home rental sites, which will often allow you to list a one-time short-term rental, especially in tourist areas, according to Joan Talmadge, co-founder of weneedavacation.com. For special events, check with organizers to see if they are listing lodging options on the event’s site.

• Conduct background checks on your renters. Even if the rental is short-term, this is important, since you don’t want to let just anybody into your home. Ask for names and ages of all adults and kids who will be staying at the home. Although tempting, keep in mind that renting to college students is unadvisable. Also request references from vacation agencies or previous landlords, and contact the references to find out how the renters treated the house and whether neighbors complained.

• Always use a lease and obtain a security deposit from renters. No matter how short-term a rental is, a lease makes the rental official. Also, Talmadge explains, renters who sign a lease and pay a deposit are more likely to take care of your home and behave responsibly.

• Check your homeowner’s policy for clauses covering liability claims from renters. If your policy does not cover them, you will definitely need to purchase a special rider before you start raking in the cash.

• Secure your valuables. Remember that not everyone is trustworthy. Anything highly valuable, such as electronics, heirlooms, collectibles, jewelry, artwork or silver, should be stored outside of your home, recommends Alex Chang of EscapeHomes.com. Anything less valuable or personal items, such as photo albums, should be stored in a locked cupboard or closet.

When renting your home out, even for small periods of time, make sure to keep good records. Barbara Weltman, an authority on taxes, says that if you rent out your main home for 15 days a year or more, you need to declare the income. You can, however, deduct expenses related to renting, such as advertising or cleaning, against that income.

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