Things to Consider Before Buying and Renting-Out a Vacation House

  1. You need a license to use your home as a hotel (which is what it is). This type of use requires a hospitality/transient use vacation dwelling license.

  2. You will need a state license and, likely, a local license.

  3. Some cities will not provide a license, as they want to protect their communities from becoming transient- and rightly so.

  4. You likely will have to pay a commercial mortgage rate if it is not your primary home.

  5. You will need homeowners insurance (or business premise insurance) that protects you if a short-term renter is injured on the premises. You must tell your insurance that your home is used for transient rentals or you may not be covered for injuries.

  6. You have to remain in compliance with state and local laws for transient/hospitality properties (things like smoke alarms, clean sheets, signs with emergency numbers, etc.).

  7. You need a business tax receipt and have to collect sales taxes or tourism taxes.

  8. You will need to manage the property full-time or hire management because you want the laws to be followed and guests to be happy or they will write bad reviews and harm your business (unless your property is just so desire-able that it doesn't matter- ex: an oceanfront home). Or, if you are not responsive to inquiries, they may not rent your house, at all.

Call us to discuss your management needs.

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