Likely you’re already familiar with the benefits of owning one or more vacation rentals. It’s a great form of passive income that you can also use for your own family getaways. You’ve also likely heard horror stories from other rental owners in your journey of owning a rental. The best way you can protect yourself and your investment is to run your rental like a well-run business.
We have some great tips for you to use whether you’re just starting out in the rental business or already a seasoned vacation homeowner.
Talk with your insurance agent about the ins and outs of getting your vacation rental covered. Insurance will protect you and your renters from injury or damage. Speak to your insurance provider before ever booking your first stay.
Talk to a lawyer-
Do you want to be an LLC? There are a lot of factors at play when making this decision. You may find that you only own one vacation rental and it isn’t necessary. You may also find that it’s absolutely necessary because you own several rentals. Seek the counsel of an attorney who understands the laws for rentals here in New Jersey. It’s important to go forward with the proper classifications for your business.
Get things in writing-
Have a well detailed and clear rental agreement with anyone who plans to rent your home (this even includes visiting friends and family!). Ensure your expectations for each party is clearly defined. Include dates, your cancellation policy, number of occupants, your rates, rules for the house, and procedure for checking in and out. This makes your rental business more legitimate to renters and will ensure they know what is expected of them throughout their stay.
Pay your taxes-
Vacation homes come with different taxes than those associated with home ownership. Research what you’ll need to pay and speak with your accountant. You will save lots of time and money by being prepared for the full extent of what you’ll be paying in taxes.
Handle the finances separately-
Treat your expenses and income from your vacation properties as if it is a business. You’d never use your personal checking account if you owned a store or other business. Follow the same guidelines for your rental. Although the income is passive and feels very hands-off, it is still a business and should be treated as such.
Understand how to market your rental. Have great photos taken of the home. The accommodations need to look clean, comfortable, and like they are inviting to guests. Book the best photographer you can afford (no iPhone photos, please!) and stage your rental to look its best. A little bit of work is required, but showcasing your rental in its best light is a great way of guaranteeing you will stay booked regularly!
It isn’t difficult to run your vacation rental like a business. There are simply a few steps you can’t afford to skip when considering renting out your vacation home. We’d love to help you find the perfect Jersey Shore rental today. Give us a call and we’ll see if we can help you to get your rental business off to a great start!