As many homeowners are discovering, being able to rent out part of their homes or utilize services like Airbnb to rent the entire home out for times when they are away is helping to defray the cost of mortgages for thousands of homeowners, and the industry is growing quickly.
There are a lot of ways to use rentals to pay off your mortgage, but there are some steps that you need to follow to get started.
Research your local market
Know what people are paying for rentals like yours in your area. You want to compare apples-to-apples so you know what you should be charging your renters for what you are providing. You want to hit that median number so you’re giving a good value for the house, but you’re also not getting ripped off by your renters.
Don’t be afraid to call around as well and inquire about homes in the area. See what the owner’s concessions are, what they make available and what the cost is. Every piece of information you can gather gets you closer to charging the correct amount.
Put a little money into the place
When you own something, you tend to go in one of two directions. You love everything about the house and wouldn’t change a thing, or you notice everything that’s wrong. Either way, your home isn’t perfect. There are always improvements that you can make that will make your home more comfortable for both you and your guests. Making the home more attractive to potential renters and your family is a great investment that will pay off for you.
Make sure that you use smart pricing
The Airbnb smart pricing feature will change your listing’s price with market supply and demand. You’ll get a “high” and “low” option, but you can still set your own pricing.
The “low” is usually too low, but you’ll figure out your price. It will usually adjust the price to increase during weekends and busy times for your area. You can always override this price, so just paying attention can make you money if you try.
Manage your calendar for maximum impact
When you manage your calendar, you’ll also manage your income from the property. Using Airbnb, you can black out whatever dates you want to keep your home for yourself, but you need to do it well in advance, and be thorough. Cancelling someone’s Airbnb rental is a bad look and will kill your ratings.
Also make sure that you use the calendar settings to your advantage. Set up notice to make sure that you don’t have renters booking that day – you’re not a hotel, almost everyone needs some more time to get the house in order.
Write a clear and descriptive listing
You don’t have to be the Ritz-Carlton for your guests, most just appreciate a bed, bathroom, and maybe a snack or two. However, what IS available needs to be crystal-clear in your listing. Tell them all of the amenities, certainly, but don’t overdo it.
Also make sure that the restrictions and rules of the home are made clear. If you are renting a room and have kids, make sure that the renter knows that it may get noisy. If you have dogs, make sure that’s spelled out in the listing.
List the whole house when you can
Big events can pay your mortgage off by themselves some months. If you have a big sporting event or a concert in town, you can make a lot of money renting the whole house out. It can work in your benefit in other ways – some people don’t like being around during events anyway, making this a great way to get out of town.
Make sure you follow the same rules that you do for all rentals, but you may make a cleaning fee and deposit part of the deal to keep your home protected, since not every renter is clean and polite.
Call the best mortgage lender, The Home Loan Expert Team in St. Louis at (314) 781-9700, Chicago at (773) 770-4727, Indianapolis at (317) 550-1515, or Nashville at (615) 810-8555. You can always apply online at hero.loan for your VA Loan, and www.thehomeloanexpert.com for your other mortgage needs, and we’re also open on Saturdays and will come to you to help close your loan. We work hard to make it easy on you. Nobody gets lower mortgage rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?