Owning a vacation home can mean a lot of things. It can mean a place to escape off to during the holidays and a place you can rent out to supplement your income. It can also mean another mortgage, more repairs, and, sometimes, inviting and sharing with family and friends.
Imagine getting a call from a distant relative, asking you if they can use your beautiful beach home during 4th of July weekend. You’re torn – you want to share your home with your family but you also want to generate income on one of the most popular beach weekends of the summer.
There’s a bit of a gray area when it comes to letting your friends and family use your rental home for free or even a discounted rate. It can be uncomfortable telling your cousin to pay your full nightly rate for the weekend they want to use your rental or to tell a sibling they can’t use your home at all.
When you have a beautiful vacation home, sometimes you want to share it with everyone you know. It’s an invitation for family vacations, events, or reunions.
Here are 5 tips to help you when renting to your friends or family. These are items that won’t only protect your relationship; they will protect your property and those renting your home.
Use a Rental Agreement
This may seem like a no-brainer, but many people forget this aspect when it comes to people they know using their vacation rental. Thoughts like, “I’ll skip the agreement because I know them. If anything happens, I’ll just talk to them,” may creep into your mind.
Don’t do this!
Writing up an agreement not only solidifies the rental, but it also lets them know up front your expectations. Like any other place they would rent, they have to be willing to put their signature on a piece of paper. It’s also a legal and binding contract. You may be compadres, but this is still your home and they have to treat it with respect. If they don’t, they have to be willing to pay for it.
Have a Plan
After someone rents your home , they may leave it untidy or a complete mess. Either way, you can usually assess the situation with less emotion than if you were cleaning up after a family member. Renting is more than costs; it’s about emotion.
Along with an agreement, let those people know how you expect the place to be left. Should they clean it? Are they responsible for laundry? Should they pay a non-refundable cleaning fee? Friends and family need to know their responsibilities as a tenant and renter.
You should also consider what will happen if they break something like a TV or waterline. This is where you could implement a damage waiver.
Damage waivers, or damage protection, is an insurance product that provides coverage to your renters. This helps protect them against accidents that occurs during their stay. This includes broken lamps, televisions, walls, bedding, or lost keys.
Know Your Costs
Solidify your calendar early. Obviously, the summer is the prime time to open your home to anyone. The rental business is a $25 billion industry, but it all comes down to when you want to rent your property out. This means you must decide when it’s open to strangers and when it’s open to your family. If you want to supplement your income, you will have to decide when to book and when to rent to family.
If there are days you know family and friends may want, block them out. If those dates are prime rental dates for vacationers, you may want to politely let your friends or family know they can’t rent then.
Treat Your Property as a Business
If you’re looking to make money from your vacation property, it’s important to let family know this. Like any bed and breakfast or hotel, there are things that must be done in order to maintain a home. Be clear on how the arrangement will work, what you expect and what they can expect from you.
It’s a fine line between being a vacation rental owner and a buddy, but this is your business and they need to realize that. Be sure to clearly outline your rental policies like where to park, what’s allowed inside the home, if they can or can’t have pets, and how many people are allowed to stay in the residence. Remember, this isn’t a bachelor party pad where eight groomsmen can come destroy the place; this is your second home and others need to be aware of this.
Communicate With Your Property Manager
However you decide to handle letting your friends and families use your rental, make sure you’re transparent with your property manager about it if you have one. Let them know ahead of time about holds on your property, if you’ll require additional housekeeping, and if your personal guests damage anything at your home. Keeping your property manager in the loop about how you’re using your home will benefit your relationship with them and also help you continue to get the most out of your rental property.
Renting to family and friends provides a unique opportunity for everyone. At the end of the day, you just want people to enjoy your beautiful home you have because, it’s a place designed to create memories. Just remember these few tips and you’ll make it a great place to stay.