It seemed like a good idea at the time, right? You own a home in a popular holiday destination, so you'll rent it out and just sit back and watch the money pour in.
It's not that easy. Renting out a holiday home takes far more work, money, and risk than most homeowners realise. At a certain point, it's not worth it anymore.
If you're trying to make the decision about whether to rent or sell your holiday home, here's why selling is probably your best bet.
Rent or Sell Your Holiday Home: Why You Should Sell
Many homeowners start renting out their holiday home because they still want to use it themselves on occasion. If you no longer want the house for that purpose, selling tends to be the way to go. Here are some reasons why:
Cleanings and Repairs
If you've been renting your home for more than a few months, chances are that you've had at least one problematic guest. It's amazing how much damage some folks can do to a house within a week or so.
The best case scenario is that you have to clean the house between each guest. That alone can be time-consuming if you do it yourself, or expensive if you hire a cleaning crew.
However, sometimes guests break things or there are expected repairs the house needs before another guest can come in. That's even more time out of your week or money out of your pocket.
Screening Renters
Some homeowners say, "It's just a short-term rental, so I don't need to screen the renters." Those homeowners tend to regret that choice sooner or later.
The wrong person can do a lot of damage in a short-term rental. They can also find ways to scam you out of the rent or other fees.
Even worse, they could steal valuables or important documents from your home like your social security card, birth certificate, passport, and more. That's why it's so important to screen your holiday renters.
Inconsistent Income
When you first decided to rent out your holiday home, you probably calculated how much you could charge for each week, calculate your maximum yearly income, and were thrilled.
The problem is that few if any holiday homes have constant renters. That maximum income also doesn't account for all the expenses that are involved.
As you get into the rental process, it becomes more and more clear that your income goals may not be realistic. Selling the home is a more reliable way to get the value it holds.
Legal Liabilities
It's clear that when you own a property, you're on the hook for any repairs it needs. What few homeowners think about, though, is the legal liability on their shoulders.
If someone gets an injury on your property, the legal responsibility is on your shoulders. Even with insurance, it can become an expensive affair. If you'd prefer to avoid those risks and stay away from that liability, selling the house could be the right move.
If you keep the house, you can be confident that your expenses will go up but you can't be sure that your income will rise with it. It's important to evaluate those facts carefully as you decide whether it's worth the risk to keep your rental home.
Hiring a Property Manager
Of course, some of the time-consuming measures above aren't necessities. Instead of handling marketing, communications with renters, hiring repair contractors, screening renters, and more, you could hire a property manager.
While a property manager takes most of the time out of managing your rental, they're an added expense. A typical property management fee is about 4%-10% of the rental cost. However, this could be higher with your short-term rental because it requires more time than a long-term rental does.
How to Sell Your Holiday Home
If you're not ready to handle the responsibility of renting out your property, it's time to start working toward a sale. Selling a holiday home is a lot like selling a regular home. You'll need a little time, patience, and the right help on your side.
To get the best sale price you can, use these tips along the way:
Find an Agent Who's Experienced In the Market
Selling a home on your own can be time-consuming, you'll want a real estate agent to help you along the way.
It's not necessary to find a real estate agent who has experience selling holiday homes. The key is working with a real estate agent who knows the local market.
They'll be able to price your home well and set you up for a fast and profitable sale.
Avoid the Temptation to Rent the House
While your home is on the market, it's tempting to try to get as much income from it as possible. However, this can slow down your sale and cause further problems.
You want the house to be available for last-minute showings when the right buyer comes along. In addition, you never know how long it will take to clean or repair the house after a renter leaves. By cutting down your available showing times, you're lowering your chances of a good sale.
Choose the Right Timing
When you're selling your holiday home, you have more flexibility. You're not trying to balance moving out of your primary residence with moving into a new home.
With that in mind, make sure to discuss timing with your real estate agent. The agent knows your local market and can help you choose the perfect month or week to put your home on the market.
Getting Your Equity from Your Holiday Home
Plenty of homeowners have grand ideas about the income they can make from their holiday home, but then they find out that it isn't as easy as it seems. If you're deciding whether to rent or sell and you want a low-maintenance way to get the equity from your holiday home, selling may be the right choice.
If you're ready to sell your home, contact our real estate office to get started.