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5 Ways to Make a Vacation Rental Property Stand Out

Renting a property means doing your research, and these top tips from Zensurance will help

Renting a property means doing your research, and these top tips from Zensurance will help

As a landlord, renting a home, condo or apartment has a lot of upsides. Demand is always high; it’s a source of passive income, and owning a rental property allows you to diversify your investment portfolio.

But landlords face challenges as well. There is much risk and liability that comes with renting or leasing a propertyfrom maintenance and repair issues to an unruly tenantwhich makes protecting your dwelling with a landlord insurance policy a top priority.

Perhaps it’s one reason why thousands of Canadians opt to participate in the vacation short-term rental game instead. After all, becoming an Airbnb host and offering short-term rentals of a portion or all of your house, condo or seasonal property is an attractive way to earn extra income when convenient to you. According to Statistica, vacation rentals revenue is projected to hit $1.8 million US in Canada in 2022 and rise to around $2.1 million US by 2026. Moreover, 93 percent of vacation rental revenue is expected to be generated through online sales by 2026. But simply listing your property on Airbnb or any home-sharing website, such as VRBO, isn’t a guaranteed path to success.

Moreover, municipalities across Canada may be taking a closer look at regulating the short-term rental industry to ensure it doesn’t exacerbate current housing shortages. For example, the City of Victoria is cracking down on illegal short-term rental operators after introducing a bylaw to regulate the operation of vacation rentals in the capital’s tight housing market in 2018.

Nevertheless, public health restrictions designed to reduce the spread of COVID-19 are relaxing in some provinces, enticing property owners to jump in (or jump back in) to the private short-term rental market. But what should you be wary of?

Whether it’s Airbnb or VRBO you intend to list your property on, take the time to familiarize yourself with the challenges and risks that come with being a host. You want your hosting business or side hustle to be successful.

Therefore, review these important insights before listing your property…

1. Laws, regulations and taxes

Check your municipality’s bylaws and rules to determine if there are any limitations or restrictions related to being an Airbnb host in your neighbourhood. For instance, in the City of Vancouver, all short-term rental operators must have a business licence and can only operate from the dwelling where they live. The rental can be an entire home or a room within it that is rented for less than 30 consecutive days at a time.

2. Insurance

A word to the wise: protect yourself from third-party liability lawsuits and damages to your property. Both Airbnb and VRBO provide hosts with some levels of protection. However, listing your property on Airbnb or VRBO turns it into a business property. Your personal home insurance policy may not cover you for third-party bodily injuries or property damage if you file a claim. Speak to a licensed insurance broker and ensure you’re adequately covered as a host.

3. Enhanced cleaning measures

The COVID-19 pandemic remains a fact of life, and it may last for many months to come. That means you need to allow for time between reservations to thoroughly clean your dwelling, as well as do any necessary maintenance work.

4. Count all the costs

Property owners need to approach hosting on Airbnb and VRBO in a businesslike fashion. That means laying out a business plan that accounts for all expenses and projected income. For instance, hosting guests means there’s likely to be an increase in your utility bills (electricity and water). Track all your expenses and income and save receipts for when you need to file your taxes.

5. Make it a successful venture

Let’s face it: there are many risks associated with renting out your vacation rental property. But you can mitigate those risks. Here are seven ways to protect your digs and ensure you delight your guests…

  • Consider the customer experience: What kind of amenities will you offer? Including a few simple items to make your guests more comfortable goes a long way (and may result in a positive Google or online review). Offering free toothpaste, dental floss, soap, shampoo and bottled water is always a welcome bonus… and leaves a lasting impression.
  • Identify your target market: What kind of guests do you want to stay at your property? For example, will you allow your guests to hold a party? Or would you prefer only families and couples? Tailor your rental listing to attract the guests you want. Andas it’s your placeset the house rules. For instance, if you don’t want guests to bring their pets with them, make that clear from the get-go. Ensure your visitors know and agree to the rules you have in place.
  • Communicate with your guests: Think about providing your visitors with everything they need to know. Set up emails to send to them before they arrive and let them know how to check in and out, contact you if they need to, and offer a few tips on places to see and things to do near your property. Make it easy to locate nearby grocery stores, pharmacies and restaurants. After they check out, send a follow-up email, and ask them to rate their experience staying with you.
  • Are you renting a condo? If the property you wish to rent is a condo unit, double-check with your condo building’s property manager or board to ensure you are permitted to do so.
  • Think of the contents in your dwelling: Don’t leave any valued or expensive items in the residence that you cherish. Can you replace them or live without them if they are damaged or stolen? Also, think about the furnishings in your place. Durable, easy-to-clean furniture and carpets or area rugs will make cleaning up after a guest’s stay less onerous.
  • Install security measures: Installing a home security monitoring system is a wise move whether you’re in the short-term vacation rental business or not. It may be worthwhile to investigate installing additional security measures like a smart door lock, which gives you the ability to grant access to the property when you’re not home and keep track of who opens the door and when via a smartphone app.
  • Review your property insurance: We can’t stress this point enough. Firstly, talk to your home insurance provider to let them know you intend to rent your property to a tenant on a long-term lease or participate in the short-term rental vacation market. Secondly, speak to a licensed broker and have them review your existing coverage to ensure there are no gaps in it. You don’t want to be overinsured, but being underinsured is a far worse position to be in if something goes awry and you need to file a claim. All insurance coverage has limits. If you’re getting into the vacation rental game, enhancing your protection with an Airbnb insurance policy may be your best bet.