In the United States, 70 million people have a criminal record. That means that everywhere you go, one in five people that you see could very well have a history with law enforcement.
Now, imagine you have to trust those strangers every day. Welcome to the life of a rental property owner. Making the simple mistake of assuming the best in people can literally cost you money.
There are a lot more mistakes where those come from. In this guide, we tackle three mistakes you could be making in your Avalon, New Jersey rental property. Educate yourself on the most common pitfalls concerning your vacation rental property so don't end up a victim.
1. Neglecting to Collect a Security Deposit
Some Airbnbs make headlines for their luxurious $70,000 a-night stays, plus a several-thousand-dollar deposit. This comes as a shock since people naturally assume that deposits aren't for vacation rentals. Unbeknownst to many, though, Airbnb can assign them automatically.
Just like with an apartment, a deposit protects your investment. It's a simple, yet effective little "insurance" policy for minor damages and extra costs. There's no need to fight for it; if the guest breaches their agreement, you can collect.
Many decide not to include a security deposit on listing platforms. It feels wrong for a short stay, or will drive away business, they reason. Rest assured, this improves tenant/owner relations and keeps everyone honest.
2. Not Insuring a Property Right
Insurance certainly feels like a racket, but the core premise is a good one. You never know what could happen, so you want to be prepared when it does.
To cut costs, many property owners will underinsure - or not insure at all - a rental property. They do so believing there's no need. There's only so much damage a short-term guest can inflict, right?
This is a terrible mistake and one that could cost you big time. Insurance covers the sorts of damages that are prohibitively expensive, ones that could put your little side hustle out of business for good. Insurance is a sacrifice, but one you'll be glad you made if and when the crap hits the fan.
3. Ignoring Rental Laws
Before heading to listing platforms like Airbnb, educate yourself on local and federal laws. You'd be surprised how many apply specifically to short-term rentals. Regulations on them can affect some or all of the following:
- Ability to rent a property
- Permitted length of stay
- Prohibitions on short-term rentals
- Requirements for the location of rentals
And the list goes on! Fines and penalties for non-compliance can be steep. Stay ahead of these things by obeying rental property laws to the letter.
Manage Your Vacation Rental Property With PMI
Your vacation rental property is an excellent financial opportunity, yet also one rife with potential gaffes. Simple things like underinsuring the place or not collecting a deposit can result in massive headaches. Avoid these mistakes, and you'll reap the benefits of short-term property renting.
Property Management Inc. helps owners like you spin their "wool" into gold. Apply for a free consultation for your short-term rental today!