In recent years, it’s become quite common for homeowners throughout Arizona to rent out their homes on hosting sites like VRBO (Vacation Rentals by Owner) or Airbnb. This can be a great way to earn some extra money. After all, you already own your home, right?
Unfortunately, however, even though most rentals are uneventful, accidents and even intentional damage can occur to your property or building structure. And in these cases, what can you do as a homeowner?
This is a common question that many homeowners looking to rent out their properties will ask — and it’s a good one. But there are even more questions to ask as well. After all, becoming a pseudo-landlord is no simple task.
Below, we’ll explore several questions that all wise homeowners should ponder before deciding to move forward with a home rental. Let’s get started.
Top Questions to Ask Yourself Before Renting Out Your Home
1. What does the hosting platform’s insurance cover?
All hosting platforms are somewhat different. But for the most part, what you should know is that the standard policies provided with your hosting account will not be comprehensive.
Generally, if you don’t spend any additional money on insurance, you’ll get a policy that covers liability claims only. This means that if a guest makes a legal claim against you because they were injured on your property, you’ll be covered. Hosting platform insurance may or may not cover property damage or theft; usually, it doesn’t.
2. Will homeowners insurance help at all?
Usually, the answer is no.
Anyone who owns a home or condo has to have homeowners insurance.
In some situations, your homeowner’s insurance plan may offer protection for a one-time (once per year) rental. Most of the time, however, policies are meant only to cover the permanent inhabitants of your home. Renters present insurance companies with more risks; therefore, they usually won’t be covered under homeowners insurance plans.
To know for sure whether or not your home insurance policy can help you, make sure to carefully read your policy, and give your insurance agent a call to inquire about the matter directly.
Frequent home rentals generally require the purchase of landlords insurance. This type of insurance can be rather expensive, up to 25% more expensive than home insurance.
3. Are there any other obstacles to renting out your home?
At first, it may seem like renting out your home is a super easy way to make some money by doing almost nothing. In fact, it’s a bit more complicated than that. Namely, there are several obstacles you may come up against as you venture into this endeavor.
First, you have to be ready to do a lot of cleaning. Your home should be clean before each rental, which means that if you plan on having three to six rentals per month, you’ll have to give your rental property a good cleaning that many times. This can be time consuming and expensive.
Second, if you live in a homeowners association (or condo subdivision), you may not be able to rent out your home. Many associations prohibit subletting.
Notifying Your Insurance Provider
If you’ve gone through the questions above and still feel home rental is right for you, we recommend speaking with your insurance provider directly as a next step.
Only your insurance provider can tell you how much your home insurance plan will cover or whether additional landlords insurance or other insurance may be necessary to avoid coverage gaps.
At Imes Insurance, our agents are here to speak with you at your convenience. Stop by or give us a call any time to discuss your options.