VRBO

Short term rentals are becoming more commonplace. If you plan on renting your own home, there are several things to consider.

Make sure you review any recorded covenants before you rent. Do they regulate rentals and how can rules be amended are issues that one should know before making any decision about renting your home. More neighborhoods are adopting restrictions against VRBO use.

The County or City where your house is located may have special rules or restrictions regarding renting your home. Many require an inspection or a septic compliance certificate before renting and may limit the number of weeks you can rent your home.

The County may change the tax classification of your home if it is rented frequently. Your County Auditor could confirm if and when your classification may change and how that would impact your real estate taxes.

If you do move forward, make sure you have a good lease with an ample security deposit. There should be rules of use that match any local or state requirements. The lease should indemnify you from any injury related to the use of your home. You should ask your insurance agent about any needed changes in coverage as well. Finally, even with good insurance and a good lease, there is risk when renting your home to strangers. Forming an LLC to hold title is usually recommended. With that in place, if the lease or insurance does not fully protect you at least the LLC will restrict claims to the LLC assets, not other personal assets you own.