Summer is just around the corner. For many families, that means packing up the car or the camper and pulling out of the driveway for a classic summer road trip! With the COVID-19 pandemic finally letting up, people are more anxious than ever to get out and do something fun this summer.
When you’re planning a road trip, you probably put most of your focus on the trip itself. That includes financial planning for things like fuel, food, lodging, and unexpected expenses.
But, did you know you could actually be making money while you’re away? While you’re planning for your road trip, consider looking into setting your home up for rent. If you’ve never thought about it before, let’s dive a little deeper into how it could fund your trip, and so much more.
How to Set Up the Perfect Rental Home
If you’ve never rented out a property before, you have two options – be your own property manager through a service like VRBO or AirBNB, or hire someone with experience. By doing it yourself, you’ll get to keep every penny of the money you make. While hiring a property manager can be helpful to get you started, it may not be as difficult as you think to set up your home as a rental property.
Before your trip, plan ahead and think about what could add value to your property. Some of the most surprising additions include:
- New bathroom fixtures
- Modern upgrades
- Trees and flowers
You’re not putting your home up for sale, but the idea is the same. Adding curb appeal (and interior appeal) will make the property more desirable for renters, so it’s more likely to get scooped up quickly.
From there, have fun and get creative. Before you leave, make sure everything is clean in every area of the house. Decorate it in a way that fits the location and do your best to make it seem like a superior, private rental residence rather than a family home. Renters don’t want to feel like they’re intruding.
What Do Renters Want?
If you’re renting your home out for vacation purposes, it’s a good idea to step into the shoes of your renters. Think about what you would want when you’re looking for a vacation home. Which amenities are important? Larger amenities could include things like a 24-hour check-in, fast WiFi, hot tub, and local guidebooks or recommendations.
You can also add smaller touches to the property by including things like:
- A complimentary welcome basket
- Small kitchen appliances
- Kid-friendly equipment
- Personal care kits
- Cleaning supplies
- Air conditioning
When you’re trying to save money on a vacation, you probably look for hotels, bed and breakfasts, and other lodging choices with plenty of amenities included. Those interested in your property undoubtedly want the same. So, make sure your rental offers the same incentives. It will be easier to market your rental, and you might be able to list it at a higher price by including the features people are looking for.
Know the IRS Rules
Renting out your home while you’re on vacation isn’t only a great way to make a passive income, it can be a lot of fun! You’ll get the opportunity to let your creativity shine through how you stage your home, and you’ll get to put some marketing skills to use as you promote it.
But, there are some more serious sides to renting that are important to know. Before you commit to renting out your home, be sure to learn how your taxes will be affected. There are different rules in place depending on how long you rent out the property. If you’ll be gone less than 14 days and will only be renting out your property during that time, you don’t have to report any rental income to the IRS.
If you’re going to be on your trip (or multiple trips) for several weeks out of the year, the IRS will consider you a landlord. You’ll have to pay taxes on any income you make from the property. But, you can also deduct rental expenses, so make sure to keep track of what you’re putting into the property for rental use vs. personal use.
You’re already putting time, effort, and money into planning for a road trip. Maybe you’ve done some DIY car repairs to get your vehicle in top shape for the highway, installing new brake pads, getting a new battery, and changing your oil. Maybe you’ve planned out the perfect route with the least expensive fuel prices and places to eat. So, why not put just a bit of extra effort into making money while you’re on the road? By keeping these tips in mind, you can rent out your house as much or as little as you’d like, offset the cost of your trip, and have a little extra income to enjoy when you come home.