It has sounded like a great idea for many homeowners across the country to rent a room or even an entire home to people who are traveling. It is done by using a service like Airbnb or another rental operation. They all provide the platform for travelers to find a location to rent in a different city. This practice can definitely bring in extra cash and help homeowners pay off a bit of the mortgage. Unfortunately there are a lot of things to be considered here and most of the renting agencies do not inform the renters about all of the possible legal and financial troubles that could come their way. Even though they claim to cover all damage and risk, in reality they do not. They are putting all of the risk on you, the property owner. Here are a few issues to keep according to Wealth Solutions, an investment advisory firm run by Richard Blair.
In many cases, short term rentals are considered by insurance companies as a commercial activity and that means that it is not covered in the basic home owner’s policy. If a claim is made and your insurance company not informed of this activity, there is a chance they could cancel your policy. In order to continue to rent a homeowner needs to upgrade insurance policies or to add some sort of rider to make sure they are covered. Another great option is to have guests show that they are covered by a homeowner’s or rental policy. It is vital to seek professional insurance counsel when participating in any kind of rental around your home.
Airbnb recently announced that they provide a host guarantee to every host but that is not an insurance policy and might not be available for a homeowner if there is an issue. Their guarantee covers things only after all other avenues have been exhausted. Remember that renters can bring a lot of potential problems with them. They can cause injuries to themselves, injuries to others, damage to the property or participate in illegal activities. All of these things can have a significant effect on the well being of the property.
Richard Blair is the owner and founder of Wealth Solutions, a registered investment advisory firm, located in the city of Austin, Texas. He has been serving the public for 22 years and in that time has built a solid reputation as a man who can help people develop their financial well being. Blair and his Wealth Solutions Team is dedicated to building client relationships that last and allow them to grow in a manner that they are comfortable with. Blair works as a personal Chief Investment Officer for each client. He takes care of all their concerns with expedient appropriateness.