Renting out your property through sites like Airbnb and Vrbo can be a great way to generate income. While these companies make it extremely easy to list residences for rent, there are a host of legal considerations that you should take into account before taking the plunge and putting your apartment, condo or home up for short-term rental. If you don’t carefully think through the legal implications, then you could wind up in a challenging position that you never expected.
The legal risks associated with short-term rentals
There are a lot of difficulties that can arise in the short-term rental business. This includes the following:
- Insurance: You could have unruly guests in your rental at any time. And if you do, there’s a good chance that they’ll cause damage that’s costly to repair. You want to make sure you have enough insurance to cover any potential damages that you could face.
- Liability: Similarly, if someone is injured on your property, you don’t want to have to pay out-of-pocket if the renter files a lawsuit against you. Therefore, it’s a good idea to have some sort of liability insurance to give you an extra layer of protection.
- Subleasing agreements: If you rent your property, then you need to be sure to check your lease agreement to see if subleasing is allowed. If it’s not, then engaging in short-term rental could put you in breach of your lease agreement, which in a worst-case scenario could result in eviction.
There are other legal issues that you may face in the short-term rental industry, such as local rules and regulations as well as taxes, so be sure to fully inform yourself so that you can take precautionary measures as needed.
Don’t jeopardize your financial stability by improperly handling real estate issues
You might face a lot of real estate-related legal issues as time goes on. You don’t want them to come back to bite you, which is why now is the time to be proactive in heading them off before they become problematic. If you want to learn more about the problems you could face and how to resolve them, please continue to read our blog.