6 Insider Tips for New Short-Term Rental Owners

What all vacation rental owners should know

Welcome to the world of running a short-term rental vacation property. While owning an additional property and renting it out to others can make a good amount of money, there is a lot that happens behind the scenes. It can be challenging to navigate all the different pieces of owning a property and managing a business. With decades of experience helping owners insure their most prized assets, we have seen it all and spoken to many amazing people. We have noticed they focus their efforts on these 6 perspectives/habits.

Follow these 6 insider tips to help run a successful short-term rental business:

1. Guest Safety is a Top Priority

The last thing you want your guests to be thinking about when they walk into your vacation rental property is their safety. You want your guests to know that they are protected and their safety is your priority. As a short-term vacation rental property owner, you also want to do everything in your control to make their experience one to remember for the right reasons.

For example, bathrooms are an easy place for a fall to occur. They are prone to wet floors and lingering moisture on areas such as walls and inside storage cabinets. Leftover soap residue can cause slippery showers and tubs. The CDC states, “One out of five falls does cause a serious injury such as a broken bone or head injury.” Preventing any fall at your vacation rental property helps keep you and your business from being in a sticky situation.

2. Create a Strong Online Presence

Marketing your vacation rental property using social media involves more than just creating a compelling listing; your posts should also get the attention of potential renters. The most successful social media advertising campaigns are those that evoke feelings in viewers. When you’re able to successfully capture the feeling of staying at your rental property, you’ll likely have many inquiries and future bookings.

The next time you are taking photos of your property for social media, remember a picture is worth a thousand words. It can also be worth thousands of dollars in the insurance world. When you file a claim, insurance companies will ask for photos of the damage or lost items as proof to support your claim. Capturing photos or even videos of your vacation rental property is visual proof to illustrate the scope of your property’s condition before damage occurs.

3. Don’t Assume Homeowners Insurance will Cover Everything

One of the most common questions we receive from customers who want to rent out their homes to guests is a very understandable one: “I have homeowners insurance, so why do I need vacation rental insurance?” It’s a great question that identifies a need to clarify a misconception in the industry as a whole. People get into the vacation rental game not realizing they need more protection than they currently have under a homeowners policy.

Homeowners insurance is designed to protect homeowners from the risk of loss to their residences from unforeseen events. For example, if a tree in your front yard falls on your garage during a thunderstorm or if your roof is damaged during a tornado, your homeowners coverage may pay for the necessary repairs.

Homeowners insurance also contains a personal liability component, which protects you and your family from third-party liability claims such as bodily injury or property damage. Commercial vacation rental insurance is specifically designed for short-term rental usage and protects against liability for renters’ physical injuries and claims related to advertising. Vacation rental property insurance also offers rental income protection in the event property damage requires you to stop renting the unit temporarily.

4. Become Business-Minded

It’s easy to understand the appeal of getting into the vacation rental game. Thanks to the rise of the gig economy, more and more people are looking for ways to supplement their incomes. Listing your home as a vacation rental on sites like Booking.com, Airbnb, and Vrbo is a great way to do just that.

This is where the misconception arises: renting out your home on a short-term basis is considered a business activity. Therefore, you need to treat your business like a business, not a hobby. Creating an LLC for your vacation rental property can be extremely beneficial to you as the owner and make it feel more official.

As a small business, you may be trying to determine the right business framework for you — likely either a sole proprietorship or limited liability company (LLC). For many vacation rental owners, minimizing risk is top of mind, and an LLC is a way to gain added protection in addition to vacation rental insurance. The ability to have extra safeguards for personal risks exposure is without a doubt a major highlight of becoming one.

5. Do Your Research on the Industry

Simply creating an office space in your rental home, offering a contactless check-in, or being more flexible with your bookings, could increase your business earnings exponentially. Pay attention to the vacation rental trends. Just like any other business, there will always be the next latest and greatest trend. COVID-19 has sparked crazy advancements with operational smart technology for short-term vacation rental owners. For example, with listing platforms recognizing the need for contactless check-in, they have also made it much easier for guests to access the information they need upon check-in.

6. Have Vacation Rental Insurance

Vacation rental insurance is a safety measure you pay for and hope you’ll never have to use but are thankful for having it. It’s always best to prepare for the worst, especially when renting out a short-term vacation home because the unexpected can always happen. To learn more about protecting your short-term rental business through CBIZ Vacation Rental Insurance, request a free quote today!

This blog may contain scenarios that are provided as examples only. Coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.