Renting Your Primary Home for the World Equestrian Games
Renting your primary home for a the 2010 World Equestrian Games can be a lucrative and enjoyable experience, but you'll want to take certain precautions to ensure the safest experience for yourself and your rental guests.What Legal Consideration Should You Keep in Mind?
Sales tax - Collecting sales tax (also called lodging, occupancy, or TOT tax) on the rental amount from your guests and remitting it to your county and/or state is required in most states and provinces. Your local sales tax office may even be perusing other websites like Craigslist before a big event to find owners not in compliance. Setting up a sales tax account is easy and well worth it to avoid fines and enjoy your rental income.
Income tax - According to IRS publication 527, “If you use the dwelling unit as a home and you rent it fewer than 15 days during the year, do not include any of the rent in your income and do not deduct any of the rental expenses.”
Insurance - Check with your insurance agent to see if you'll need any additional coverage for a one-time short-term rental.
What Do You Need to Do to Get Your Home Ready for Guests?
Lock away personal items - Walk through your home and remove any irreplaceable or valuable items. Either place these items in a locked closet or arrange for alternative storage.
Remove clutter - Likewise, make sure the space throughout your home is relatively free of clutter.
Consider new linens and towels - Consider purchasing a set of quality linens for each bed and a set of towels specifically for your guests.
Make room for your guests - Clear out space for your guests in a closet or dresser and don't forget to empty your refrigerator.
How Much Should You Charge?
Due to the scarcity of lodging in some cities during special events, most hotels and vacation rentals elevate their rates; this is especially true in Lexington & the Bluegrass, as hotels are hiking their hotel rates by as much as 400% for the World Equestrian Games. It's the simple principle of supply and demand: A large number of travelers seeking a smaller, somewhat fixed number of rooms will drive up prices to a rate that only the most motivated travelers will pay.
Research hotel rates - When setting your rental rate for the World Equestrian Games, you should first research hotel rates in your area. If a hotel comparable to your home is charging $300/night during the event, you can likely charge at least $300/night for a one-bedroom home. If your home is two-bedroom or larger, you can probably charge at least an additional $200/night per room. When comparing your home to the hotels in your area, keep in mind that your home likely offers considerably more living space and amenities like a kitchen, big-screen television, etc. that could justify charging slightly more per night than a hotel room.
Factor in your location - Location is another factor to consider when pricing your home for an event. If your home is within walking distance to the event venue, you can likely command top dollar for a stay. On the other hand, if your home is located in the suburbs thirty miles away, you probably can't charge the same as vacation rentals and hotels right in the thick of the action.
Determine your emotional price point - Your emotional price point is the minimum amount of income that will quiet your qualms about renting your primary home and is often higher than the going rate for accommodations. If you don't feel comfortable renting your home for anything less than $1000/night, set your rate at $1000/night. But if you're charging more than the average price for lodging, be sure to temper your expectations for all outcomes, including not finding anyone to rent your home.
How Do Vacation Rental Websites Work?
On vacation rental websites like WEGHomeRentals.com, you pay a flat subscription to advertise your home for a fixed period of time . You then build an advertisement with photos, detailed descriptions of your home, your location, and your amenities. Once your ad goes live, travelers to the Bluegrass will be able to find your home through the search engines or by going directly to the website itself. An interested traveler can either call you or send you an inquiry through the site that's then routed to your email address.
How Do You Ensure a Safe Transaction?
Put everything in writing - The best way to protect yourself and your guest is to require all renters to sign a rental agreement well before the rental date that includes specific rules regarding cancellation and refund policies. Do NOT accept deposits without having signed copies of your documents in hand (faxed signatures are acceptable).
Take a security deposit - Many homeowners require a minimum security deposit of $200 or anywhere between 15% and 50% of the total rental, whichever is greater. Be sure to process all deposits right away. Bounced checks signal trouble.
Only accept safe, traceable methods of payment - The safest methods for accepting payment from your guests for a one-time event are PayPal (an online payment service) and personal checks. Certified/cashier's checks, money orders, and untraceable wire transfers are commonly used by scammers and should be avoided.
PayPal: Many travelers like the convenience of this service, since money is transferred automatically over the Internet, directly from their credit card or personal checking account. This service does require you to open up your own account, but the process is quite simple.
Personal Checks: If your guest chooses to pay by personal check, cash the check immediately. Make sure you give the check ample time to clear before giving that guest access to your property.
Get all monies before sending directions or keys. The final balance should be paid 14 — 30 days prior to the rental date. This provides plenty of time for funds to clear before you send directions, keys, or lockbox codes.
The Bottom Line: Prevent potential disasters by getting your proverbial ducks in a row before renting your primary home for a one-time event.
