Renting out your house as a short term rental is certainly a way to make some extra bucks. However, there are risks and it may not make sense for everyone. Here are some things to ask yourself prior to making a decision.

1. How many days will I rent out my house? Be sure to check both the HOA and the city guidelines around renting to short term guests. There could be fines for violating the guidelines. Also some cities require you to pay additional occupancy tax for having short term guests.

2. How much effort will I put in? The ease about renting an Airbnb is that everything is there for you. Basic toiletries, WiFi, and kitchen items are typical. Some owners go above and beyond with fresh flowers, magazines, local attraction information, and dining lists. Do you have the means to provide these items? Also keep in mind you will have to either personally clean the house, or hire a cleaning service, which could cut into your profits unless you pass the cost onto the consumer.

3. Are you planning to refinance? Though having someone pay your mortgage is great, it could hinder your ability to refinance. Your house may now qualify as commercial or investment property, which could lead to a much higher interest rate. Talk with a financial advisor and a mortgage lender prior to making a long term decision.

4. What is the best home sharing service? Though Airbnb is the most common, there are numerous companies that you can share your house with. Do your research to learn which one makes the most sense for your situation.

For other ideas on how to make passive income on your house, e-mail me at amandaromeo@kw.com.

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