Minimizing Risks of Renting Your Home
By: Deborah L. Jacobs (NY Times) March 2016
Try as one might to vet tenants, the sharing economy involves risks. You should ask tenants why they will be renting, who will live in your home, whether they have pets and what they do for a living. Here are some of the lessons for homeowners based on our experiences as landlords and tenants.
Give them space. Declutter, remove personal items and create shelf, drawer and hanging areas for tenants’ belongings. Store your valuables in locked closets or off the premises. Provide a comfortable bed and fresh, high-quality linens – preferably white, which can be bleached.
Protect upholstery. Double up on mattress pads. If buying a new sofa, choose something durable – like leather – or consider slipcovers that can be laundered between rentals. These heavily used items are especially susceptible to stains and spills that can be costly, if not impossible, to remove.
Have boots on the ground. This might be a cleaning lady who comes weekly (at your tenant’s expense) or a handyman whom you pay to handle maintenance and repairs in your absence. You or that person should do an initial walk-through with your renters and show them how everything works.
Send redundant messages. A lengthy house manual will get less attention than a single page with the Wi-Fi code and other key information. Put Post-it notes in spots that require special care – for instance, a reminder like the one Ms. Chambon left us, not to leave wet bathmats on the wooden floor.
Cover contingencies. Notify your homeowner’s insurance company that your house will be rented, said Laura Clark, senior underwriting manager at the Chubb Group of Insurance Companies. Most will continue covering the dwelling and your personal liability — say, if my tenant’s child fell down the basement stairs and was injured, she said. But some exclude your possessions while the house is rented and they typically won’t cover your tenants’ belongings. (Make this clear in a lease.) Ask your tenants for the declarations page of their homeowner’s or renter’s policy and make sure their liability limit is at least $500,000, Ms. Clark said. Homeowners who rent through Airbnb automatically get supplemental property insurance through the company’s Host Guarantee and, in a growing list of countries including the United States, personal liability coverage under its Host Protection Insurance.
Require a security deposit. With extended stays, it makes sense to charge about half the weekly rent, said Jon Gray, chief revenue officer at HomeAway; others recommend 10 percent of the total tab. Hold it long enough after your tenant leaves to discover any damaged or missing items — one month is acceptable, Ms. Baum said. Here Airbnb gives you much less control. It doesn’t allow you to collect a security deposit upfront and you must file claims within 48 hours of checkout. If you and your tenant can’t agree on a settlement, Airbnb, which disburses the funds, has the last word.
