Have you ever stayed in an Airbnb while traveling and thought you could become a host at your second home or vacation property? With the popularity of this less formal way of renting on the rise across the US and the globe, it makes sense that many Wisconsin homeowners have given the idea of becoming a landlord a thought. But while the process may seem simple from the side of a renter, as a landlord, there is plenty of work that goes into converting your home into a short-term rental.
In fact, one of the biggest obstacles you should be aware of is your home insurance coverage. While you may assume your current policy will cover rental damages, in reality, you’ll probably need to explore additional coverage options. Keep reading to learn more about what it takes to become a successful short-term rental landlord.
Will My Current Home Insurance Policy Work for Airbnb Hosting?
Typically, your home insurance policy will only cover a short-term rental if you are simply renting your home out for a single occasion. But in the case of Airbnb or VRBO.com (Vacation Rentals By Owner) rentals, you will likely need to purchase an additional type of insurance coverage. This means that anytime you want to rent out your second home or vacation property on an ongoing basis, you will need to either invest in landlord’s insurance or possibly business insurance.
What is Landlord Insurance?
This is optional insurance coverage for landlords that works to cover homeowners from any financial losses that are connected with a rental property. This coverage is designed to cover your home for an extended period of time and typically includes an option to protect the contents inside the home and any additional assets from damage incurred during the rental period. Homeowners can also expect this type of coverage to protect the home from common issues like fire, inclement weather, theft, and other damages. However, landlord’s insurance does not typically extend to cover any personal property belonging to your tenants.
What Are My Other Insurance Options?
If you would like to rent out your home for short periods on an ongoing basis, your independent insurance agent may also recommend investing in a small business insurance policy. Because you will be essentially operating a business, this coverage option will work to protect your home, other outdoor structures, the contents inside the home and more from damages that may be caused by your tenants. This may be a good coverage option for those who won’t be renting in a traditional sense, with leases that are less than six months.
Becoming an Airbnb host requires much more work than simply purchasing an additional insurance policy. In fact, to get things started, you’ll need to invest a great deal of time and energy into transforming your second home for a family retreat into a fully-functional business rental. Some of the most important tasks you’ll need to consider include:
- Initial maintenance and ongoing maintenance to keep the home running properly.
- Staging the home so that it is ready for new renters.
- Creating a classified add or Airbnb profile that outlines the features of the home, your rental terms, and showcases high-quality photos of the rental space.
- Ongoing cleaning costs.
- Interacting with renters online, via phone, over text and in-person.
- Addressing renter’s complaints in a timely manner.
- Dealing with upset and angry neighbors.
- Legal considerations. Is Airbnb hosting banned in your county or HOA?
Contact Thiel Insurance Group Today
Want to learn more about the importance of comprehensive homeowners insurance? Contact our friendly and knowledgeable Appleton and Kimberly insurance agents online today for more information and be sure to request a quote!