Vacation home rentals not as easy as you think

July 14, 2008
Homeowners are increasingly tapping into the vacation rental market to earn an income, but often are unaware of the pitfalls in renting out their suites to vacationers, warns the Better Business Bureau.

The Vancouver-Whistler 2010 Olympics are just around the corner, and many homeowners are seeing this as a time to renovate their homes to cash-in on vacation rentals.

Some experts say that a homeowner could double or even make up to ten times the amount with a short-term vacation rental, than a traditional month to month home rental.

“What can look like an easy way to make profits is really not so easy,” says Lynda Pasacreta, Better Business Bureau President and CEO. “Being successful with vacation rentals requires extensive planning and knowledge on how to market your property effectively.”

Your BBB would like to offer the following rental tips for owners:

Get the right insurance. Homeowner's insurance for your vacation rental property is essential to avoiding future headaches. You may want to ask other homeowners in your area who and what type of insurance plan they have to cover their homes. Consider options that include the following: fire insurance (extended coverage on buildings and contents); liability insurance (depending on type of business); and burglary protection (theft coverage).

Be careful when advertising. Many vacation rentals have turned to the internet to attract vacation renters through online listings. However, there are some websites that can be scams. During the Salt Lake City Olympics Games in 2002 there were a number of scams that involved con artists trying to collect fees in order to market area homes or spare bedrooms for the Olympics.

Check your local laws and taxes. Before considering renting your home as a vacation rental be aware of both provincial and local restrictions. Contact your local tax office or Chamber of Commerce for up-to-date information including BC rental tax laws. A Hotel Room Tax could apply to your short-term accommodation if you have four units for rent or more, or if you rent to one person for longer than one month. Visit the Ministry of Small Business and Revenue website for more information.

Licensing may be required. If you are planning on providing services outside of your own home rental, you may require additional licensing for areas such as property management and acting as a travel agent.

Do your homework when renovating. If you are converting part of your home into a suite, you may need to have a private bathroom installed, or additions made to your home. This may require a building permit in some cases. In addition, check with the BBB before hiring a contractor to do the work.

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