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Renting your vacation home

Date posted:  7/23/15 09:45:00 AM Consider renting a vacation home to help juggle the financial requirements of owning a second property.

Owning a vacation home has a number of perks. Individuals can escape to their favorite location without worrying about spending money on a hotel or leaving behind the comforts of home. 

However, the cost of a second mortgage coupled with maintenance can add up leaving you with a depleted checking account. Fortunately, there is a way to make a little money to offset the additional costs of a vacation home, according to Kiplinger. 

Follow these tips when renting out a second home: 

Partner with local establishments and businesses 
According to Bankrate, one way to make a vacation home even more appealing to potential renters is by offering additional deals they can use at nearby establishments. Reach out to local businesses and ask about coupons or discounts renters can use.

"Businesses will appreciate the additional business renters will bring in."

"Call your local restaurants, ski resorts, marina, water parks, amusement parks, movie theaters and arcades for discount or free coupons to add to your vacation package," Marie R. Ferguson, author of "Breaking all the Rules: How to Rent Your Vacation Home" noted. "Tell those businesses how often you have renters and how many people tend to visit per vacation. "In times like these, they will welcome the business and be excited to throw in freebies - anything to get more sales."

Businesses will appreciate the additional business renters bring and homeowners will be able to attract more potential renters. 

Offer flexibility with rental options 
People decide to go on vacation for a variety of reasons and their time away from home varies as well. To accommodate this variability, allow renters the option to stay for a weekend, a full week or other flexible time periods. It can be difficult for people to take off extended periods of time and a minimum required stay can chase off potential renters and cut into profit. 

Know how to advertise 
Getting word out about an available vacation rent is the key when it comes to finding plenty of interested renters. Bloomberg Business suggested spending $1,500 each year to get your home online and visible to a broad audience. 

When listing your property online be very descriptive with recent photos and ensure it captivates individuals looking for a special getaway. 

"If you have these features, make sure that's front and center in your advertisements because it's something people are looking for," noted Christine Karpinski, author of "How to Rent Vacation Properties by Owner," according to Bankrate. 

Describe the lake view everyone is after or the cozy fireplace all vacationers want to come home to. Emphasizing the presence of these will intrigue more people. 

Adjust pricing to fit the season 
When renting a property, homeowners should adjust the price to the time of year and the demand. 

"One big mistake people make is they don't price according to the season," said Karpinksi, noted Bankrate. 

Winter in a lake town isn't as appealing as it is during the summer. Accounting for seasonality ensures a homeowner doesn't eliminate potential renters because the price doesn't match demand. 

Renting a vacation home can cut costs associated with owning a second home.Renting a vacation home can cut costs associated with owning a second home.

Invest in insurance 
When people decide to regularly rent out a home, they should buy insurance to cover potential problems that might arise while others are staying in your vacation home. Oftentimes, homeowners can charge renters a portion of the insurance cost, according to Bloomberg Business. 

"I'd rather have the renter pay a one-time fee that gives me $5,000 in coverage than have to deal with handling a small security deposit that gives me less protection and requires me to collect and return the money," said T.J. Mahony, founder of FlipKey, an online vacation home rental site. 

Homeowners are hosts 
Remember when renting a vacation home you are hosting guests in your house. 

"It's a mistake to think of yourself as the landlord and the renter as your tenant," says Emily Glossbrenner, who with her husband, Alfred, runs fullybookedrentals.com. "Guests behave more like friends, who will treat your home well and tell you if they broke anything."

Try to anticipate the needs of renters. For example, if there is a small child or baby, provide toys or a crib to accommodate them. This is a great way to enhance the overall experience and they will be more likely to recommend the vacation home to friends and family members. 

You may also want to consider allowing pets in your home to appeal to a wider audience. If the house can support a four-legged friend and you feel comfortable with it, it can boost your renter options. Don't be afraid to advertise this accommodation when listing the home on vacation rental sites. 

Make sure you are very specific when describing the listing to ensure there is no confusion regarding the policy in your home. While you are a caring host, emphasize what makes a good guest. For example, explicitly stating smoking is not allowed indoors will ensure renters are completely aware of the preferred policy. 

Owning a vacation home can be a great investment for time away from home and renting the space to tourists is a great way to help manage the associated costs of ownership. However, know how to best approach renting a space and the risks entailed before committing.