Airbnb recently announced its most profitable quarter with 103.7 million nights and experiences booked! From the early days of couch surfing and home sharing, vacation rentals have transformed how we travel and opened up lucrative opportunities for homeowners to earn a solid passive rental income and make some extra cash on their personal property.
Following the pandemic, rental properties skyrocketed as the preferred choice of accommodation for travelers across the globe—and the demand for private, safe residential properties to rent in Palm Springs is higher than ever. In fact, an estimated 600,000 tourists stay in non-hotel accommodations each year in Palm Springs. It’s safe to say the rental market in Palm Springs is booming—and turning your primary residence into a rental property is a great way to start making money!
Should I Turn My Primary Home in Palm Springs Into a Rental Property?
If your primary residence in Palm Springs is in an attractive location and is well-suited for guests, turning your home into an investment property is well worth the consideration. However, there are several things to think about before turning your house into a rental property—including market research, required permits, and rules and regulations from the local government.
Before you transform your home into a haven for guests to enjoy, due diligence is required to determine what requirements must be met to operate a Palm Springs Airbnb, the potential ROI, and whether you go the DIY route or partner with a professional. Speak to us at Savvy VRM anytime—we’ve done it all before!
5 Steps to Turn Personal Residence Into a Vacation Rental
It doesn’t have to be difficult to begin securing monthly rent by turning your home into a vacation rental. Just follow these easy steps:
#1 Understand the Legal Requirements
First, confirming you’re even allowed to turn your house into a rental property is of the utmost importance. You don’t want to be accused of mortgage fraud, so you’ll need to verify the occupancy clause in your mortgage agreement. If your home is in a gated community or condominium complex, you must also verify the HOA rules allow renting before you decide to turn your home into a rental.
If you plan to rent your home for more than a few weeks a year—it’s automatically considered a vacation rental business and must meet specific rules and requirements. Palm Springs has some of the country’s strictest regulations for rental homes. You are required to obtain an annual vacation rental permit, pass a home inspection, and adhere to strict occupancy limits based on the size and location of the property.
#2 Crunch the Numbers
Your property’s maximum income potential is primarily determined by location, market demand, and available amenities for potential tenants. It’s wise to talk to a real estate agent, mortgage lender, or another real estate financial expert to determine the best rental rates for your home.
In addition to potential income, you will also need to consider the cost of turning your house into a rental—and keeping up with it. You must pay property taxes, mortgage interest, landlord insurance, and keep up with repairs and renovations. However, as a rental property owner, you may qualify for tax deductions, which can help boost your rental income. Talk with a tax advisor to discover your options.
#3 Protect Your House & Renters
Next, talk to your insurance company to learn about what additional coverage you may need before turning your home into a rental property. Chances are, they will advise you to switch to landlord insurance.
Landlord insurance protects you from property damage like homeowner’s insurance would, but it also covers legal costs or medical bills if you are found liable for any injuries to your tenants caused by safety hazards on your property.
#4 Transform Your Home to Attract Guests
You’ve mastered the due diligence requirements. Now, it’s time for some fun! You can start transforming your home into a vacation oasis that attracts the right guests, makes them feel at home, and meets their expectations. However, despite the fun, getting your home ready for renting is a time-consuming process. It requires thoughtful planning to make your house stand out from the crowd, so you can secure more bookings.
First, removing personal items from your home, like picture frames or family mementos, is essential. Then, focus on improvements that enhance your home’s comfort, convenience, cleanliness, curb appeal, safety, and amenities. These factors will be what visitors use to decide if your property is worth renting during their time in Palm Springs!
#5 Partner with a Savvy Property Manager
You can do it all yourself, or you can start turning your home into a successful vacation rental when you hire Savvy VRM. We are a boutique vacation rental agency with a small group of hospitality professionals dedicated to helping homeowners stay savvy and successful with their short-term rental goals.
Our full-service management solutions are custom-tailored to your home, and your short-term rental goals and home are in expert hands. Call us at (760) 227-5377 today, or click here to leave a message.