Know the risks when renting your property out short-term
Going away for the weekend and looking to rent your property out short-term to make some money? New technology has made it easy to find temporary tenants at the click of a button, but is it as risk-free and safe as companies make out?
With the mainstream arrival in recent years, of the hugely popular short-term lodging and homestays rental service Airbnb, homeowners who are away from their property now have an easy way to temporarily rent out their house to holiday goers.
Although this may seem like a win, win scenario for homeowners looking to make some money, there have been many documented situations where the property owner has been left with missing items or property damage caused by the temporary inhabitant.
Research into the dangers of short-term renting really highlight the risks when letting to a stranger whilst you are away. A google search will show you many horror stories from people short-term renting their property out to strangers, from drug related crime cases to extreme hen and stag do’s.
Here is an example of when short-term renting has turned ugly for the property owner. This case study shows the real risks of temporary renting, even when using a credible and well-known platform.
East London property
One case of an Airbnb mishap comes from an East London property, where the homeowner, who identifies as ‘BK’, uses Airbnb to rent out their property whenever visiting family in Ireland.
In July 2021, BK’s property received a request from a woman called Clare, who was a verified Airbnb user with past reviews on the platform. However, after the guests checked in, and threw a party at the property, the homeowner returned to find a speaker valued at £600 was missing along with the keys to the property that had been left for the temporary tenant to use during their stay.
After investigation into the case, the booking had been seen to be made fraudulently, and recompense was made to the property owner.
Impact on Home Insurance
The advice to homeowners looking to short-term rent their property when away, is to always make sure your insurance company is aware of your plans. Failure to do so could result in your insurance becoming invalid. Insurance companies will be cautious of these arrangements and may even decline cover or impose additional terms in the policy which includes the exclusion of theft and malicious damage.
Renting for longer reduces the risks
Renting for longer than 6 months carries fewer risks than short-term, as long as you take the necessary steps in order to minimise potential pitfalls. Making sure you use a registered letting agent who will vet your tenant as well as carrying out financial checks, obtaining references and draft a legally binding tenancy agreement gives you a lot more security. Although there are added costs when using a reputable agent, the peace of mind and security it brings will benefit you. Again, you must inform your insurance company with plans of renting, they are far more likely to be receptive to this type of letting.
To learn more about the risks of short-term renting, or to speak to a broker, contact us.