While the most common option with luxury homes is to buy them outright, not everybody has that level of funding. Additionally, some people see a luxury home as a seasonal getaway rather than a full-time estate. This is especially true when the area has as much seasonal variation as Colorado does. If you own a luxury home but don’t plan to use it full-time, renting might be something you consider. Here’s a quick primer on what you should know.
Benefits to Renting out your Home
The biggest benefit to renting out your luxury home during periods when you aren’t there is that it can greatly help your cash flow. Rather than pay a mortgage on property you won’t be using for six months, you can have somebody else stay on the grounds and use that rent money to cover the costs of owning the home. Having renters on the property is also a good way of making sure that you know when something needs to be fixed. A house that is left empty for a long period of time can often run into problems with areas such as the HVAC system, electricity, or weather-related damage. If somebody is on the property, they can notify you right away so you can make sure the problem gets fixed quickly.
Marketing the Home
The biggest challenge in attracting the right kind of person for a luxury home is a matter of marketing. While a luxury home may be beautiful, many potential renters rarely look beyond a listing or assume that if the home is too high-end they won’t be able to afford it. A good luxury home rental listing should include the primary attractions of the home, the number of bedrooms, the cost per month, and exactly how long you plan to have renters in your home. Some people choose to rent out a luxury home on a seasonal basis, while others plan for the longer term, offering a house to renters for a year or two while they plan for retirement or a major move.
There is one major downside to renting out your luxury home, and that is the potential for damage. Renters in general can be very hard on a residence, and the potential for skyrocketing repair bills increases with the value of a home. If you plan on renting your home to anybody, you need to do two things. First, you need to make absolutely sure that you can trust the people you are renting to. Meet with them in person before signing any contracts and check their references thoroughly. Second, even if you do trust the people you are renting to, make sure to require a security deposit and include language in the contract that holds them accountable for major damages. This is to protect both parties.
Handled correctly, renting out your luxury home can be very beneficial. It provides the renters with some luxury living for a short period of time and gives you a chance to keep your house paid for and maintained during the months when you are away.