January 23, 2015
Are you ready to play Airbnb host during Pope Francis' visit?
The supply of hotel rooms is reportedly exhausted for this fall's World Meeting of Families in Philadelphia, which includes a scheduled Sept. 27-28 visit by the pope.
For anyone wishing to rent out their home or spare room, the process of converting your place into a temporary hotel is almost as straightforward as putting mints on the pillows.
Here's what you need to know before listing your property with Airbnb, VRBO or another rental service.
If your intention is to rent your place for this one time, you need to check with your municipal government, because requirements vary on the need to have a landlord's license.
Those living in a private, condominium or association community may be prohibited from such uses, while renters may need to seek permission from their landlords to sub-let, depending on the terms of their leases.
In Philadelphia, the law “is vague on one-time rentals,” so for now there is no need to apply for a housing inspection license, which normally costs $50 per rental unit, said Carlton Williams, commissioner of Licenses & Inspections. But with such events on the rise, the city is considering creating a license for “one-time” uses, Williams said.
Anyone conducting business within city limits, however, is required to apply for a Business Income and Receipts Tax (BIRT) account and file a tax return. However, income under $50,000 is not taxable, according to Vicki Riley, a spokesperson for the city's Department of Revenue.
In Lower Merion, where demand for temporary housing similarly spiked in 2013 when the U.S. Open golf tournament was held at the Merion Golf Club in Ardmore, a one-time use is allowable in a residential area without need of a license or zoning permit, according to Thomas Walsh, the township's public information officer.
In Cherry Hill, even temporary landlords need to register with the township and have their homes inspected, according to Bridget Palmer, director of communications for the mayor's office. You should allow at least several weeks for the completion of the inspection, which costs $65.
Municipal regulations aside, would-be hosts should consult with their homeowners insurance providers to ensure they are covered.
Most major insurers will cover damages resulting from such a temporary use, even if a homeowners policy prohibits or limits business use of a home, according to Michael Cellucci, co-owner of Cellucci Foran Insurance in Springfield.
To further limit liability, homeowners may want to ask a temporary tenant to stipulate they have coverage on their own home or apartment.
Another way to safeguard your home is to acquire an umbrella liability policy as supplemental coverage. Such a policy costs about $200 a year for $1 million worth of liability protection, Cellucci said.
Both Airbnb and VRBO charge fees for hosts to list properties on their sites. For a one-off experience, Airbnb seems to offer the better terms –– a three percent host service fee for each booking, compared with a 10 percent fee per booking for VRBO.
Jasper Ribbers, co-author of “Get Paid For Your Pad: How to Maximize Profit From Your Airbnb Listing,” offers these tips to first-time hosts for a successful stay:
- Set a rental fee that reflects the greater demand due to the special event, but is priced slightly under similar listings in your area.
- Go “the extra mile” by offering toiletries, welcome drinks and even a local mobile phone or SIM card.