Your Complete Guide to Solidifying a Short-Term Rental Agreement
Every day, people clock in and clock out, toiling away for less money than they want and more effort than they can sustain. If you're feeling burnt out by constraining schedules and limited freedom, feeling as if there has to be something better, you're not alone.
If you want financial freedom, luxury assets, and an end to choking hustle and crippling debt, you owe it to yourself to learn about luxury short-term rentals. These little gems can help you gain mobility in your lifestyle by putting your wealth into income-building properties.
To get started in short-term rental investments, we need to understand how a short-term rental agreement works. Today, we’re going to unlock everything you need to know about the short-term rental agreement and vacation rental agreement. Let's get started!
So What Exactly IS a "Short-Term Rental" or "Vacation Rental"?
A short-term rental is any furnished property that is occupied by paying tenants for short periods. These periods can range from just a few days to sometimes months. It all depends on the conditions of the short-term rental agreement or vacation rental agreement.
Often, a short-term tenant will use a rental property when visiting a location for business travel, vacation, or other temporary reasons. Other times, short-term lease agreements apply to rentals that are used as intermediary properties while the tenant awaits a more permanent residence.
In these cases, the landlord may require a significant security deposit in the payment details of the rental agreement.
How Do Property Owners Come Upon a Short-Term Rental Property or Vacation Rental?
It is common for homeowners to rent out their homes when they are away, whether the full property or part of it. People with more than one home may also rent their second property out as a vacation rental. Investors can also acquire vacation rentals for the sole purpose of growing their wealth and producing new streams of income.
The rental income property owners can obtain from vacation rentals can be robust, diversified, and lasting.
Depending on the rental period, a homeowner may establish a vacation rental agreement with new tenants regularly or draw up a short-term rental agreement as needed month to month.
What Types of Property Can Be a Short-Term Rental or Vacation Rental Property?
Basically anything. As long as the short-term rental agreement or lease agreement adheres to state and local laws, and the tenant agrees, the property manager can generate rental income. A rental property can take all kinds of forms.
In terms of luxury rent or vacation property, the property is usually a house, townhouse, or some other form of spacious, fully-furnished dwelling. Nothing beats renting out a lavish vacation home for a large rent amount - especially if the rental party is agreeable!
Online services such as Airbnb and Vrbo may require a short-term rental agreement as well.
The Short-Term Rental Agreement Explained
Often called a vacation rental agreement, a short-term rental agreement is a type of lease, or legally binding agreement, drawn up between the landlord and tenant.
Both landlord and tenant agree on various aspects of property details, rental expenses, and rental duration.
This short-term lease agreement can be an easy way to generate continuous and robust income, from multiple guests in a short time.
The Difference Between a Short-Term Rental Agreement and a Normal Lease Agreement
Unlike a traditional rental agreement, the short-term agreement covers a rental property used for a relatively short rental period. In some cases, the tenant only stays for a maximum of 30 days, using a one-month rental agreement. In other cases, they may stay month to month for up to six months and require a substantial security deposit.
A short-term rental agreement that covers more than 14 consecutive days will subject the property owner to rental income taxes.
Whether the agreement is a vacation rental agreement for a vacation rental property, or the property is being leased for other reasons, the short-term agreement should outline all conditions of the rent.
Is a Short-Term Rental Agreement Stricter Than a Standard Rental Agreement?
This is a subjective question, one that will receive different answers from tenants, landlords, and investors alike. It all depends on the contract’s conditions.
That said, short-term rental agreements typically require that the landlord handle costs associated with all property utilities, services, and similar expenses. This would be unusual for a standard lease agreement or long-term rental agreement for long-term rentals.
If you are an investor looking to form a rental agreement, whether a vacation rental contract or some other type of short-term rental agreement, you must ensure your short-term rental agreement covers certain details, which we’ll get to soon!
But first, let’s take a look at rental agreements for popular online services such as Airbnb and Vrbo.
Understanding a Rental Agreement for Airbnb and Vrbo
Depending on your mailing address, property address, local requirements, and state laws, you may have to structure a fairly thorough short-term rental agreement for Airbnb and Vrbo-hosted properties.
As two of the most popular online hosting platforms, Vrbo and Airbnb are great options for investors looking to build rental income from tenants.
What Kind of Lease Agreement and Licensing Do Vrbo and Airbnb Require?
The particulars of Vrbo and Airbnb rental agreements often depend on the state where your property is rented. As the property owner, it’s wise to have a good understanding of the laws that apply to your property and its lease term. In Florida, for example, hosts must be licensed if the days of the short-term lease agreement exceed a certain fixed term.
A short-term rental investment specialist like Rachel Gainsburg can help you understand how to unpack local regulations and create a sound, legal rental agreement. Rachel has a series of signature courses where you can learn about the viability and usability of your property - no matter where you’re starting from! Get started with the right tools and knowledge underfoot to generate profitable, continuous income with luxury short-term rentals today.
All these questions and more can be answered by a short-term rental investment specialist. Experts like Rachel Gainsbrugh can provide you with all the tools and knowledge, such as a short-term rental agreement template, that you need to get started on your investment.
With luxury short-term rentals, you can pursue a full-fledged, lucrative business with sky-high ROI. Sign up to comprehensive and one-of-a-kind Luxury Short-Term Academy, Netflix-featured investor Rachel has helped medical professionals everywhere unlock the power to generate profitable, continuous income. Contact Rachel to discover how to unlock your financial freedom today.
Building a Short-Term Rental Agreement: Everything You Need to Know
As a first-time or inexperienced short-term rental investor, soaking it all up can be overwhelming. After all, you're spending your day working hard just to pay the bills. There are plenty of online resources available that offer printable short-term rental agreement templates.
A rental agreement template will outline all of the important details you and your tenants must agree on. As you analyze a free template online, you'll immediately notice the types of details you need to include as the landlord.
Remember, your short-term rental agreement is a legally binding document, so it must include the important details that will keep you from getting in trouble as the landlord.
It's important that your short-term or vacation rental is legally able to be rented. For example, in some areas and developments, a private residence cannot be converted into a vacation rental. Different areas prohibit or tax leasing activity.
Does Your Short-Term Vacation Rental Agreement Cover the Bases?
As the landlord, you need to communicate to each tenant or group of tenants the expectations, rules, and regulations. After all, this is your property and your investment.
You want to protect it!
So don't be timid. Before you formalize the short-term lease, make sure you're thinking about all the right things. All parties should clearly understand the crucial terms of the vacation rental agreement. This will help you manage each tenant agreement you strike, giving you the coverage and flexibility to ensure a healthy, productive, and profitable relationship with the tenant.
Every vacation rental contract should at least include the following categories.
What to Include in Your Short-Term Rental Agreement
Important Property Information
In your contract, you want to ensure that all aspects of the rental property are clearly and concisely communicated. For legal and practical purposes, make sure you identify the property address.
Describe the rental. What does it look like, what colors are the roof and front? Does it have a porch and a big yard or a small yard? Is it on the water, at a mountain lodge, or somewhere tucked away in the city?
These details will help distinguish the property from others, as well as establish evidence in case anything happens to the property. You also want to note what amenities exist. Is there a pool? A court? What kind of appliances are used?
Reiterate Advertising Points
All of this information is also great for marketing. Remember, you want to target a specific audience. You can't please every tenant, so as the landlord, it's best to accentuate the qualities that make your land and lease attractive to a certain kind of tenant.
One tenant may be seeking a quiet woodsy retreat for one, whereas another tenant may be seeking a spacious beachside house that accommodates a large family. Every landlord should highlight the details of the property to establish information in legal, practical, and marketing/advertising terms.
Once you've identified and described the aspects of your property, you want to identify the tenants. This is usually pretty straightforward. Who is the rental party? Make sure you have their legal names on paper. Make sure you know how many people are at the rental party.
Is it a family? Are there children?
As a landlord, it's up to you to determine how many people you want in your place. Your vacation rental agreement should mention any cutoffs for occupancy. If you have a maximum occupancy, make it clear so that the tenants don't overrun your property!
This is one of the more important categories you need to consider as a landlord. Every property is different, so every vacation rental contract is different. Some short-term rentals command a higher price for shorter stays. Some are better for long-term stays.
Whether your rental is used as a multi-week vacation spot, a business weekend rental, or a temporary 'layover' for tenants moving into a permanent residence, you still have to come up with terms for your guests.
What to Consider for Short-Term Guest Stays
Do you typically keep the rental period the same for all tenants, or are you flexible? Is there a minimum or maximum period? Is it days, weeks, or even months? How many tenants do you expect to turn over in a given period?
In some cases, you may be better off targeting tenants for short stints. In other situations, your rental may be great for tenants staying weeks on end. When guests arrive and leave, what are the check-in and check-out procedures? What's the check-out time?
Do they have to lock certain doors? Do they need codes? Do they need to provide a physical or electronic signature for the check-in and check-out process? Should they email you when they check in or complete a check-in form online or on paper?
House Rules & Regulations
Every short-term lease comes with house rules. For instance, you may have no cancellation policy or a cancellation policy that allows for a full return if the cancellation occurs within 24 hours. You may have certain rules about using appliances, rooms, or amenities. You may want tenants to lock certain doors or close windows when leaving.
There may be maximum occupancy for parking in the garage, driveway, or along the street. There may be home security systems tenants must activate or disarm. Ensure the tenant is made aware of any unique circumstances, features, and situations that apply, such as a pet policy.
Landlords may consider short-term rental insurance in the event these rules are blatantly violated.
Last, but perhaps most important is payment. Is there a security deposit? What is the rental amount? The landlord should enumerate all payment fees the tenant must pay in the lease. Additional fees should also be detailed.
Payment delinquency conditions are also important. How is the money paid? In what kind of cycles? On a set schedule? How much upfront for a security deposit? Through what channels and currencies?
Ultimately, getting paid is what it's all about, and if you have any questions or concerns about short-term leases, you should consult a leading short-term investment specialist like Rachel Gainsburg.
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