Special Downtown Events
THE GREATER THE RISK THE GREATER THE RETURN is just as relevant when the "Return" appears too good to be true!
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With Super bowl 2012 just over 3 months away I am starting to get a lot of questions from friends and clients wanting to know how real the opportunities are to rent their home or condo for several thousand dollars a day. So, I have compiled the 5 top things you should think about if you are considering leasing out your place for an event like the super bowl. |
1) Accept that the phase the greater the risk the greater the return is true. The ability to get one to three thousand dollars per day is a tremendous return. But, there are a lot of unsanctioned parties and private parties and there is a very real possibility that your home or condo could literally be trashed in a week of partying. Do what you can to minimize the risk by removing valuables like art and personal items and include clauses eliminating the tenant's right to have a party. Of course locks only keep honest people honest and if the tenant holds a party anyway you may have the ability to sue for damages. Still, realize that does not mean they will have the financial capabilities to cover any loss and more likely than not you will also have to take legal action in their home state/city before you can actually collect.
2) Don't prepay a substantial upfront listing fee. What is substantial? I would suggest the same criteria that you use when you visit a casino. If you will stress out over never seeing $100 again AND not having anything to show for it than $100.00 is too much. The magic number will be different for everyone. But, don't be fooled in to believing that your ability to rent your place is sure thing! If you don't personally know whomever you are working with then try to research the firm with the better business bureau and search for relevant information about the company on the Internet.
3) Make sure your homeowner's insurance policy will cover you should something go terribly wrong... someone passes out, the bathtub overflows and floods the floors below. Faced with 40K-80K in repairs and no insurance the 2K a night does not look so good. Make sure you get your insurance agent to document in writing, on your insurance carriers letterhead, that you will be covered should you turn your personal home in to a business for 5-7 days. Rental cars will be a premium too! Of course if the tenant asks for you to include a car for the tenant's use then that means the exact same concerns now related to your auto insurance.
4) Most Homeowners Associations (HOAs) have clauses that limit the rental of your home or condo to no less than 1 year. So clearly renting it for 5-7 days would not be in compliance and once you take a deposit from a visitor for the game the threats of lawsuits, because the HOA halts your ability to rent you home, could mean the visitor has spent several thousand dollars on tickets but has no where to stay because they relied on you and you were unable to deliver. So, you could find yourself returning the deposit, paying damages related to their airfare and game tickets or even worse being asked to pay for the fact that at the last minute your tenant paid 3x more to rent a different place because you "backed out."
5) Be prepared to see the police and media filming your place for the news at 11 while interviewing your neighbors. With every super bowl event, and the influx of visitors, you should accept that some of those that come to down could be prostitutes, drug dealers and schemers. You would not be first homeowner to find out that the guy that seemed so nice and so responsible had turned your home or condo in to a brothel for a week during super bowl. Be sure your lease precludes any business activity and entertaining without your explicit permission for each and every instance. Again, locks only keep honest people honest but hopefully the clause will scare some folks away that you really don't want anyway.
Note the list above is not intended to be all inclusive. You should also be prepared to deal with things like credit and background checks, and spending several hundred dollars with a lawyer to prepare a lease to protect your interests etc. All that said If you are still interested in leasing out your place then please feel free to message or call me and I will be glad to help you
