Q. I recently purchased a property that has traditionally been rented out for 4 to 6 weeks to each tenant, sort of an on-the-beach, longer vacation rental. Is there anything special I need to think about in renting this type of property?
A. Yes, a number of things come to mind. Consult your insurance agent to be sure you have adequate insurance. You mentioned the property is on the beach -I would suggest asking your insurance agent if you may need greater coverage than normal because of potential liability of drowning or getting injured in the water. Even though you don’t own the beach, it is a “beach house.” Let your agent know if you provide surf boards, boogie boards, kayaks or any other water-related items for use. Be sure to fully disclose the type of rental property and value, not only the home but also the furnishings, to your agent. Don’t hesitate to ask questions about anything you may not understand.
Prepare House Rules for the tenant, advising where they can park, where visitors may park, what quiet hours are, how to dispose of trash, when to expect landscapers, how to use electronics etc. List any peculiarities of the property.
Prepare a detailed inventory of the furnishings, linens, dishes etc. to be signed by both you and the tenant. This inventory would be in addition to the property condition form detailing the condition of the physical property that is signed with a rental of any length.
Take lots of pictures. You may want to research software that is available specifi cally for this purpose. There are a number of companies that provide great inspection programs, even if you have only one rental. You will want to create a budget for wear and tear to the furnishings and linens -I suspect these items will wear out quickly in a rental such as this.
Be up front with the tenants about cleaning-related costs. I would suggest you include cleaning in the rent amount or have a set cleaning fee. You
should arrange all the cleaning to be sure it is up to your standards.
You will need to obtain both a General Excise Tax license and a Transient Accommodations Tax (TAT) license. A transient accommodation is defined as follows: “Transient accommodation means the furnishing of a room, apartment, suite, single family dwelling, or the like to a transient for less than 180 consecutive days for each letting in a hotel, apartment hotel, motel, condominium property regime or apartment (514A or 514B), cooperative apartment, dwelling unit, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, or other place in which lodgings are regularly furnished to transients.”
In addition to obtaining the TAT license, you must conspicuously display the name, email and phone number of the on-island local contact for the rental and the registration or information stating where the registration can be examined on the property. This would be similar to the notice you see in elevators indicating that the registration may be reviewed in the manager’s office.
When you advertise your vacation rental property, online, in a newspaper, with a flyer or anywhere, you must conspicuously provide the TAT registration number or a link to it if it is an internet site. You must also provide the name, email and phone number of the on-island local contact in the ad/fl yer…or, at the least, give it to the tenant in writing before they take possession of the property. If a citation is issued, violations of the transient accommodations tax laws are steep -the fi nes are $500 per day for a fi rst violation, $1,000 per day for a second violation, and $5,000 per day for a third or subsequent violations. The transient accommodations tax laws changed January 1, 2016. Please check with your accountant and/or your attorney to be sure you fully comply with this law.
I love staying at beach rental properties such as yours instead of hotels! I wish you the best of luck with it.