Admit it; you’ve been thinking about getting into the vacation rental by owner scene. You’ve got dollar signs dancing in front of your eyes as you’re thinking about all of the money you could possibly rake in if you rented out part or all of your current NYC apartment or an apartment you own. It’s true — there are people making very good money renting their apartments out to people who are looking for a temporary place to stay while in NYC.

People around the world rent out their apartments and homes on sites like Airbnb, Onefinestay.com, and VRBO, hoping to attract tourists and others visiting their countries. People like to rent through these sites because on average, they’ll pay less per night for an entire apartment than they would for a single hotel room. Major cities like NYC attract tens of millions of visitors a year, making the potential for big earnings by people who list on the apartment-share sites. Before you whip out your abacus and start planning what to do with your riches, there are a few things you should do.

Find out if you’re even allowed to rent out your apartment. According to a study by the New York State Attorney General, nearly 75 percent of the apartments listed on Airbnb are illegal rentals, meaning they don’t comply with the state’s rental and occupancy laws. For instance, the New York State Multiple Dwelling Law (MDL) prohibits short-term rentals of 30 days or less in Class A dwellings, homes that have at least three families living independently, unless the owner is present during the visitors’ stay. In spite of this and other restrictions, many people list their apartments anyway.

Many renters rent out their apartments without getting approval from their landlords. Since this is grounds for eviction by some landlords, get approval if you intend to start hosting.

Even if you own your co-op or condo, your building’s bylaws may prevent you from renting out your home for the long-term, let alone the short term.

Even if you’re technically allowed to rent out your space, your neighbors may not be happy with their building being turned into a de facto hotel, and they may lodge complaints against you if there’s a never-ending stream of guests filing in and out of your apartment. Keep them in mind when considering the frequency with which you host guests.

Figure out if you’re ready for the responsibilities that come with being a vacation rental by owner. When you list your home, you’re essentially hosting strangers, and you need to do everything you can to make sure your guests’ stay is a pleasant one. If you’re planning on using the site as a source of income, you’ll need to make sure that your guests are happy because they’re going to rate you at the end of their stay. You’ll need to make sure that your home is sparkling clean and well equipped so that your guests want for nothing. You need to make sure that you’re available at a moment’s notice in order to respond to any issues they may have. If you don’t have the time to manage your listing yourself, hiring a management service will cut into any profits.

Make sure you pay your taxes. You’re responsible for paying taxes on the income you make renting out your home. Make sure that you set the money aside so that you’re not hit with a hefty tax bill when you least expect it.

Image Source: Flickr/Jürgen Stemper

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