A majority of homeowners would consider renting out their current home on a short-term basis rather than selling it in the current market.
That’s according to a survey released Thursday by Realtor.com and CensusWide, which included responses from 2,000 homeowners. They found that 60% of respondents would consider renting their current home versus selling if or when they decide to buy or rent a home somewhere else. The survey was conducted online in July 2023.
Some 23% of respondents had rented out their home before or planned to rent out part of their home out in the future. An additional 16% of respondents said they would consider doing that.
“With the 30-year mortgage rate at over 7%, many homeowners are reluctant to sell.”
With the 30-year mortgage rate at over 7%, many homeowners are reluctant to sell. Short-term rentals are a way of earning extra cash and, for those who can afford it, of holding onto their home should they decide to move to a new place.
The company released the survey in conjunction with the launch of a new tool on Realtor.com that allows users to see estimates of short-term-rental income from Airbnb
ABNB,
Homeowners can look at potential earnings estimates for hosting their whole house or even one room. The estimated earnings for a seven-day rental are based on Airbnb data from similar listings in the same zip code, Realtor.com said.
Realtor.com is operated by News Corp
NWSA,
subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, also a subsidiary of News Corp.
Cities like New York are tightening short-term rental laws
Recent legislation may complicate homeowners’ plans to try their hand at short-term renting, however. In New York, a new ordinance that went into effect Sept. 5 requires all short-term-rental hosts to be registered with the city, live in the place they are renting, be present when renters are staying and have a maximum of two guests.
The new rules will likely eliminate many Airbnb listings in New York. Airbnb filed a lawsuit against the city in June, calling the rules a “de facto ban against short-term rentals in New York City,” per court documents. A judge dismissed the case in August.
Airbnb called the new rules “extreme and oppressive.” In a statement released to Associated Press, the company said the city’s new rules “appear intended to drive the short-term rental trade out of New York City once and for all.”
The total number of Airbnb listings in the city could fall by 70%, according to an estimate from Skift.
Other cities, including San Francisco and Seattle, have limits on how many properties one person may rent out on a short-term basis. In Los Angeles, hosts may only rent their primary residence on a short-term basis, and only for up to 120 days per calendar year.
Financial considerations for renting rather than selling
Financial considerations were a key reason homeowners told Realtor.com they would choose to rent out their homes instead of selling them, with 21% saying they would like to earn extra income from renting and 19% saying they would rather rent their home out in order to maintain the equity they had built.
And since many homeowners either purchased their home at an ultralow interest rate or refinanced to a very low rate, they might consider renting as an way to make money while holding on to that home.
Homeowners also had specific plans for that extra income: A third said they wanted to pursue the short-term rental route to earn extra income that they would save toward buying another home with a higher mortgage rate; 29% said they wanted to be prepared in the event that their adjustable-rate mortgage payments increased in the future; and 21% said they wanted the income to help pay for their current mortgage.