10,000 Mortgage Holiday Rentals In the USA

When I was first considering mortgage holiday rentals as a way to earn extra income, I had so many questions. How does it work? Is it profitable? What about taxes and insurance? Over the past few years of renting out my home when I travel, I’ve learned a lot about this niche vacation rental industry. In this article, I’ll share everything I’ve discovered to help other homeowners understand if mortgage holiday rentals are right for them.

What Are Mortgage Holiday Rentals?

Mortgage holiday rentals refer to homeowners renting out their primary residence on a short-term basis when they are traveling or not using the home themselves. This allows the homeowner to earn additional income that can help cover their monthly mortgage payment or other expenses. The key aspect is that the owner still considers it their primary residence and lives there the majority of the time.

How Does It Work?

The process for listing a mortgage holiday rental is similar to putting any vacation rental property on the market. Homeowners first clean and prepare their home to ensure it is guest-ready. They take professional photos to market the listing online. Platforms like Airbnb, Vrbo, and HomeAway are common options for posting mortgage holiday rentals. Homeowners set nightly or weekly rates and have a calendar where guests can book available dates.

When a reservation is booked, the owner receives a payment from the guest upfront via the platform. They provide clean linens, towels, accessories to make guests feel at home. During the guest’s stay, the homeowner is not required to be on-site but should be available if issues arise. After checkout, the home gets a deep clean before the next guests arrive.

Is It Profitable?

One of the biggest questions homeowners have is whether renting their primary residence can generate meaningful income. The answer is that profitability depends on several factors:

  • Rental rates you can charge based on location, amenities, and home size
  • Number of nights booked each month on average
  • Your own lodging costs when traveling vs. staying elsewhere
  • Additional expenses like cleaning, supplies, damage protection, platform fees

With an in-demand area and diligent calendar management, most mortgage holiday rentals earn thousands extra each year beyond just covering the monthly payment. Doing the math is important upfront to ensure it makes financial sense for your specific situation.

Tax Considerations for Mortgage Holiday Rentals

Another area homeowners need clarity on is taxes. As your primary residence, mortgage holiday rentals qualify as non-commercial, which impacts filing significantly:

Income Taxes

Rental income must be reported on Schedule E of your personal tax return. But you can deduct many rental-related expenses to lower your tax liability, such as maintenance, supplies, cleaning, fees, HOA dues allocated to rental periods, and even a portion of your property taxes and insurance. The goal is netting a small or even minimal profit after expenses.

Self-Employment Taxes

As a side business, you’ll need to pay the standard self-employment (SE) tax on rental earnings, just like any other freelancer or small business owner. This covers both the employer and employee portions of Social Security and Medicare taxes, typically adding up to around 15% of net income.

Depending on Your Situation

In some cases, if rental earnings are under a certain threshold or you have significant losses, you may not need to pay SE tax or income tax on profits. Be sure to discuss your specific tax planning needs with a qualified accountant.

Insurance Coverage for Mortgage Holiday Rentals

Liability is another crucial concern, especially with strangers periodically staying in your home. Make certain your regular homeowner’s insurance policy allows occasional short-term rentals. If not, you’ll need a non-owner occupied or vacancy policy to fill coverage gaps when guests are present.

Key Aspects to Consider:

  • Personal liability for any injuries on your property
  • Coverage for guest and third-party property damaged or stolen
  • Business interruption if the home is uninhabitable after an insured loss
  • Additional insured endorsement naming the rental platform

Platforms like Airbnb also provide some baseline host protection insurance at no charge. But a rental-specific policy is still recommended to assure you and your guests are fully covered.

Prepping Your Home for Mortgage Holiday Guests

Presenting your home in the best light is as important for mortgage holiday rentals as any other vacation property. Guest reviews can make or break your business. So spend time getting your space guest-ready with these essential prep tasks:

Deep Clean From Top to Bottom

Visitors will expect a spotless home on arrival. Thoroughly clean floors, dust surfaces, launder all linens, wash windows, scrub bathrooms, and disinfect common areas.

Stock Necessary Amenities

Provide soap, shampoo, coffee, snacks, toilet paper, paper towels, laundry detergent and any other essentials guests may need during their stay.

Inspect and Test All Appliances

Ensure the kitchen, washer/dryer, electronics, and temperature control systems are in working order before guests depend on them.

Personalize With Stylish Accents

Decorating with things like candles, art, books, and games projects an inviting atmosphere for relaxing at home.

Create a Guest Information Guide

Detail home rules, wifi passwords, nearby attractions, and your contact info in case of any issues during the stay.

Marketing Your Mortgage Holiday Rental Listing

Getting the right eyes on your mortgage holiday rental listing takes strategic promotion. Here are some effective marketing tactics to drive bookings:

Optimize Your Listing Page

Use a descriptive title, compelling photos from multiple angles, relevant keywords, complete details, and badge any special amenities.

Engage Potential Guests Online

Promote via social media, neighborhood Facebook groups, your personal website or blog. Respond quickly to all inquiries and requests.

Distribute Affordable Local Ads

Advertise seasonal deals or last-minute discounts in community newspapers and local guidebooks visitors may bring.

Build Rewards for Referrals

Offer $25 off future stays or free nights if past guests book friends. Loyal customers become your ongoing promoters.

Track Your Metrics Closely

Analyze which marketing spends drive the most traffic and bookings. Continually refine and repeat top-performing strategies.

Keys to Excellent Guest Service

While it’s great to earn passive income from your mortgage holiday rental, providing legendary guest service is what creates repeat and referral business. These tips will keep customers happy:

Respond Quickly to Messages

Replies within an hour or less leave guests feeling valued and well taken care of.

Address Issues Promptly

Rush to solve any small problems before they escalate into complaints or bad reviews.

Check In During Stays

Pop in or contact guests mid-visit to ensure everything is perfect and answer additional questions.

Send Thank You Notes

Follow up after checkout with a personal note thanking them for their patronage.

Collect Constructive Feedback

Ask for reviews both positive and critical to continuously improve the guest experience.

Common Challenges and How to Overcome Them

No business operates without hurdles, so understanding typical pain points lets homeowners better handle issues:

Problem Guests

Have strict policies in place and don’t hesitate to remove unruly renters threatening your home or reviews. Document all interactions.

Last-Minute Cancellations

Offer generous refund policies to avoid penalizing honest mistakes, or implement a small cancellation fee discouraging frivolous changes.

Timing Renovations and Repairs

Schedule interruptive projects exclusively for off-season or low-booking periods to minimize denials.

Coordinating with Household Residents

Clearly define rules for shared spaces and develop a routine minimizing guest/owner crossover.

Legal Property Restrictions

Research and abide by all HOA, zoning, and municipality rules prohibiting or regulating commercial-like short-term rentals.

Is a Mortgage Holiday Rental Right for You?

Weighing factors like your area’s demand, your responsibilities tolerance, rental potential, taxes owed, and long-term goals will reveal if this passive income path is suitable. Test it out slowly at first to ensure viability.


Q: How do I handle background checks for renters?

A: Most listing platforms offer paid identity verification and background check add-ons screening for criminal history, credit rating, and evictions on all adult guests.

Q: What about cleaning between guests and deep cleans?

A: For multi-night bookings, use a lightening quick cleaning checklist. Reserve a full deep clean day between every 5-7 night stays using a professional cleaning service.

Q: Can I deduct the entire home as a rental property?

A: No, only the percentage of days rented compared to days lived in personally can count as a rental for tax purposes. Use relevant records to document splits accurately.


As the mortgage holiday rental industry explodes with opportunities, it’s an exciting prospect for many homeowners. Conduct intensive research, planning, and test periods before diving in fully. With dedication to continual improvement in property preparation, guest service and marketing, you’ll successfully add passive rental income to your household budget through strategic use of your mortgage holiday property.

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