Guest suite or backyard unit short-stay rental

Business travelers, visiting family of locals, medical visitors and tourists, usually booked through rental platforms or word of mouth.

A nightly rate plus a cleaning fee, or a weekly or monthly rate for longer stays. Your costs are mainly cleaning, supplies and utilities.

• Organizing and keeping things spotless
• Friendly guest communication
• Photography and writing a clear listing
• Basic DIY or handyman contacts

• Many cities require a short-term rental permit or limit rentals, and some areas don't allow them at all, check before you start
• Lodging or occupancy taxes may need to be collected and paid, check with your state and local tax offices
• Standard homeowners insurance often excludes paying guests, ask your insurer about a short-term rental policy
• A mortgage, lease or HOA agreement may restrict rentals, check your paperwork
• Sharing a property with strangers means privacy and safety to plan for, set clear house rules
• Zoning for accessory dwelling units and building permits for conversions vary widely, check with your local planning office

Startup costs are typically estimated at around $1,500 to $40,000, depending on whether you only furnish an existing room or convert a basement, garage or backyard unit. Conversions and building permits move costs toward the high end.

Monthly revenue is typically estimated at around $800 to $4,000, depending on location, how often it is booked, your nightly or monthly rates and the quality of the space. The estimate assumes at least about 5 hours a week.

Check whether your city requires a short-term rental permit or limits rentals, plus lodging or occupancy taxes, mortgage, lease or HOA restrictions, and zoning and building permits for unit conversions. Also ask your insurer about a short-term rental policy.