Perils come with renting out home for Super Bowl

Valley residents have been finding all sorts of ways to capitalize on the overload of tourists arriving in Phoenix for the Super Bowl and FBR Open.

What’s the easiest way to make a large sum of money quickly? Rent your home to last-minute fans willing to pay top dollar for a place to stay. But insurance and real estate experts warn that renting out your house for big money may be a big mistake.

“(Your home) is supposed to be a personal residence,” Scottsdale State Farm insurance agent Tom Napral said. “When somebody’s using it as a business exposure, it changes that residence.”

A business exposure, Napral explained, is when a person takes compensation for a service. In this case, letting a person use your home for a fee would create business exposure. If something were to happen while that person was paying to use a home, “insurance can then deny to cover a claim,” Napral said.

This is a problem because insurance companies won’t sell homeowners a renter’s policy for such a short period of time because the risk is so high.

“That’s when you get into the specialty market,” Napral said. “Those companies are willing to take the risk for a very high premium.”

One way to avoid paying the high premium and still protect yourself is by creating a contract with the help of a lawyer.

“The tough part was figuring out the legality of it,” said Parker Rhoads of Chandler, who is trying to rent out his house near Dobson and Warner Roads with the help of his roommate. “We’re both salesmen, so we know tons of lawyers. We pretty much went to one of our client’s lawyer and got an idea of what we should put in the contract.”

Rhoads house was listed on Craigslist.com, a Web site where people can post items at no cost that they want to sell or rent.

“More than likely, these people are going to be strangers,” Rhoads said of his potential renters. “I don’t think a lot of people are planning on scamming, but we want to make sure they don’t have a chance to scam us.”

Rhoads said he has kept reposting his listing on Craigslist.com so it appears at the top of the Web page. He and his roommate also tried to think of creative perks to catch people’s eyes, including chauffeuring his renters around and stocking the fridge at half the cost.

“We wanted to give incentives,” he said.

For those living in leased homes, there shouldn’t be an issue renting out their space.

“If you’re renting an apartment, if you’re renting a home or condominium, they’re already insured for perils,” Napral said.

Marc Pendergrast, a University of Arizona student, is renting out his Ahwatukee Foothills rental home that he co-owns with his dad.

“It was kind of a spur of the moment thing,” Pendergrast said. “The renter dipped out on us last minute.”

Pendergrast, who comes to the Valley from the University of Arizona on the weekends, is asking $700 a night plus a $150 cleaning deposit for the home near Chandler Street and Amberwood Drive.

The duo already have a party planning company called Executive Sports Group in New York staying from Tuesday to Friday.

“It’s cheaper, too,” Pendergrast said. “With hotels, they need to pay $500 a person for a room, and it adds up really quickly. Instead, you could just split the cost of the house.”

The two are still looking for renters for the big weekend.

Tips for avoiding problems:

-- Know your renter. Get information and check references.

-- Develop a contract with your lawyer.

-- Secure your personal items of value.

-- If you’re a renter, check that your lease allows subletting.

-- Leave contact information for emergencies.

Source: Scottsdale State Farm insurance agent Tom Napral