September 06, 2018

Airbnb Regulations & Rules: Everything You Need to Know

September 06, 2018

Airbnb Regulations & Rules: Everything You Need to Know

Want to make sure you are following Airbnb regulations and rules? Read this article!

When Airbnb was simply a link between a few people looking for a cheap place to sleep for the night and a couple of folks with extra air mattresses, no one paid much attention. Today, as the short-term vacation rental market has boomed into a million dollar industry, everyone is taking notice. With that attention comes the potential for a lot of red tape before you can operate an Airbnb rental lawfully and within various rules and regulations. Here are some things to check before starting a new Airbnb rental. 
Does your city or town permit short-term vacation rentals? 
Each municipality has different rules and regulations for short-term vacation rentals. Some cities and towns have no laws pertaining to them at all while others have completely outlawed them. The majority are somewhere in between, usually enforcing zoning rules, taxation issues, licensing requirements or hotel ordinances in association with them. Airbnb rules are based on these local ordinances first and foremost. 

You can visit Airbnb's website to see if your city's regulations are listed, or you can simply conduct an online search to see if local laws are available on government web sites. At last resort, contact your local government offices directly to see what the exact laws are in your area. It is worth the investment to understand what is legal and illegal as well as how many forms, fees, and fines are required before launching your vacation rental. Airbnb regulations mirror these rules, which must be followed in order to list on the site at all. 

Which permits and licenses are required? 

Many cities today see short-term vacation rental as a legitimate business whether you're renting out an extra bedroom or have a dozen homes up for short-term occupancy. As a result, you may be considered a real estate owner and be required to obtain a license to operate your rental. Local governments may dub these permits and licenses as a TOT certificate, lodgers tax license, land use permit or business license. All lawfully required permits and licenses must be obtained before you are allowed to list your home on Airbnb. 

What are the taxation requirements? 

Check with your local government about taxation rules and regulations. In some cities and towns, Airbnb must collect a local occupancy tax for you. In other areas, you will need to report your income related to your short-term rental on your business tax forms each year. Depending on your earnings, you may be required to register for a tax identification number or pay quarterly taxes throughout the year. Check with your accountant to clearly understand what is required, what the tax expense will be on an annual basis, and how you are required to pay taxes. 

Are renovations necessary to meet safety and insurance requirements? 

Safety requirements may be dictated by the local government or your insurance provider. You'll need to check all these rules and regulations and make sure each of your properties are in compliance. These regulations may include the number and placement of smoke detectors as well as the location and number of exits in case of fire or other emergency. You'll want to make sure your properties meet all local building code requirements as well before listing your site. Airbnb rules require that local safety ordinances are met. 

What do the neighbors say? 

It's always a smart thing to check with your neighbors about renting out your home, but in today's day and age, many neighborhood or home owner's associations have more formal rules and regulations. Airbnb regulations state that your short-term vacation rental must be in compliance with homeowner or neighborhood association by-laws or the rules of a particular apartment or condominium complex. 

You'll want to clear things like whether your short-term rental guests can use neighborhood amenities such as a pool or playground. You'll to be sure that your guests follow the neighborhood rules about pets, smoking, parking and noise. Your neighborhood association may require you to pay additional fees if your business means a heavier load on neighborhood services such as garbage collection. You'll want to be honest and upfront about those issues and incorporate those expenses into your business balance sheet. 

Airbnb does not allow you to place unreasonable rules and regulations on your guests so if your red tape list is getting long and spilling into guest requirements, your listing could be rejected from the site. This fact makes doing your research and homework up front very important. The last thing you want to do is the buy or renovate a property that will not be allowed to be listed on Airbnb. 

In most cases, short-term vacation rental businesses can be established and maintained with proper licensing, zoning and permit requirements as well as some basic common courtesy considerations. The income generated by this industry is beneficial to most communities and often a welcomed addition. 

The key consideration for those entering the short-term vacation rental market is the cost, time and work associated with complying with and managing the red tape rules and regulations. You'll want to make sure you take all of that into consideration along with the cost of purchasing, updating and maintaining a property for a business. Conduct a thorough study into what it takes to run a short-term vacation rental by talking with others in your area who are succeeding or with a property management company that has experience in the particular market you are considering.

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