April 05, 2018

Tips on Short-Term Rental Regulations and Rules

April 05, 2018

Tips on Short-Term Rental Regulations and Rules

Just a decade ago, hardly anyone rented out their home to strangers for a weekend. As the vacation rental market has grown from a simple exchange of a spare room for some extra cash to a multi-million dollar industry, so have the rules and regulations surrounding short-term rentals.

If you're thinking about entering the short-term rental arena either by renting out space in your current home or investing in a property for the sole purpose of generating income, you may want to brush up on the short term rental regulations before making the big leap. And if you're an old hat in the business, you may still want to take an annual look at changes in the laws to see how they may affect your business moving forward.
Here are some tips on short term rental regulations.

1. Stay Abreast of Zoning Law Changes

Zoning laws are forever changing, and many cities have developed new policies about short-term rentals. Do a little research to see what your city says about operating a vacation rental. For instance, some areas may allow you to rent out a home if it's located in a commercial zone but not in a residential zone. Public hearings are constantly being posted so keep an eye out for upcoming hearings that might affect short-term rentals in the future, especially if you plan on investing in additional properties to build your business.
2. Obtain and Renew Permits and Licenses

Today, you, as a homeowner, are often required to secure and renew permits and licenses to legally publicize that you have space to rent out on short-term rental sites. Check to see what the requirements are in your city. It may be as simple as registering for a permit. Some cities, however, may require that you register the home as a business and adhere to occupancy rules. These permit and license fees are simply part of your operating cost, and they are lower than fines for non-compliance.
3. Understand Home Owner Association Rules

Many subdivisions, condominiums and apartments may have home owner associations that set guidelines that all residents are expected to follow. Typically, HOAs help set the atmosphere for a particular community and work to build positive neighborhood experiences. However, some HOAs may have specific rules and regulations about renting out your property. Some associations may forbid short-term rentals to protect their community from transient visitors and excess noise. Others may be more lenient but have particular rules regarding community resources like swimming pools, trash collection or noise levels.

4. Watch the Changing Tax Laws

Just like any business, running a short-term rental will affect your taxes. If the business is wrapped up in your personal home, usage issues as well as income will need to be spelled out to ensure that correct taxes are paid and that you receive correct exemptions and credits. Since tax laws tend to change from year to year, it is worth the investment to meet with an accountant to help sort it all out. They can provide counsel on not only federal taxes, but on state and local taxes as well.
5. Lean on a Property Management Partner

Property management companies like Air Concierge are experts at keeping up with the zoning regulations, changes in the tax code, and deciphering HOA rules. Partnering with a property manager can simplify all this as well as other aspects of managing short-term rentals.
If you want to partner with a true end-to-end management company, CONTACT US HERE

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