When an industry is growing as fast as short-term rentals, it’s not surprising that there are growing hassles.
the main points
- Local governments are trying to deal with the number of short-term rental units that are changing the landscape of their cities.
- Owners of short-term rental units may soon find themselves forced to change the way they do business or unable to rent out their units.
- Complying with local laws or selling their property while the market is still hot are two options.
Airbnb is the leader in short-term home rentals. And way back in 2008, when the company first launched, it was all rainbows and unicorns. If city leaders were worried about what would happen if the industry grew too big, they didn’t complain. After all, short-term rentals provide tourists with a place to stay when they visit a new city.
The clamor for concern did not become loud enough to be picked up by the media for several years. By 2016, cities around the world were actively looking for ways to rein in short-term rents. Problems were plentiful – from a lack of security and safety systems to locals angry that their neighborhoods had been reduced to quasi-hotels.
If you’re an Airbnb host and rely on short-term rentals to supplement your income, you may find yourself stuck with new laws affecting hosts around the world.
Aside from issues of taxes, noise, and safety regulations, cities are concerned with the number of housing units purchased by individuals and investment companies for use as short-term rentals.
To put this in perspective, Airbnb hosts now manage more than 6 million listings in more than 100,000 cities around the world, and purchases are not preparing to slow down. In 2020 alone, the sale of vacation homes grew 44% year-over-year, and real estate investment firms across the US plan to spend billions of dollars on additional properties.
If you own an Airbnb rental unit in a city that is facing a serious decline in housing stock and High rents, you may find yourself dealing with an entirely new set of rental laws or unable to rent at all. Here’s a sampling of cities cracking down on Airbnb’s practices:
- New York City
- Santa Monica
- Charleston, South Carolina
- San Francisco
- Los Angeles
- Las vigas
Whether managing your Airbnb property is a full-time job or a portfolio Side hustleIt might be a good idea to make contingency plans for the day your local government imposes new laws.
If things are going well for you now and Airbnb hosting means more money in your account Bank accountChange can be a hard pill to swallow. However, having a plan in your back pocket can reduce the level of stress you experience.
1. Keep your ear on the ground
Don’t wait for new rules, regulations, or laws to surprise you. Let’s say you own an Airbnb near Lake Placid. No matter where you live full time, keep track of what’s happening at town hall meetings. Follow any updates regarding short term rentals.
The idea is to stay ahead of problems so they don’t catch you off guard. For example, if your tenant currently has three smoke detectors and the city calls for four, add that fourth before you are asked.
2. Compliance with the new rules and regulations
It is possible to stay compliant, even if you don’t like the changes put in place by the local government. Although providing a laundry list of things that need to change may seem intrusive, there is no reason to fight the inevitable. Make it easy on yourself by doing what is required of you.
The good news? Business-related expenses can usually be written off from taxes.
3. Sell the property when the market is hot
Although the market has calmed down a bit due to the rise in interest rates, it is still a good time to make a profit. If you have an attractive property in a nice area, consider putting it up for sale. If the new rules make it difficult or impossible for you to continue using the property as an Airbnb, selling while prices are still high may make more sense.
The current issue appears to be a conflict between the rights of business owners and the needs of the local population. While there aren’t necessarily any good guys or bad guys here, compromises will be required in all parts.
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