BPers, sigh... I thought I did my due diligence, but apparently not so. We bought a house in Hampon, VA, it is 15 min walk to the beach. Instead of putting it in the rental market, I wanted to try airbnb it. So I researched to see if there is regulation there, but it seems the city is pretty friendly with STR. and AirDNA shows more than 100 properties there in the same zip code! (I was aware some stricter regulation in Virginia Beach) So, I got a note from the code officer today about the violation. Many neighbors complaint about the properties being used as STR, and it was even escalated to the mayor of the city. I was told I had to use the property as my primary residence (stay there more than 6 months a year), then I can run a STR as accessory and that applies to the entire city, not just residential zoning. and since I don't, I am in violation, and I have to cease the operation in a month. (and that's after I just got my super host status :( what have I missed? there is no specific language on the city website detailing the information. I asked there are more than 100 airbnb in that zip code, and many have multiple listings, so they are not using them as primary homes, she told me they don't have enough people to investigate every property, but if they get complaints, they look into it one by one. So is it just my bad luck, or should I have bribed my neighbors? Not sure what else can be done at this point, I actually just started enjoying running the business and getting a hang of it.

STR hiccup! What to do!?

Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes

Can you lease it to someone who wants to live there during the offseason and have them run the AirBnB and split profits?

Can you do mid-term rentals to offset losses? (30-Days) This might technically not be in violation of the short-term rental rules of the city - some homework to potentially do.

I am sorry to hear about this problem, and hope that others have more helpful advice or suggestions than I have!

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6 Reply

Dan Maciejewski

Realtor · PInellas County Largo, FL · Member since 2016 · 902 posts · 810 votes

4y

Ooof, that's rough. 1st, I would try to find that actual ordinance just for my own peace of mind. It looks like Hampton, VA defines a short term rental as 80% of business receipts coming from less than 92 days rental period. Also defined here.

A quick search doesn't show me the need to live in it as a primary but I've only looked for a few minutes.

Maybe see if you can find a Real Estate Lawyer that knows the business and can give you a consult. If you do decide that you need to sell, I would sell sooner rather than later, so I would move quickly in trying to find out if code enforcement is "misinformed" and/or if you have to fight city hall. Or if you even want to. I say sooner because another quick look says the market has "only" seen 9% appreciation YOY, so the rising interest rates may hit the buyer market a bit in the next few months.

If you can't use it as an STR, hopefully it still makes sense as a long term rental, so you can cash flow, though!

I hope it works out! Let us know what you find out.

5 Reply

Scott TrenchPro Member

Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes

4y

@Dan Maciejewski That's great information and advice.

Podcast Guest on Show #223

1 Reply

Joanne Tsai

OP

Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes

4y

Quote from @Dan Maciejewski:

Ooof, that's rough. 1st, I would try to find that actual ordinance just for my own peace of mind. It looks like Hampton, VA defines a short term rental as 80% of business receipts coming from less than 92 days rental period. Also defined here.

A quick search doesn't show me the need to live in it as a primary but I've only looked for a few minutes.

Maybe see if you can find a Real Estate Lawyer that knows the business and can give you a consult. If you do decide that you need to sell, I would sell sooner rather than later, so I would move quickly in trying to find out if code enforcement is "misinformed" and/or if you have to fight city hall. Or if you even want to. I say sooner because another quick look says the market has "only" seen 9% appreciation YOY, so the rising interest rates may hit the buyer market a bit in the next few months.

If you can't use it as an STR, hopefully it still makes sense as a long term rental, so you can cash flow, though!

I hope it works out! Let us know what you find out.

thanks for the tips! yes, I did research it before furnishing the house and most website told me "Hampton is the most STR friendly city"! I will need to find in that 200 page ordinance to see if the officer is correct, but I don't think she would provide me the wrong information, at least not intentionally.
Well, yes, the rental market is in very high demand in the area given it's close to a few military bases. But I spent so much effort furnishing the house out of state, and it's decorated nicely... and yes, if all venues fail, it will cash flow in the long term rental market, I just have to go through the hassle of selling furniture that I hand picked and some "refinished".

0 Reply

Joanne Tsai

OP

Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes

4y

Quote from @Scott Trench:

Can you lease it to someone who wants to live there during the offseason and have them run the AirBnB and split profits?

Can you do mid-term rentals to offset losses? (30-Days) This might technically not be in violation of the short-term rental rules of the city - some homework to potentially do.

I am sorry to hear about this problem, and hope that others have more helpful advice or suggestions than I have!

is your suggestion considered as a loophole? now, I am thinking one of the neighbors must be very annoyed with STR concept, cuz I've only hosted 6 groups and they have been respectful and quiet. my guess is they will just keep complaining and the splitting profit scenario will get me in trouble eventually if that's considered as exploiting the loophole? (I have no idea....)

yes, so you are correct in that I can list it for monthly rental or longer. I can try furnished finder or list it as monthly on Zillow....

0 Reply

Bill B.

Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes

4y

Can you use Dan’s suggestion and do 2 x 3 month rentals? Then you could do 8 under 3 month rentals and stay in the right side of the 80% of business being under 92 days. Something like…

2 x 3 months

2 x 1 month

6 x in last 4 months (2-3 weeks each, even shorter if there’s some vacancy)

Or 2 x 3 months, 6 x 1 months. I assume certain months pay much better. Either grab most of the money with those 2 x 3 month rentals. If there’s no money to be made in the off season do a 6-8 month cheap lease to pay the bills during off season and 4 money maker leases. Then you keep traffic down as well.

0 Reply

Carter Fleck

Real Estate Consultant · Virginia Beach, VA · Member since 2022 · 26 posts · 22 votes

4y

@Joanne Tsai That is so frustrating! I am sorry you have to go through that. As they say, there are winners and there are learners. Hopefully this won't hit you too hard. I think someone may have mentioned this already, but I would check out two options if you for sure cannot STR:

1) Corporate rentals (30+ day rentals that tend to gross more than LTR). Since it is close to the beach, you would probably look at 1.5-2x the amount of income if you do corporate rentals where you lease it out for 1-3 months at a time. Prices should peak in the summer time since it is close to the beach.

2) Rent out the house by room by using a master lease (check the Hampton laws on this). This would most likely 2x your revenue rather than just renting out the whole house as one LTR lease.

I am over here in Virginia Beach, so let me know if I can help with anything! Good luck!

4 Reply

Joanne Tsai

OP

Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes

4y

Quote from @Carter Fleck:

@Joanne Tsai That is so frustrating! I am sorry you have to go through that. As they say, there are winners and there are learners. Hopefully this won't hit you too hard. I think someone may have mentioned this already, but I would check out two options if you for sure cannot STR:

1) Corporate rentals (30+ day rentals that tend to gross more than LTR). Since it is close to the beach, you would probably look at 1.5-2x the amount of income if you do corporate rentals where you lease it out for 1-3 months at a time. Prices should peak in the summer time since it is close to the beach.

2) Rent out the house by room by using a master lease (check the Hampton laws on this). This would most likely 2x your revenue rather than just renting out the whole house as one LTR lease.

I am over here in Virginia Beach, so let me know if I can help with anything! Good luck!

@Carter Fleck do you mind sharing how one can find the leads of corporate rentals?

do you know any RE attorneys? would you please DM me if you know anyone. Still till now, we can't find ordinance where it states it requires primary residency to be the requirement to run STR in Hampton VA. Thanks!

0 Reply

Michael Plante

Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes

4y

First thing I would do is call a local real estate Atty and ask them

0 Reply

Joanne Tsai

OP

Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes

4y

thanks for everyone's input....

so I just learned more information on this "violation". I listed my STR on 4/16, and the violation was sent to the VA address on 4/22, and my first guest didn't come in till the second week of May.

It led me to think, not neighbors complaint led to this "investigation". someone reported the listing before I even opened for business. is this being done by other competitions?

1 Reply

Patti RobertsonBusiness Member

Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes

4y

If you want an attorney to take a look I can recommend a few real estate focuses lawyers who operate on the Peninsula. Mike Hamar with Caplan Law. Jeff Anderson with Anderson Pittman. Hangar Law also has an office over there, but I don't have a specific attorney to recommend.

757-472-2547

0 Reply

Carter Fleck

Real Estate Consultant · Virginia Beach, VA · Member since 2022 · 26 posts · 22 votes

4y

@Joanne Tsai looks like @Patti Robertson is on the ball for you for attorneys. As far as leads for corporate rentals, I honestly don't know which channels you would rent that out on -- the corporate rentals we have in our portfolio are managed by an outside company. I would recommend the company we use, but they are not taking on any additional clients for corporate rentals at the moment. I would assume VRBO or other channels have this option. A quick google search lead me to this website and many more, so I would do that!

https://www.corporatehousingby...

0 Reply

Conner Olsen

Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes

4y

@Joanne Tsai I would look at medium-term rentals first (30+ days). My city has rules against short term rentals which they define as anything rented less than 30 days but nothing against things rented longer than 30 days. So in the eyes of the city, I offer a long-term furnished rental that is marketed on Airbnb and VRBO. My gross rent is double what it was as a LTR. Hope that helps!

0 Reply

Patti RobertsonBusiness Member

Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes

4y

@Dezmon Robertson (same last name as me but no relation) is taking on short term and corporate rentals now in Hampton Roads. He is the guy I go to whenever I have a question about short-term laws.

757-472-2547

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

Quote from @Joanne Tsai:

Quote from @Dan Maciejewski:

Ooof, that's rough. 1st, I would try to find that actual ordinance just for my own peace of mind. It looks like Hampton, VA defines a short term rental as 80% of business receipts coming from less than 92 days rental period. Also defined here.

A quick search doesn't show me the need to live in it as a primary but I've only looked for a few minutes.

Maybe see if you can find a Real Estate Lawyer that knows the business and can give you a consult. If you do decide that you need to sell, I would sell sooner rather than later, so I would move quickly in trying to find out if code enforcement is "misinformed" and/or if you have to fight city hall. Or if you even want to. I say sooner because another quick look says the market has "only" seen 9% appreciation YOY, so the rising interest rates may hit the buyer market a bit in the next few months.

If you can't use it as an STR, hopefully it still makes sense as a long term rental, so you can cash flow, though!

I hope it works out! Let us know what you find out.

thanks for the tips! yes, I did research it before furnishing the house and most website told me "Hampton is the most STR friendly city"! I will need to find in that 200 page ordinance to see if the officer is correct, but I don't think she would provide me the wrong information, at least not intentionally.
Well, yes, the rental market is in very high demand in the area given it's close to a few military bases. But I spent so much effort furnishing the house out of state, and it's decorated nicely... and yes, if all venues fail, it will cash flow in the long term rental market, I just have to go through the hassle of selling furniture that I hand picked and some "refinished".

dont sell the furniture rent it as a fully furnished rental you will be surprised what a premium it will bring.. on my Vegas property i get double the standard rent being fully furnished.. with in 6 months the furniture is paid for then its gravy from then on.. there is a BP member i think in Austin who is doing this as well..

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

Quote from @Conner Olsen:

@Joanne Tsai I would look at medium-term rentals first (30+ days). My city has rules against short term rentals which they define as anything rented less than 30 days but nothing against things rented longer than 30 days. So in the eyes of the city, I offer a long-term furnished rental that is marketed on Airbnb and VRBO. My gross rent is double what it was as a LTR. Hope that helps!

I just mentioned you in my reply.. I do the same in Vegas. brilliant model really is.

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0 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

4y

Even though my city is known as 'STR friendly', I still went down in person and asked to speak with the person in charge of STRs. Not some staffer who may or may not know the actual law.

So if I were you, I would go down to the city yourself and have a face-to-face with the person in charge of STRs.

1 Reply

Joanne Tsai

OP

Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes

4y

Quote from @Bruce Woodruff:

Even though my city is known as 'STR friendly', I still went down in person and asked to speak with the person in charge of STRs. Not some staffer who may or may not know the actual law.

So if I were you, I would go down to the city yourself and have a face-to-face with the person in charge of STRs.

@Bruce Woodruff, it's def lesson learned, though we are out of state and we probably couldn't have gone down to do this in person though. so on the violation note, it also suggests "we can meet in person on site to discuss", I just felt it was a little weird, what clarification cannot be discussed over a phone call? what additional value does F2F really bring? in all fairness, we bought the house remotely...... am I missing something? appreciate your input.

0 Reply

Joanne Tsai

OP

Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes

4y

Quote from @Jay Hinrichs:

Quote from @Conner Olsen:

@Joanne Tsai I would look at medium-term rentals first (30+ days). My city has rules against short term rentals which they define as anything rented less than 30 days but nothing against things rented longer than 30 days. So in the eyes of the city, I offer a long-term furnished rental that is marketed on Airbnb and VRBO. My gross rent is double what it was as a LTR. Hope that helps!

I just mentioned you in my reply.. I do the same in Vegas. brilliant model really is.

yeah, I just listed it on Furnished finder and it seems it's already getting some interests. Will be talking to a lawyer today, if I have no choice but to close STR, I will explore other opportunities. Thanks!

0 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

4y

Face to face means a lot! When the person in charge sees you as a real person at the real property, a lot of things can change real fast.

I think it would be worth it to fly into the property and meet with the person in charge. It's a lot of money you're leaving on the table.....

0 Reply

Natalie Schanne

Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes

4y

@Joanne Tsai - I would find a local person who can help advocate for you asap - whether that’s your agent or another Airbnb host who you offer to “cohost” your house or pay outright. There are “smoothers” - people who help businesses… Did anyone setting up your house tell the neighbors you plan to str it? Sounds like a picky neighbor if you say you listed the house mid April and the code violation came shortly after, before you even had any parties or cops. (Make sure to set up informed alert for post mail.). This person must also be well connected for the mayor to care.

If you cannot get the str to work, it seems like you may choose to sell. (Staging furniture included!)

Depending on your proximity to the bases and the size of your house, I would consider doing a “master lease” with bedroom rentals (let’s say $700-1000/mo per person x 4-6 bedrooms) or month to month corporate or travel nurse rentals (furnished finder) so you have the best of both worlds. If you do room rentals, having a long term “house guardian” type responsible person can be useful. The avatar of your target tenant is a solo working professional.

1 Reply

Joanne Tsai

OP

Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes

4y

@Natalie Schanne

Do you have any tips of navigating furnished finder? I get several requests on booking almost immediately, but now I’m a little concerned given I have never rented it out on furnished finder. Do I do credit and background check or even the lease from their website? Do I ask to see their employment or assignment letters? Or what do people typically do to protect themselves? What terms do I need in the lease?

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STR hiccup! What to do!?

STR hiccup! What to do!?

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