How can I market short term rental without acquiring any permiti

Mike S imai

Member since 2022 · 1 post · 0 votes

How can I market short term rental without acquiring any permit?

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Paul Sandhu

Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes

I put a billboard up in the parking lot where refinery contractors have to park. I just rent to contractors. They are like me. Big burly guys that drive jacked up 4x4s and smell like diesel fuel. They have neck tats, I don't.

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Avery CarlBusiness Member
Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
4y
If you're trying not to get a permit because you don't want to get caught by the city or county I would advise not doing that.
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Paul Sandhu
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
4y
I put a billboard up in the parking lot where refinery contractors have to park. I just rent to contractors. They are like me. Big burly guys that drive jacked up 4x4s and smell like diesel fuel. They have neck tats, I don't.
5 Reply
Dave StokleyBusiness Member
Property Manager · Cleveland, OH · Member since 2015 · 705 posts · 799 votes
4y
Does your city/state require a permit? You need to call the local zoning authorities and find out what the laws are.
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Dan Maciejewski
Realtor · PInellas County Largo, FL · Member since 2016 · 902 posts · 810 votes
4y
Realistically, advertising will alert the authorities that you are operating a short term rental. There is no practical way to advertise "only" to guests and not the authorities, as well.
From a business perspective, it's not a great idea to start a business that goes against local ordinances. Or to sidestep the permit process.
It also looks like the city of LA at least, is actively enforcing STR ordinances.
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Joshua MessingerBusiness Member
Property Manager · Poconos, PA · Member since 2020 · 443 posts · 264 votes
4y
Hey @Mike S imai!
I would not advise doing this. If you are advertising on any platform it will make it to the authorities/HOA/townships someway. Also, a new trend that's been happening across PA is that if you get caught doing this your property will then be labeled as a "delinquent" property and you will no longer be able to get an STR license or be able to operate w/ that property AND you will get hit with a large fine.
If you have any more questions don't hesitate to reach out!
All the best,
Josh
[email protected]484-986-5012
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Dan Maciejewski
Realtor · PInellas County Largo, FL · Member since 2016 · 902 posts · 810 votes
4y
Quote from @Joshua Messinger:

Hey @Mike S imai!
I would not advise doing this. If you are advertising on any platform it will make it to the authorities/HOA/townships someway. Also, a new trend that's been happening across PA is that if you get caught doing this your property will then be labeled as a "delinquent" property and you will no longer be able to get an STR license or be able to operate w/ that property AND you will get hit with a large fine.
If you have any more questions don't hesitate to reach out!
All the best,
Josh
If he's in LA County, it looks like they are denying permits for any property that has been in violation within the past 6 years!
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
4y
I swear I am getting meaner as time moves forward. Just don't do it.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Quote from @Mike S imai:

How can I market short term rental without acquiring any permit?

If one is required in the city where your STR is, then the answer is: you can't.
1 Reply
Alex Talcott
Attorney · Durham, NH · Member since 2019 · 292 posts · 126 votes
4y
Lawyer here, so, "It depends," per usual.
One of the states I own in even shakes you down for a permitting/licensing fee annually for operating a LTR.
2 Reply
James Carlson
Real Estate Agent · Colorado | stan.store/JamesCarlson · Member since 2014 · 2k+ posts · 2k+ votes
4y
There's no legitimate answer that you'll want to hear. Most jurisdictions of any size have hired companies that track this stuff. In Denver, for instance, they initially hired a company called Host Compliance to monitor STRs and sites like Airbnb and VRBO. Last year, they changed directions and awarded the contract to Linebarger Analytics and Information Services. Either way, the companies scan and scrape data from those sites looking for license numbers. The other market we work in -- Colorado Springs -- does not have a company monitoring short-term rental compliance, but word from the planning department people I talk to is that they will start to do so.
That's all to say that trying to skirt the law when it comes to vacation rentals is a short-term game. The cities will always find you eventually. If you're risk-tolerant, then play the game and have a plan B and plan C for when the city comes down on you. (And know what the STR law says about first-time offender fines.) If you're risk-averse, then find another way. Medium-term rentals to traveling nurses and remote workers is a huge market in Denver and Colorado Springs. I imagine it's the same in L.A.
Whatever you decide, good luck!
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Joshua MessingerBusiness Member
Property Manager · Poconos, PA · Member since 2020 · 443 posts · 264 votes
4y
Quote from @Dan Maciejewski:

Quote from @Joshua Messinger:

Hey @Mike S imai!
I would not advise doing this. If you are advertising on any platform it will make it to the authorities/HOA/townships someway. Also, a new trend that's been happening across PA is that if you get caught doing this your property will then be labeled as a "delinquent" property and you will no longer be able to get an STR license or be able to operate w/ that property AND you will get hit with a large fine.
If you have any more questions don't hesitate to reach out!
All the best,
Josh
If he's in LA County, it looks like they are denying permits for any property that has been in violation within the past 6 years!
Crazy!! It's only going to get stricter as tech improves too! Sooner or later I highly doubt anyone will be able to avoid their counties governance.
[email protected]484-986-5012
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Sergey A. Petrov
Real Estate Consultant · Seattle, WA · Member since 2022 · 1k+ posts · 784 votes
4y
How do I start advertising my open heart surgery services without getting a license to practice medicine?
5 Reply
Matt M.
Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
4y
Quote from @Mike S imai:

How can I market short term rental without acquiring any permit?

Good way to start your business, trying to be sneaky and fly under the radar. Good luck with that
2 Reply
Steve K.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
4y
@Mike S imai I know some people who get away with it and one person who got a $10k fine, ignored it too, and ended up paying $25k. I wouldn’t want to have to always worry about it personally, and there are plenty of other ways to invest.
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Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
I see a lot of answers that are not incorrect, but they do not try to answer the question.
In many jurisdictions 30+ day rentals are not considered short-term and are exempt from the short-term rental rules. This implies in these jurisdictions you can rent a furnished unit for stays that are 30+ days. This sometimes referred to as mid-term rentals. Midterm furnished rentals typically provide a rent that is between STR and Long term rental (LTR) units. On the positive, the 30+ day rentals are much easier to self manage. In addition if the property is a property that you want to enjoy on occasion, the gap between tenants provides an opportunity to enjoy the property.
I know a lady that due to Condo HOA rules is doing 30+ day rentals. She is so far doing better than I expected for her location. Her location would not be a good STR location but seems to be a very good 30+ day rental. So far her tenants have been mostly nurses and her unit is within 10 minutes drive of multiple medical complexes.
Good luck
1 Reply
Jarrod Kohl
Boston, MA · Member since 2017 · 209 posts · 126 votes
4y
Quote from @James Carlson:

There's no legitimate answer that you'll want to hear. Most jurisdictions of any size have hired companies that track this stuff. In Denver, for instance, they initially hired a company called Host Compliance to monitor STRs and sites like Airbnb and VRBO. Last year, they changed directions and awarded the contract to Linebarger Analytics and Information Services. Either way, the companies scan and scrape data from those sites looking for license numbers. The other market we work in -- Colorado Springs -- does not have a company monitoring short-term rental compliance, but word from the planning department people I talk to is that they will start to do so.
That's all to say that trying to skirt the law when it comes to vacation rentals is a short-term game. The cities will always find you eventually. If you're risk-tolerant, then play the game and have a plan B and plan C for when the city comes down on you. (And know what the STR law says about first-time offender fines.) If you're risk-averse, then find another way. Medium-term rentals to traveling nurses and remote workers is a huge market in Denver and Colorado Springs. I imagine it's the same in L.A.
Whatever you decide, good luck!

....that would be an easy business model if you knew a few polictianss. Scrape some data and NARC on anyone running an Airbnbn.
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
Quote from @Mike S imai:

How can I market short term rental without acquiring any permit?

You won't find any successful investors on BP that advocate breaking the law. Very few people get wealthy by cheating.
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Luka Milicevic
Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
4y
@Mike S imai
1-You won't get the exposure you need in order to make it worth it to do an STR. Think about trying to sell your house by not advertising it on Zillow, Redfin, etc.
2-The city will find out at some point anyway.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Quote from @Nathan Gesner:

Unless you count everyone in Washington.....
1 Reply
Chris John
Member since 2020 · 671 posts · 937 votes
4y
@Mike S imai
I'll be the contrarian, "DO IT! DO IT! DO IT!"
Just kidding... kinda.
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Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
4y
I want to stay at luxury 5-star hotel that doesn't have hotel license too :) as long as they provide 85% discount. j/k...
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Rick Albert
Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
4y
In business, you want to do things right. In this day and age, it isn't a matter of if you will get caught, it's when.
The last thing you want is to get caught, then you try to do the right thing, but they ban you altogether.
It will also be harder later on if you want to do business with people (hard money lenders, investors, etc.) if they are know you are trying to go around the system. It adds a layer of risk that people don't want to deal with.
1 Reply
Dan H.Pro Member
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
Quote from @Nathan Gesner:

Quote from @Mike S imai:

How can I market short term rental without acquiring any permit?

You won't find any successful investors on BP that advocate breaking the law. Very few people get wealthy by cheating.

>Very few people get wealthy by cheating.

I agree with your sentiment but do not know if it is factual.

In my market there are areas that enforce permitting to an extreme and areas that have minimal enforcement and sometimes they are the same jurisdiction. Rancho Bernardo and City Heights are both the city of San Diego. In City Heights my guess is that nearly 50% of properties have an illegal unit (either not permitted or not permitted to the extent of current use). In Rancho Bernardo there is few properties with significant unpermitted work. The enforcement seems to be what is tolerated for the area.

I look at a lot of off market properties in my market. 90%+ are either huge fixer uppers or have a significant unpermitted items that increase the risk level. It is rare to encounter a turn key property with no risk items that is off market (<10%).

There are many successful investors who are successful because they can properly access the risk level including the upside versus the downside. They have contingency plans for if things go wrong.

For example, I would be more willing to purchase a property in City Heights with an unpermitted unit than I would be willing to purchase a similar property in Rancho Bernardo. It is my belief that the illegal unit likely will never be flagged in City Heights (or at least not for many years), but is very likely to be flagged in Rancho Bernardo if I were to attempt to rent it out. For me to purchase the property in Rancho Bernardo it would have to be priced such that it would make sense when (not if) I got caught and needed to address the issues.

Note it could be stated that the two big players in STRs cheated. When STRs started it is dubious whether they were permitted in the neighborhoods. However, it was years before VRBO or AirBnB collected occupancy taxes. The owner's were very unlikely to have been paying them without it being collected by the STR operators. This was definitely cheating.

Uber and Lyft both started without being licensed operators in most (all?) cities. They broke many rules to get started and achieve their growth.

We have a neighbor property owner that is building an ADU on their property. They built it such that they are using an easement that they have no right to use. It is a risk they took that may not work out for them. They have been good neighbors, but we (I do not own the land with the easement but am one of those legally entitled to the easement) are not likely to just let them use the easement. They will need to do something to make this work or the access to their ADU will need to be pedestrian only going past the side of the current structure. I was thinking if they resurface the entire asphalt (not just to their access - they did not pay for any of the initial asphalt or purchase it) and agree to 25% of maintenance forever (they would be the 4th owner to use the access) then maybe we should allow access. They are either going to encounter some costs that I suspect they were hoping to avoid or use a contingency plan (accessing by pedestrian access only going through existing unit's yard).

As for the unlicensed STR, to market the STR would make it easy for a jurisdiction to find out about the unlicensed STR. What would the jurisdiction do when (again not likely if) it finds out. If the penalty is $100 for first offense, it likely is worth making it an STR and seeing how long it takes to get caught. Then same analysis for 2nd offense. Etc. If going the unlicensed STR route, it is important to have a plan B (ideally multiple contingencies) for when it no longer makes sense to run an unlicensed STR.

It comes down to proper risk analysis, understanding the consequences, and having solid contingency plans. If you do these correctly, you can succeed taking certain well analyzed risks including "cheating" (i.e. unpermitted structures or extensions, STR arbitrage against lease terms, not paying occupancy tax (in the distant past), relying on an easement that does not exist, etc).
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Tracy StreichPro Member
Real Estate Broker · Tulsa- OKC Oklahoma · Member since 2017 · 868 posts · 801 votes
4y
Just do the right thing, You have to factor the permit and taxes into your cost. If it does not make sense with those numbers do a long term rental or just move on.
[email protected]918-728-8080
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Good points @Dan H.
I had a LTR right on the boundary of City Heights and North Park (92104 zip code) for years so I can say you are correct about the illegal units in the area. The residents don't care and neither does the city.
And it's not about doing the 'right thing' as if it were a moral or ethical issue. Just because the Government makes a law does not make it right/moral/ethical....it is just an arbitrary concept that some one wanted made into law because it suited some larger purpose (sometime a good purpose, sometimes not :-)
The 'right thing' here is to make a good business decision that will make you and your family a lot of money.
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