Township changed ordinance rules for Airbnb, HELP!

[James Lauer]

Hello all,

I wanted to ask for everyone's help for a fairly large problem I am having for a rental I purchased. I purchased a duplex at a shore town in NJ. My township has changed the ordinance to 30 day MINIMUM for rentals. Although I can still get rentals for 1 month at a decent premium, it is not anywhere close to how much I can make through STR like airbnb/vrbo etc. Essentially my bottom line will likely be effected nearly 30-40% because of discounts I will have to give for longer stays.

I guess my questions are the following:

1. Has this happened to you? What did you do ? Did you sell, did you just continue to rent and accept fines/penalties, did you shift to mid term or long term rental?

2. Does anyone know if there is a way to remove public reviews on the Airbnb app, essentially the township zoning officer looks for properties in the town with more than a few reviews and that is how she determines if people are still renting the property out on a short term basis. I know this because I own another duplex and have ignored the rules the previous summer.

3. Has anyone hired attorneys or legal counsel to determine if what these towns are doing is actually legal, when it comes to enforcing STR rules?

This whole thing is very upsetting and silly as I see it to be a completely nonsensical rule change and not well thought out by my township.

Sorry if I rambled a bit, ANY HELP, is greatly appreciated!! Thank you so much

James

[Jay Hinrichs]

Quote from @Sarah Kensinger:

Quote from @Jay Hinrichs:

Quote from @Sarah Kensinger:

Quote from @Jay Hinrichs:

Quote from @Sarah Kensinger:

Quote from @Jay Hinrichs:

Quote from @Sarah Kensinger:

I feel your pain, very much so! It's great when a property cash-flows as a LTR as well as a STR, but it's a hard pill to shallow when you know the cash-flow could double or triple as a STR. But instead, a few people with their agenda pass policies that stand in the way.

to play devils advocate here.. What agenda ?   folks that paid a lot of money for an owner occ house and a stable neighborhood might have an issue with the property being run as a hotel?
Seems to me those are pretty fair agendas to have..  also Seems to me STR should be in areas ZONED for it and permitted for it so homeowners if they want to buy there know going in that there will be transient use next to them. Seems to me its only an Agenda because your in the bizz and or you dont have to live next to it.. I would be Uber pissed off if one of my neighbors started to use their house as a STR.  so other side of the coin. 

I know in Charleston SC were i built quite few homes downtown its highly regulated as it should be and if your zoned and permitted then the price reflects it on the purchase side they are sold as income props.

Yes, but some of us deal with Karen and Karen so that changes everything. I'm surprised you're on this forum if that's how you feel about STR. Some of us are in vacation markets that only survive due to the visitors that frequent the area, and the STR that houses all the guests. If someone decides to live there, that is their choice. I would happily live next to the homes we and other similar operators host, much better than the guys that have the marshals show up and the house explodes! This is America with all the freedoms we are blessed to have, so that means some may do things to their properties that others don't appreciate. 

like I said I was just playing devils advocate .. I have owned STR's myself. I dont particulary care to own them anymore i sold them.. too much work for me.. we moved to Mid term fully furnished I like that WAAAAY better. Perosnally.

I'm sure the MTR forum would appreciate your insights since STR are awful.  

 LOL  too funny..  I think its somewhat irresponsible though to be touting this when folks take on such risks that we are seeing where they think they are going to make a bunch of money then they get their hands slapped.. which is my point about being correctly zoned and permitted .. do you think that is a bad thing ??   

I have yet to see regulations in any aspect lead to good or an improved state of living. Not that it's anyone's concern, but what we're dealing with is certain people trying to push investors, LTR, MTR, STR, out of an HOA. Can't say there's going to be much good for anyone if it passes, and property values drop because only homeowners can live there. Not many can come up with money to purchase a property right now. Thankfully investors are a large chunk of the neighborhood, so fingers crossed it doesn't pass.

 where is this coming to vote  what market ?? 

I know Maui has some things coming down I was just in Honolulu and it was all over the news. Of course its because of a massive tragedy 9000 people homeless and its not like Maui can absorb those folks into other housing.. Like what happened in the wildfires in CA and the NW .. we have to keep in mind whole cities burnt down as well in N. Ca And in Santa Rosa thousands of homes were burnt down.. but CA being CA and massive was able to absorb those folks.  

Anyway land use is the cornerstone of our country.. we having zoning for a reason.. some states have areas with no zoning and it becomes a hodge podge mess. 

[Sarah Kensinger]

Quote from @Jay Hinrichs:

Quote from @Sarah Kensinger:

Quote from @Jay Hinrichs:

Quote from @Sarah Kensinger:

Quote from @Jay Hinrichs:

Quote from @Sarah Kensinger:

Quote from @Jay Hinrichs:

Quote from @Sarah Kensinger:

I feel your pain, very much so! It's great when a property cash-flows as a LTR as well as a STR, but it's a hard pill to shallow when you know the cash-flow could double or triple as a STR. But instead, a few people with their agenda pass policies that stand in the way.

to play devils advocate here.. What agenda ?   folks that paid a lot of money for an owner occ house and a stable neighborhood might have an issue with the property being run as a hotel?
Seems to me those are pretty fair agendas to have..  also Seems to me STR should be in areas ZONED for it and permitted for it so homeowners if they want to buy there know going in that there will be transient use next to them. Seems to me its only an Agenda because your in the bizz and or you dont have to live next to it.. I would be Uber pissed off if one of my neighbors started to use their house as a STR.  so other side of the coin. 

I know in Charleston SC were i built quite few homes downtown its highly regulated as it should be and if your zoned and permitted then the price reflects it on the purchase side they are sold as income props.

Yes, but some of us deal with Karen and Karen so that changes everything. I'm surprised you're on this forum if that's how you feel about STR. Some of us are in vacation markets that only survive due to the visitors that frequent the area, and the STR that houses all the guests. If someone decides to live there, that is their choice. I would happily live next to the homes we and other similar operators host, much better than the guys that have the marshals show up and the house explodes! This is America with all the freedoms we are blessed to have, so that means some may do things to their properties that others don't appreciate. 

like I said I was just playing devils advocate .. I have owned STR's myself. I dont particulary care to own them anymore i sold them.. too much work for me.. we moved to Mid term fully furnished I like that WAAAAY better. Perosnally.

I'm sure the MTR forum would appreciate your insights since STR are awful.  

 LOL  too funny..  I think its somewhat irresponsible though to be touting this when folks take on such risks that we are seeing where they think they are going to make a bunch of money then they get their hands slapped.. which is my point about being correctly zoned and permitted .. do you think that is a bad thing ??   

I have yet to see regulations in any aspect lead to good or an improved state of living. Not that it's anyone's concern, but what we're dealing with is certain people trying to push investors, LTR, MTR, STR, out of an HOA. Can't say there's going to be much good for anyone if it passes, and property values drop because only homeowners can live there. Not many can come up with money to purchase a property right now. Thankfully investors are a large chunk of the neighborhood, so fingers crossed it doesn't pass.

 where is this coming to vote  what market ?? 

I know Maui has some things coming down I was just in Honolulu and it was all over the news. Of course its because of a massive tragedy 9000 people homeless and its not like Maui can absorb those folks into other housing.. Like what happened in the wildfires in CA and the NW .. we have to keep in mind whole cities burnt down as well in N. Ca And in Santa Rosa thousands of homes were burnt down.. but CA being CA and massive was able to absorb those folks.  

Anyway land use is the cornerstone of our country.. we having zoning for a reason.. some states have areas with no zoning and it becomes a hodge podge mess. 

South Florida....my opinion, there's some older folks that need to move to a gated resort community!

[Eric James]

Quote from @Jay Hinrichs:

Quote from @Sarah Kensinger:

Quote from @Jay Hinrichs:

Quote from @Sarah Kensinger:

Quote from @Jay Hinrichs:

Quote from @Sarah Kensinger:

I feel your pain, very much so! It's great when a property cash-flows as a LTR as well as a STR, but it's a hard pill to shallow when you know the cash-flow could double or triple as a STR. But instead, a few people with their agenda pass policies that stand in the way.

to play devils advocate here.. What agenda ?   folks that paid a lot of money for an owner occ house and a stable neighborhood might have an issue with the property being run as a hotel?
Seems to me those are pretty fair agendas to have..  also Seems to me STR should be in areas ZONED for it and permitted for it so homeowners if they want to buy there know going in that there will be transient use next to them. Seems to me its only an Agenda because your in the bizz and or you dont have to live next to it.. I would be Uber pissed off if one of my neighbors started to use their house as a STR.  so other side of the coin. 

I know in Charleston SC were i built quite few homes downtown its highly regulated as it should be and if your zoned and permitted then the price reflects it on the purchase side they are sold as income props.

Yes, but some of us deal with Karen and Karen so that changes everything. I'm surprised you're on this forum if that's how you feel about STR. Some of us are in vacation markets that only survive due to the visitors that frequent the area, and the STR that houses all the guests. If someone decides to live there, that is their choice. I would happily live next to the homes we and other similar operators host, much better than the guys that have the marshals show up and the house explodes! This is America with all the freedoms we are blessed to have, so that means some may do things to their properties that others don't appreciate. 

like I said I was just playing devils advocate .. I have owned STR's myself. I dont particulary care to own them anymore i sold them.. too much work for me.. we moved to Mid term fully furnished I like that WAAAAY better. Perosnally.

I'm sure the MTR forum would appreciate your insights since STR are awful.  

 LOL  too funny..  I think its somewhat irresponsible though to be touting this when folks take on such risks that we are seeing where they think they are going to make a bunch of money then they get their hands slapped.. which is my point about being correctly zoned and permitted .. do you think that is a bad thing ??   

I understand owner occupants not wanting STR nearby. A third side of the coin is when owners bought houses for STR that was allowed at the time. Now, after the fact the regulations are being changed.

[Kathleen Fitzpatrick]

@James Lauer what town? I am in Cape May, and we are allowed to do as we wish down here, although the season is a 7-day minimum.

You actually stand to do well and have less expenses and wear and tear from multiple turnovers, but those 30-day tenants don't grow on trees, so you are going to want to market hard.

Please tell me you aren't relying on AirBnB in NJ - Tenants pay 20-30% more here and you get none of that overage - booking direct saves them that service charge and taxes, so you could actually up your rent and collect more yourself and they'd save $$.

[Kelly Alliger]

We have a mid term rental in Honolulu and 30 day rentals are the minimum.  Our property manager aims for getting the work-from-homers, traveling nurses, etc vs going after the vacationers and it's doing well to the point of we don't get to use it as much as we would like! Good problem, I know. Maybe MTR will be a better target.   Don't break the STR rules, not worth it!

Quote from @John Underwood:

I agree with Nathan. 

Comply with the rules so you don't get in big trouble. Trying to not get caught is not the answer.

Convert to a MTR, LTR or sell.

[Brad S.]

In my observation, many people incorrectly think there str is exclusively a real estate investment, it isn't. It is a business, which may or may not include the real estate. This is nothing new and has been going on for many, many decades, with vacation rentals, hotels, bed & breakfasts, etc. Many people act as if this is some new phenomena, it isn't. What's relatively new is the tech that has exposed the str opportunity to every sfr and lowered the bar to entry. Therefore, it is the use of some of the RE that is changing, and some local regulations are feeling a need to catch up with these changes. 

So, when you are underwriting an str purchase, much of the business should be evaluated separate from the real estate. Unfortunately some local regulations may change altering the business potential or plan. In many areas, I think some of those considerations and regulations are warranted, since those areas are zoned exclusively residential, are filled only with sfr's, and an str is a commercial endeavor. Now, in areas where a majority of the sfr's are vacation/str's the considerations are different.

These comments are in response to some of the other posts. As to the OP, unfortunately the options seem limited. Fortunately, the OP is smart or lucky that their property still works as an mtr or ltr. I would keep tabs on the local council meetings and proposals and get in touch with the city leaders expressing your concerns. Find local REI associations or other groups to ban together to help fight the regulations.

As a non-attorney, I'm not sure why it would be illegal for the city to change their regulations regarding str's. It doesn't preclude you from using the property as it was initially intended in the zone it was when you purchased it - as an owner-occupied sfr. It is just limiting the commercial use of the property. In some areas they limit the # of any type of rentals, and that was long before arbnb. Those may be located in HOAs though. Now, if your area has many str's and that is relatively common, than you may have a reasonable argument.

I had somewhat of the opposite issue, where I turned my ltr into a legally permitted str, but unfortunately, there were a ton more unpermitted str's in the area which appeared to dilute the str business. I ended up turning back into an ltr, since it wasn't successful as an str at that time. 

Anyway, good luck and fair warning to anyone considering an str - plug this potential into your underwriting.