AirBnb & STRs coming under regulation/restrictions

[Jeff B.]

Malibu, CA joining the frey on STRs:

A very typical response to STRs ( according to patch.com) is 

• The Council is concerned that people would buy property in Malibu for the sole purpose of renting it out on services such as AirBnB. The issue was brought up at the Council's meeting Monday.
• “I think this is sort of like a watershed event,” Councilwoman Joan House said. “It’s serious when somebody takes a home in a residential neighborhood and rents it out like a hotel.”

Other cities have already severely restricted this business model and impose heavy fines.  

IMO, there's a fine line between a vacation rental in a well know resort location (mountains, lakes, skiing areas) and a STR in a desirable metro area like NYC, SF, Seattle and now Malibu.

I dislike this model due to the high turnover and exposure to vacancies, but now there's every chance your REI can be wiped out by local regulations. THINK TWICE before you opt for a STR business  model.

[James Carlson]

@Jeff B.. Thanks for the update. I hear a lot of people wanting to buy a place as an STR. First step has to be to check all the local zoning and license regulations. Potential STR investors need to go further and give their council office a call to see if anything is in the works.

That said, probably the best thing to do would be to buy an investment property in a location where you are allowed to do STRs. But run your numbers beforehand based on it being a long-term rental. Then, you can rent it on Airbnb, make good money, and you still have a cushion when/if the city changes the law and you have to switch to a long-term model.