If it's a "Vacation Home" can I AirBnb??

[Luke Carl]

I just assumed this was totally kosher but now I'm reading things that are making me worried. I have a 10% down vacation home conventional mortgage with PMI that I ended up putting on Airbnb and switching to commercial insurance. We do still go and stay there about once per month. Am I breaking rules??

[John Underwood]

As long as you pay your mortgage on time I doubt your mortgage company you will care. I have a similar loan. I made the property a vacation rental years later. I use Homeaway.com and AirBnB. Homeaway is responsible for over 90% of my bookings.

[Colleen F.]

Did you call it a second home when you bought it and how long have you owned it? My understanding when we bought a second home and rented it is that there can be problems if you do it right away and have little or no personal use and the bank is notified. Several years down the road of course they know things can change. The people who told me they had problems misrepresented their intentions and rented right away and a lot.  Insurance change I think triggered questions. Not sure what happened in the end I only know the bank had sent a letter on it.

[Michael Greenberg]

I would check with you local county in reference to this and also your potential tax burdens. I converted one of my properties from a 2nd home to a VR with no issues, rolling it over to a LLC and insuring it as such. As @John Underwood mentioned above, making my payments - no issues.

[Luke Carl]

Michael Greenberg so we are in a tourist area. Millions of visitors. Extremely rental friendly.

I'll just let you guys know I went so far as to ask the lender because I am really not looking for trouble and I have no problem converting to an investment loan.
They told me I'm 100% fine to rent it out as long as I remain in control and don't put it with a management company. And they sent this text in an email so I have evidence.
Works for me!

[Mark S.]

Agreed.  We did something similar.  Bought as a vacation home and then started renting it out a few months later.  I agree with the previous comment that said as long as you're paying the mortgage and keeping up adequate insurance, I think the bank has other things to worry about.

[Jeff Lezark]

Lenders and mortgage loan servicing companies love to let sleeping dogs lie. If the loan is performing as agreed they have no reason to look for trouble. Where a borrower can get in trouble is when the intention from day 1 is to do something with the property (rent it) that the bank isn't aware of. The difference in rate and terms for an owner occupied property versus one used for rental purposes is significant so saying one thing and doing another could be cause for the entire loan balance being called due. 

[Luke Carl]

Jeff Lezark but if I pay my note on time with Autopay they're not going to bother me?
This lender told us today we can do whatever we want with it including Airbnb as long as we're in control.

[Luke Carl]

Jeff Lezark maybe I'm reading it wrong but your post seems to contradict itself. I'm really trying to play by the rules here but our lender is telling us this is what we should do.

[Jeff Lezark]

Doing whatever you want with it is entirely legal and up to you. When you say "...we're in control" is where you're losing me. If the lender has no issue with the property being used for rental purposes, why would they have a problem if you use a management company to get it rented and managed? You will still be 'in control' as you will be the one making payments to the lender. Maybe others on the forum can shed some light on this but it sounds like you may not have been given accurate information from the lender.

[Jeff Lezark]

To clarify my OP, any lender can randomly select a property and do an audit. If it happens that yours is the lucky one selected and you told the lender this is your primary residence you must be able to show evidence that your claim is or was true. 

I don't mean to frighten you and hope I didn't. You did the right thing by seeking advice from your lender and you are at no risk of them coming after you if you put the property up on AirBnb. The criteria for a lender to consider the property 'owner-occupied' is if the buyer actually moves into the home. The prescribed amount of time to stay is 30 days but this varies from State to State. After the owner occupancy issue is satisfied the owner can do with the place whatever the zoning laws will allow.

[Luke Carl]

Jeff Lezark I think it's because the second home rider has a bunch of legal talk about time shares etc. basically I'm trying to protect my *** and no one has a straight answer. I guess I'll just listen to the lender and do what we're doing and stop asking questions

[Jeff Lezark]

Asking questions is how one learns so don't stop asking. I agree that you should simply comply with the lender as long as you fully understand what they are saying. I can speculate on what they mean by you being in control of the property but that does you no good. If it were me I'd call and clarify what they mean by this. Outside of that you're in great shape and I wish you continued success.

[Luke Carl]

Jeff Lezark great advice Jeff! Let me clarify This isn't a primary residence. It's a "second home" much more then the designated 65 miles from my primary. More like 4 hours. I most certainly do live in my primary which I actually just refinanced yesterday to get rid of the FHA.