Short Term Rentals (like Airbnb) have been BANNED!

Short Term Rentals (like Airbnb) have been BANNED!

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

Recently two of the higher end suburbs (Broadview Heights & Seven Hills) in the Cleveland market banned short term rentals. 

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I never got involved in the Airbnb craze myself. Not my business model. I've got a ton of plates spinning running all of my other businesses so I never saw the need to get into it. Money seemed low for the high level of labor and risk involved.

  • What do those of you who are in the Airbnb business feel about these cities outlawing the use of it?
  • Are you in agreement with these rulings or against them? Why?

I've spent a pretty decent chunk of money on my house. I also live in one of the higher end suburbs in the Cleveland area. I would be the 1st one in city hall trying to get it outlawed in my city if my neighbors where using their homes as hotels &or Airbnb's.

  • Would you be ok with your neighbor running their house as a short term rental?  Why? Why not?
  • Do you think the quality of your neighborhood should come into play with whether or not Airbnb's are permitted?  Why Why not?
  • Do higher end neighborhoods require different regulations than lower end "rental" neighborhoods? Why? Why not?
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Specialist · Newberg, OR · Member since 2018 · 35 posts · 174 votes
8y

My $0.02 is that short-term rentals are ultimately about property rights.  

As the owner of a property, I believe that I should have the right to use it in the way I see fit so long as it does not bring harm to the surrounding community.

Naturally, opponents of STR's argue that AirBnB harms communities, but I think that is a thin argument because it's based on peoples feelings & perceptions vs. provable facts.

Banning STR's is a use of police power to restrict rights without compensation that should make people concerned. It may be your rights that the city or state comes after next.

See this reply in the discussion

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  • Rental Property Investor · Augusta, GA · Member since 2017 · 825 posts · 278 votes
    8y

    A friend has a lovely small home in Minneapolis. It is his personal residence, and he has several repeat Air BnB clients during the summer. He is a high school teacher, so this works especially well for him to supplement his income during his time off. I'd hate for him to lose that right.

    Where are AirBnB's really going to work? Areas like his which are close to all the city attractions. Burbs are not generally attractive for this sort of thing, unless it is something like a corporate rental where they are going to also have a rental car. I think that market forces are going to keep most AirBnB out of your NIMBY neighborhoods without much effort, unless you also are living in a trendy downtown area.

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    8y
    Originally posted by @DJ Dawson:
    Originally posted by @Doug Utberg:

    My $0.02 is that short-term rentals are ultimately about property rights.  

    As the owner of a property, I believe that I should have the right to use it in the way I see fit so long as it does not bring harm to the surrounding community.

    Naturally, opponents of STR's argue that AirBnB harms communities, but I think that is a thin argument because it's based on peoples feelings & perceptions vs. provable facts.

    Banning STR's is a use of police power to restrict rights without compensation that should make people concerned. It may be your rights that the city or state comes after next.

    Love this response, take the emotions out of it and get to the facts, owners rights (that dont infringe on others) should be untouched

     I agree in principle to not infringing on owners rights if what they are doing doesn't effect others. However I feel that running a hotel in a residential neighborhood does have an effect on the neighbors.

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    8y
    Originally posted by @Paul Sandhu:

    Don't forget that the hotel/motel lobby can have a big influence on the ordinances of a municipality.

     I purchased a motel last year. For the record I shut it down as I am developing it into an apartment building so I have no dog in the Airbnb hurts the hotel industry fight....However it's important to note that there are a ton of additional taxes that a hotel or motel pays to the local municipality that an Airbnb operator doesn't.

  • Anthony GaydenPro Member
    Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
    8y

    It doesn't surprise me that certain places have attempted to ban the activity.

    I have no real opinion on the topic. I have never used one, though I do see their benefit, especially for people staying in a location more than a few days, but shorter than the average apartment lease.

  • Anthony GaydenPro Member
    Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
    8y
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:

    Don't forget that the hotel/motel lobby can have a big influence on the ordinances of a municipality.

     I purchased a motel last year. For the record I shut it down as I am developing it into an apartment building so I have no dog in the Airbnb hurts the hotel industry fight....However it's important to note that there are a ton of additional taxes that a hotel or motel pays to the local municipality that an Airbnb operator doesn't.

     That is a good point. The logic behind those taxes was that they would tax visitors to the city rather than residents.

    Do you believe there would be more support behind STRs if they were similarly taxed and licensed?

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    8y
    Originally posted by @Anthony Gayden:
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:

    Don't forget that the hotel/motel lobby can have a big influence on the ordinances of a municipality.

     I purchased a motel last year. For the record I shut it down as I am developing it into an apartment building so I have no dog in the Airbnb hurts the hotel industry fight....However it's important to note that there are a ton of additional taxes that a hotel or motel pays to the local municipality that an Airbnb operator doesn't.

     That is a good point. The logic behind those taxes was that they would tax visitors to the city rather than residents.

    Do you believe there would be more support behind STRs if they were similarly taxed and licensed?

    No I don't think taxation would garner more support. For me, it's a zoning issue. If you buy a house that is next door to a motel or a bar or some other business you know what you are getting yourself involved in. Any of the negative side effects you'd incur as a neighbor of a business should be expected. The free market accounts for this. This is why homes neighboring commercial businesses typically sell for less than a similar home on a quiet street. If we allow folks to just slap hotel type businesses up any and everywhere they please that can have negative effects on the surrounding properties. This issue is why zoning was created in the 1st place.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @Doug Utberg:

    My $0.02 is that short-term rentals are ultimately about property rights.  

    As the owner of a property, I believe that I should have the right to use it in the way I see fit so long as it does not bring harm to the surrounding community.

    Naturally, opponents of STR's argue that AirBnB harms communities, but I think that is a thin argument because it's based on peoples feelings & perceptions vs. provable facts.

    Banning STR's is a use of police power to restrict rights without compensation that should make people concerned. It may be your rights that the city or state comes after next.

    ya Oregon went heavy on that phase with measure 37 and 47... both cost many people fortunes betting on properties that never could be developed.. if you want to live in areas with no zoing laws  Texas has wide swaths of land that is the case.. Oregon is about as strict state wide as any where in the country. 

    just because you own it gives only one right that is to pay tax's..  zoning dictates what you can do with it..

    I think short term rentals need to be special permitted.. like they do in Lincoln city.. or in Charleston SC.. that way the real estate has a commercial value associated to the stepped up use and the areas are not over run with short term stuff.

    Napa VAlley another one that has really come down hard.. but there are properties permitted there .. they are worth a fortune.

    one of my clients bought a permitted duplex in Charleston.. and the value was at least 50% above market because of the permit.. about 900k for a duplex that you could buy in Cleveland for under a 100k..

    But this thing even at those values gin's about 5 to 8k a month NET for that owner operator.. NO rental will do that.

    Back to Oregon's draconian land use rules.. this is what also kept this state from total free fall when 08 hit.. it was bad enough.. but with those rules developers and builders are hemmed in with small projects  100 lots or so is a very large project in this area.. where as in other states it would be something so small as to not be on the radar.

  • Rental Property Investor · Hartford, CT · Member since 2017 · 168 posts · 163 votes
    8y
    I certainly would not want my neighbors to dictate who can and cannot come into my house. Just as I wouldn’t dictate who can go to theirs. I rent out Airbnb in my house, and it’s is like have a rotating roommate. I’ve met some of the coolest most interesting people this way. For all the chatter about bringing down the neighborhood, I challenge you to explain why and how having a STR would bring down your neighborhood. What if a family moved in that looked different or had a different religion or cultural belief, would you want to city to ban that too so as to not bring down the neighborhood? Banning just doesn’t make sense.
  • Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    8y

    Regarding "I think short term rentals need to be special permitted..."  @Jay Hinrichs you beat me to it. 

    I have been through SUP hearings in 3 counties in NC. They are necessary for keeping some level of consistency in overall land use. In my hearings, like all SUP hearings, I needed to defend my case (literally) and show/prove that my use wouldn't damage/impact the surrounding property, etc. None of my cases were in Wake county (Raleigh) but I do know they instituted a series of UDO (Unified development ordinance) changes (click to see ) to address this STR topic.

    Zoning for residential... if you allow Air B-N-B then are other STR setups ok? Rooming house ok? A 'supportive housing' setup ok? This is the slippery slope James was talking about. And in cities like Raleigh, you have R-1, R-2, R-4, R-6, R-10, RX, ... whereas in other counties they may have just one or two Residential Zoning classes. So tagging a SUP to certain zoning areas... makes perfect sense to me.

  • Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    8y
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:

    Don't forget that the hotel/motel lobby can have a big influence on the ordinances of a municipality.

     I purchased a motel last year. For the record I shut it down as I am developing it into an apartment building so I have no dog in the Airbnb hurts the hotel industry fight....However it's important to note that there are a ton of additional taxes that a hotel or motel pays to the local municipality that an Airbnb operator doesn't.

    Any STR is going to pay more to the local utility and cable company than a comparable unit of a hotel or motel. A 2 bed motel room is going to use far less electricity, natural gas, water (no dishes or laundry) and sewer. A motel is also going to get a discounted rate on cable and internet. A motel has a big dumpster for trash.

    For example, trash service in my town is $13.00 for a blue polycart dumpster each month.  If I had 30 2 bedroom houses, that would $390 a month for trash service.  30 2 bedroom houses is the equivalent of a small motel with 30 rooms.  Monthly trash service for one big dumpster is less than $200.

    Sewer.  If I never use one drop of water in an entire month I still have to pay $18 for sewer service.  That's $540 a month plus the actual water usage.  That's more than what a motel would pay.

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    8y
    Originally posted by @Paul Sandhu:
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:

    Don't forget that the hotel/motel lobby can have a big influence on the ordinances of a municipality.

     I purchased a motel last year. For the record I shut it down as I am developing it into an apartment building so I have no dog in the Airbnb hurts the hotel industry fight....However it's important to note that there are a ton of additional taxes that a hotel or motel pays to the local municipality that an Airbnb operator doesn't.

    Any STR is going to pay more to the local utility and cable company than a comparable unit of a hotel or motel. A 2 bed motel room is going to use far less electricity, natural gas, water (no dishes or laundry) and sewer. A motel is also going to get a discounted rate on cable and internet. A motel has a big dumpster for trash.

    For example, trash service in my town is $13.00 for a blue polycart dumpster each month.  If I had 30 2 bedroom houses, that would $390 a month for trash service.  30 2 bedroom houses is the equivalent of a small motel with 30 rooms.  Monthly trash service for one big dumpster is less than $200.

    Sewer.  If I never use one drop of water in an entire month I still have to pay $18 for sewer service.  That's $540 a month plus the actual water usage.  That's more than what a motel would pay.

    $18 per month for minimum water service? Ok. That's still there whether or not the house is being used via Airbnb. I see no relevance to the discussion? 

  • Investor · Orlando, FL · Member since 2015 · 301 posts · 99 votes
    8y

    Bed and Breakfast have been around forever.  Now that someone has put Air in the equation there is an issue.  Explain...........

  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    8y

    We have 2 units of STR in San Diego (Mission Beach) but I still would not want an STR in my neighborhood. Am I a hypocrite? Possibly. I will say our 2 STRs have mostly been operated as STR since the last century and are in an area where most of the units are STR. Long term residents probably make up less than 10% of the unit count. Maybe 2 to 3% of the long-term pre-date our units being STR units.

    There has been an attempt to regulate STR in San Diego. So far the STRs have been mostly unregulated here.

    Because I would not desire non-owner occupied STR in my neighborhood (I think renting rooms out in your house STR is different than renting the entire house STR), I understand the desire to regulate the STRs. My hope is that any such regulation is done smartly and fair. I would think that an STR that has been an STR for ~20 years should be exempt from any regulation that would require converting it to LTR. Similarly in area where the virtually the entire area is STR should probably be excluded from any STR regulations.

    This is definitely a topic I see both sides.  For those that think it is a property rights issue my view is that they are discounting the rights of people who purchased in a residential area to expect it to be a traditional residential area.  To me it is a zoning item.  When a property is purchased with a zoning the purchaser has an expectation.  if the zoning is not what you desire, purchase in an area with zoning that you do desire.  Do not try to indicate I own the property so I can do with it what I want.  The property was purchased with limits imposed by the zoning; you have what you purchased.

  • Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    8y
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:

    Don't forget that the hotel/motel lobby can have a big influence on the ordinances of a municipality.

     I purchased a motel last year. For the record I shut it down as I am developing it into an apartment building so I have no dog in the Airbnb hurts the hotel industry fight....However it's important to note that there are a ton of additional taxes that a hotel or motel pays to the local municipality that an Airbnb operator doesn't.

    Any STR is going to pay more to the local utility and cable company than a comparable unit of a hotel or motel. A 2 bed motel room is going to use far less electricity, natural gas, water (no dishes or laundry) and sewer. A motel is also going to get a discounted rate on cable and internet. A motel has a big dumpster for trash.

    For example, trash service in my town is $13.00 for a blue polycart dumpster each month.  If I had 30 2 bedroom houses, that would $390 a month for trash service.  30 2 bedroom houses is the equivalent of a small motel with 30 rooms.  Monthly trash service for one big dumpster is less than $200.

    Sewer.  If I never use one drop of water in an entire month I still have to pay $18 for sewer service.  That's $540 a month plus the actual water usage.  That's more than what a motel would pay.

    You say there are a ton of taxes that a motel pays that an STR does not. That's true. But an STR pays a lot more in utilities that a motel does not. That's how it fits in the conversation.

  • Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes
    8y

    California instituted a program many years ago to compare state income tax returns with city-county business license information to catch those entrepreneurs flying under the radar (Google "City/County Business Tax (CCBT)").

    It seems to me that STRs are a business and anyone not reporting the income is taking a serious risk. If STRs become an issue with a neighborhood, then the zoning laws should be changed to deny these kinds of business licenses.

  • Flagstaff, AZ · Member since 2014 · 2 posts · 21 votes
    8y

    Why do we need the government involved in any of this to begin with? This comes down to property rights. An owner has a right to use his or her property in any way they choose as long is it does not harm the neighbors. If neighbors are harmed then they should prove the harm and seek compensation from the one who caused it. Take individual property owners to court on individual complaints, don't punish a whole market of potential landlords. 

  • Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    8y
    Originally posted by @Patrick Jackson:

    Bed and Breakfast have been around forever.  Now that someone has put Air in the equation there is an issue.  Explain...........

    In NC at least, and probably a lot of other states, Air B-N-B is not a 'bed and breakfast'. Yes, 'bed and breakfast' (defined ) have been around forever and in NC they follow the , including permits, etc., unlike the air bnb equivalent. 

  • San Diego, CA · Member since 2013 · 9 posts · 3 votes
    8y

    I bought my first STR in Phoenix AZ. The city has passed a law that STR's are allowed to operate, and I gladly pay the 13% hotel tax (I mean my guests pay). HOA's can pass their own rules to disallow STR's though.

    For me, once the renovation was complete and the house was furnished it has been a totally hands-off experience.  Since we live in San Diego, we hired a booking manager/ property management group that handles everything for a 10% fee that includes any costs for being listed on Airbnb and HomeAway.

    My wife and I are looking for our next city to buy another STR property. We plan to spend our early retirement years bouncing around to our properties on the offseason, letting the tourists pay our mortgages during peak season.

    Our properties are and will be in the busier part of town, where visitors can enjoy a wide range of restaurants, bars, and activities.  I see folks list their places further out of town in what could be quieter neighborhoods.  That doesn't fit my model and I suspect that they have greater vacancies. 

    I couldn't imagine wanting to stay in a hotel after seeing what STR's have to offer. I just need more out of my experience than a small room.

  • Investor · Culver City, CA · Member since 2017 · 76 posts · 40 votes
    8y

    During law school I worked with a zoning / building code enforcement agency. The zoning laws and building codes are sold to the people on the premise that they will protect us from having a toxic waste dump next to our elementary schools. The reality is that they are just tools for the government to go after unpopular people.  On my first day with the group I was told that every building in the district is in violation of either a zoning law or a building code. It was their job to find the violation when an owner or building was targeted.  

    At the time they targeted Asian massage parlors, cigarette sellers, night clubs that had customers deemed criminal (read: minorities), medical marijuana clinics and (post 2008) bank owned properties that had been foreclosed.  Now they target people who use their properties for short term rentals. 

    The zoning laws/building code enforcement is a scam.  The accused have none of the rights of a criminal. The code enforcement people can search the outside of properties without a warrant and because they are doing non-criminal investigations they can search inside with reasonable suspicion instead of the higher 'probable cause' standard. The owners can get huge fines that accumulate daily. 

    In many cases it was even worse because businesses complained about their competition.  So the guy that enforced the building code against medical marijuana clinics got tips from other medical marijuana clinics.  Massage parlors ratted out nearby parlors.  Businesses use the zoning laws to have the government harass competing businesses. It is a total scam.  

    So AirBnB rentals are the target these days in places where they are unpopular. People who want to control what their neighbors do have a great tool to harass neighbors into conforming with their wishes. Well established short term vacation landlords can also cripple newcomers in the market.  In the long run it won't work.   People will eventually find something else to be busybodies about (immigrants, gun owners, who knows who is next?).  In the meantime small business owners will just have to suffer. 

  • Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes
    8y
    Originally posted by @Jason Patrick:

    Why do we need the government involved in any of this to begin with? This comes down to property rights. An owner has a right to use his or her property in any way they choose as long is it does not harm the neighbors. If neighbors are harmed then they should prove the harm and seek compensation from the one who caused it. Take individual property owners to court on individual complaints, don't punish a whole market of potential landlords. 

    If I have a right to do whatever I want with my property, then my neighbors have every right to do what they want with their properties. I might have bought my property to enjoy a quiet residential experience. But if my neighbors decide to change their property use from residential to industrial, for example, then my quality of life suffers and the value of my property likely drops because few people want to live next to a factory (or downwind from a cattle farm). In theory, I can sue my neighbors for this loss of value. But in practice, I have other things I prefer to do with my time. Zoning laws take some of this risk out of the equation because while regulations can be changed, the wheels of government turn slowly.

  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    8y
    Originally posted by @Jason Patrick:

    Why do we need the government involved in any of this to begin with? This comes down to property rights. An owner has a right to use his or her property in any way they choose as long is it does not harm the neighbors. If neighbors are harmed then they should prove the harm and seek compensation from the one who caused it. Take individual property owners to court on individual complaints, don't punish a whole market of potential landlords. 

     >An owner has a right to use his or her property in any way they choose as long is it does not harm the neighbors.

    The statement is not accurate.  When a purchase is made it has many items conveyed in the purchase.  This can include things such as easements, mineral rights or the lack of mineral rights, and of course the zoning.  Zoning plays a large role in the value of the property.  Zoned residential has a traditional meaning that is being blurred with the advent of STRs.  It was never the intent of zoned residential to include STRs that function similar to hotels (I am referring to non-owner occupied STRs).  It is also unlikely that the zoning regulations/definitions would foresee the huge popularity of STRs to make it crystal clear that STRs are in functionality hotels.

    The neighbors who have purchased in a residential zone, purchased with the expectation that they were in a residential zone and not a zone that would allow hotels or STRs.  They have the right to expect the zoning to be as they purchased.

    It would be similar to purchasing residential but a landfill is placed next door ignoring the zoning (extreme case to make the point).

    We have 2 units of STR but they are both in an area that is probably greater than 90% STR. I realize it was not always this way but it is the way it is now. Even though we own 2 STR units, I would not want a hotel built by my house and using a house as a non-owner occupied STR is basically using a house as a hotel.

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    8y
    Originally posted by @Paul Sandhu:
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:

    Don't forget that the hotel/motel lobby can have a big influence on the ordinances of a municipality.

     I purchased a motel last year. For the record I shut it down as I am developing it into an apartment building so I have no dog in the Airbnb hurts the hotel industry fight....However it's important to note that there are a ton of additional taxes that a hotel or motel pays to the local municipality that an Airbnb operator doesn't.

    Any STR is going to pay more to the local utility and cable company than a comparable unit of a hotel or motel. A 2 bed motel room is going to use far less electricity, natural gas, water (no dishes or laundry) and sewer. A motel is also going to get a discounted rate on cable and internet. A motel has a big dumpster for trash.

    For example, trash service in my town is $13.00 for a blue polycart dumpster each month.  If I had 30 2 bedroom houses, that would $390 a month for trash service.  30 2 bedroom houses is the equivalent of a small motel with 30 rooms.  Monthly trash service for one big dumpster is less than $200.

    Sewer.  If I never use one drop of water in an entire month I still have to pay $18 for sewer service.  That's $540 a month plus the actual water usage.  That's more than what a motel would pay.

    You say there are a ton of taxes that a motel pays that an STR does not. That's true. But an STR pays a lot more in utilities that a motel does not. That's how it fits in the conversation.

     Ok but utilities aren't taxes. Furthermore the home itself being operated as a short term rental property doesn't really increase the amount of utilities that it would use if the owner of it was using it for it's intended use. So I don't really see a point to this aspect of the argument. You are paying $18 / mo min for water regardless of the home being listed on Airbnb or not.

  • Investor · Sewell, NJ · Member since 2016 · 68 posts · 48 votes
    8y
    I personally am a strong advocate of property rights. I know most will disagree but I think the permit process is disgusting. If a person owns a property they should be allowed to do whatever they want to! If I feel my neighbor does not keep his home up to my satisfaction, I should move not him. I realizeIn the minority. The government who governs least, governs best...Thomas Jefferson.
  • Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    8y
    Originally posted by @Jeff Small:

    I personally am a strong advocate of property rights. I know most will disagree but I think the permit process is disgusting. If a person owns a property they should be allowed to do whatever they want to! If I feel my neighbor does not keep his home up to my satisfaction, I should move not him. I realizeIn the minority. The government who governs least, governs best...Thomas Jefferson.

    This is more or less the argument that a NC utility used, initially, in a coal ash dump case. Our land, GTFO. Problems came about when neighbor's wells became toxic. The rest is history. 

    I owned a townhouse where the neighboring parcel owner emptied his septic truck into his back yard. Hey, you know, maybe I should move? Really? 

    I can't agree with your comments, since in our 'civilized society' there are some activities that are permissible and some that aren't. 

  • Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    8y
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:
    Originally posted by @James Wise:
    Originally posted by @Paul Sandhu:

    Don't forget that the hotel/motel lobby can have a big influence on the ordinances of a municipality.

     I purchased a motel last year. For the record I shut it down as I am developing it into an apartment building so I have no dog in the Airbnb hurts the hotel industry fight....However it's important to note that there are a ton of additional taxes that a hotel or motel pays to the local municipality that an Airbnb operator doesn't.

    Any STR is going to pay more to the local utility and cable company than a comparable unit of a hotel or motel. A 2 bed motel room is going to use far less electricity, natural gas, water (no dishes or laundry) and sewer. A motel is also going to get a discounted rate on cable and internet. A motel has a big dumpster for trash.

    For example, trash service in my town is $13.00 for a blue polycart dumpster each month.  If I had 30 2 bedroom houses, that would $390 a month for trash service.  30 2 bedroom houses is the equivalent of a small motel with 30 rooms.  Monthly trash service for one big dumpster is less than $200.

    Sewer.  If I never use one drop of water in an entire month I still have to pay $18 for sewer service.  That's $540 a month plus the actual water usage.  That's more than what a motel would pay.

    You say there are a ton of taxes that a motel pays that an STR does not. That's true. But an STR pays a lot more in utilities that a motel does not. That's how it fits in the conversation.

     Ok but utilities aren't taxes. Furthermore the home itself being operated as a short term rental property doesn't really increase the amount of utilities that it would use if the owner of it was using it for it's intended use. So I don't really see a point to this aspect of the argument. You are paying $18 / mo min for water regardless of the home being listed on Airbnb or not.

    Utilities aren't taxes. Utilities aren't repairs. Taxes aren't repairs. Repairs aren't taxes. Utilities, taxes and repairs are all expenses. Utilities and repairs on STR houses are going to be more than utilities and repairs on a motel. The higher taxes on a motel are offset by the lower utilities and repairs. The taxes on a STR are lower but they are offset by higher utilities and repairs. At the end of the month, I don't really care what the taxes, utilities and repairs are individually. I look at them as a whole, they are total expenses. Your motel with 15 rooms probably pays about $50 a month to have water service, even if not a single drop of water was used. 15 2-bedroom houses pay $270 a month for water, even if not a single drop of water was used.

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