What is Your Process for Determining STR Legality?

Question

For those of you doing STR's via VRBO, Air Bnb etc, when you're evaluating potential new properties how are you quickly determining whether the property is STR eligible?  Do you have to check the zoning with the county and a case-by-case basis?  Any websites that help with this process?

Ethan Cooke · Answer

@Bob Mueller Jr. - I agree with @Jon Crosby and Account Closed. Local real estate experts know the market.

To research a market, I always use:

- Google - for example “San Francisco short term rental regulations”. Easy, extensive info.

- AirDNA.com - this website gives a letter grade to each city for how good it is to manage AirBNB’s there. This grade includes market demand, regulatory ease and other factors

Also whether you are buying a unit in a multi-unit building to use as a furnished rental or doing rental arbitrage with someone else’s unit, it’s critical to get flexible terms with your HOA or landlord. For example:

- subleasing OK

- short-term rentals OK

- small dogs OK

City/county regulations are the first step, but the lease terms often determine whether you make or lose money.

Wendy Schultz · Answer

I have to agree with @Lucas Carl. Your best bet is to find properties in areas that are considered tourist towns. They know how to handle short term rentals because it's common and they have already created the rules on permitting, taxes to be paid, etc. It's the places that are considered residential that have been far trickier. Some municipalities don't know how to deal with them so they have been getting much more attention and regulations put in place. In Wisconsin, they passed a law that a homeowner cannot be restricted from renting their home as long as it's more than 7 days. Some municipalities allow less than 7 days but they must at least allow 7 days. There are municipalities that collect room tax revenue and others are clueless and don't. Orlando passed restrictions on short term rentals to homes where the owner will be on site during the guest's stay unless the area was already zoned for STR. Contact the municipality and speak to someone who's knowledgeable about it. They should know what's already passed and what's in the works to be passed.

Account Closed · Answer

If you are in a city, the first search is Google. Searching anything about VRBO, STR, ETC --- and that city name.  The reality is most cities of size are taking this issue on.

If the city has traditionally been a resort town -- the rules are likely already set.

If the place is rural -- you'll have to find county rules.

Travis Rasmussen · Answer

@Bob Mueller Jr.

Call the city, it's the best way to get some of the most direct info.

Paul Sandhu · Answer

STRs in a location with a large industry is another strategy.  You aren't going to rent to people taking a vacation.  You'll rent to contractors working short term jobs in the industry.  My town of 9500 has a petrochemical refinery.  I rent to the contractors you see working on those large erections of steel at a refinery.  I charge what local motels charge per week, but provide a house with a kitchen, washer/dryer, Smart TV, etc.

The large industry could also be a university, hospital, shipyard, military base, etc.

Wendy Schultz · Answer

I would also have to say that not all real estate agents are privy to short term rentals so do your own research. I have taught my realtor a ton about short term rentals in the Disney area in FL.  Also, check the HOA regulations. If their minimum lease is not 1-7 days, it's probably not a good place to go.

Wendy Schultz · Answer

I have to agree with @Lucas Carl. Your best bet is to find properties in areas that are considered tourist towns. They know how to handle short term rentals because it's common and they have already created the rules on permitting, taxes to be paid, etc. It's the places that are considered residential that have been far trickier. Some municipalities don't know how to deal with them so they have been getting much more attention and regulations put in place. In Wisconsin, they passed a law that a homeowner cannot be restricted from renting their home as long as it's more than 7 days. Some municipalities allow less than 7 days but they must at least allow 7 days. There are municipalities that collect room tax revenue and others are clueless and don't. Orlando passed restrictions on short term rentals to homes where the owner will be on site during the guest's stay unless the area was already zoned for STR. Contact the municipality and speak to someone who's knowledgeable about it. They should know what's already passed and what's in the works to be passed.

John D. · Answer

If the City is incorporated, call the city and ask.  If the City is not incorporated, call the governing County.  If you are in an HOA, call them as well.

Jon Crosby · Answer

Hi @Bob Mueller Jr., I personally like to start with local agents and property managers for high level info.  That usually tells me if it's a city or county regulation to which I then go look at their respective websites for full details.  Then, you have to make sure of any HOA restrictions on any specific properties which will supersede any of the state, county or city regulations.

For properties I already own, I use Google Alerts to keep track of any changes or potential issues by using keywords like 'South Lake Tahoe Permit' and I then get notified of any web traffic that hits on those keywords.  That has helped a LOT in keeping ahead of things from a permitting perspective.

Hope that helps!

Cheers!

What is Your Process for Determining STR Legality?

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