Airbnb investing in Boston?

Question

I'm considering becoming an Airbnb host in Boston, and it seems to be extremely profitable. However, the city has several regulations restricting short term rentals, and I want to make sure I fully understand the laws before I invest anything.

My understanding is that you can't rent a property (that is not your primary residence) short term for more than 90 days/year, UNLESS:

- You get a lodging house license: https://www.cityofboston.gov/images_documents/Lodg...

- The property is inspected

- The property is registered as a short term rental

- Boston/MA short term rental and excise taxes are paid

My main questions are:

- Am I eligible to get a lodging house license even if I am only renting at 1 bed apartment to 1 person at a time? Or do I need 4+ units to be eligible?

- Is it easy to get the lodging house license? Is there any chance of being denied even if all the paperwork is filed correctly?

- Am I missing anything?

Also if any of you have experience with Airbnb and would like to connect, I'd love to meet for a coffee sometime!

Charlie MacPherson · Answer

@Austin Sheppard There were new proposed regulations filed yesterday by Mayor Walsh.  Among them was that for non-owner occupied short term rentals, the property owner gets it re-zoned as commercial.

Check the local papers and TV stations for more details.

Cassandra Staffieri · Answer

@Austin Sheppard

I rent 18 units in Boston from landlords and am working on lodging licenses for some of the buildings. It’s extremely difficult to even find out how to get a lodging license, what the process is and who to contact. We’ve contacted multiple people in Boston and they redirect us to another person who then directs us to another person which then does not have a direct answer for us in what the process is.

What I do know is that if it is approved for a lodging license, it will be legal in Boston, and the building needs to be zoned for lodging. Some buildings are not zoned depending on where they are located. They also have to be inspected which I can’t even find out what the requirements are because no one even knows or can give me a direct answer. I’ve been trying for the past month to get answers to this and no one seems to know.

I’ll keep you updated if I find anything out!

Robert Adams · Answer

Here is a link to another BP conversation regarding the proposed changes in Boston for Short term rentals: https://www.biggerpockets.com/forums/530/topics/566948-new-air-b-and-b-str-regulations-proposed-in-boston?page=1#p3428966

James Clifford · Answer

@Austin Sheppard @Charlie MacPherson is right, there are new regulations in Boston on the horizon and Airbnb and the City are at odds with one another. In my opinion, Boston is a high-risk market right now for Airbnb/STR due to these looming regulations.Aside from that, Boston is a great market for STR's and has some of the highest occupancy rates and revenue of any market in the USA. I have run commercial Airbnb's in several US cities for the past 3 years, I'd love to get coffee with you but I am in SoCal. Send me a message if you'd like to talk further. I am more than happy to share my knowledge and learn from you as well.

Jennifer Chevez · Answer

@Cassandra Staffieri I wanted to inquire about your post mentioned above. What was the outcome with the lodging license process?

Your feedback is greatly appreciated!

Jennifer Chevez · Answer

@Austin Sheppard Did you ever find a way to make this work for you? I recently started researching the Boston market, and was on the phone with ISD yesterday. I was told the same thing you mentioned on this post. That basically I will not get approved unless I am the owner of the property. Even if the landlord has agreed to a sublease.

Apartments are out of the question as I was told, that only single or multi-family dwellings would be approved with the city to be in compliance.

Dan K. · Answer

@Austin Sheppard

Although new regulations will raise the barrier for entry, it will not grandfather anyone in -- therefore, your business plan could be totally shot.

Cambridge passed regulations last year and they have now been implemented. My opinion is that Cambridge is more stable because regulations are in place and certificates are being granted.

Info on the Cambridge regulations: https://www.cambridgema.gov/iwantto/registerashorttermrental

Matthew Rizzo · Answer

Austin,

I have the same interest, but unfortunately, it looks like we may be at a loss; new regulations are being imposed.  The vote was just passed on June 13th and the regulations will take effect on January 1, 2019.

You will still be able to rent our your home on Airbnb but it needs to be your primary residence, the number of days you cant rent it out are limited, and you need to register with the city and pay hundreds in fines per year.

More information here:  https://boston.curbed.com/2018/6/13/17460760/bosto...

Best,

Matt

Austin Sheppard · Answer

Thanks so much for responding everyone.

I see regulations as a potential opportunity because on one hand, they obviously are bad for business, but on the other, they raise the barrier to entry which can reduce competition and increase profits if you're one of the few people who figures out a system to get around them.

Having said that, It seems clear that now is not a good time to start an Airbnb business in Boston since there's a lot of uncertainty around they mayors proposal.

I guess I'll just keep an eye on the news, and see if I can come up with a strategy that works once the dust settles.

Airbnb investing in Boston?

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