The Internet age has changed the way we live in many ways. Information is flying around us all the time, and we have access to more knowledge than at any time in human history. Some of these changes are good, some bad, but it is certain that the way we live has been affected.
One example is how we travel. There was a time when travelers had to make many calls or hire a travel agency to find a place to stay, transportation, and take other steps to prepare for a trip. Today, at the click of a button, we can book a room, rent a car, make reservations for out favorite restaurant, and so much more. AirBnb, HomeAway, VRBO, and other vacation rental websites came along with a simple premise: instead of paying for a hotel, you could use the home of a resident in the place you were traveling. In the past ten years, this has become a revolution, with vacation rental sites claiming up to 10% of the hotel industries’ $1.1 trillion dollar market. Naturally, the hotel industry isn’t pleased with this development. Property owners and neighbors have had their issues, too.
The Misuse of Vacation Rentals
Most vacation rentals are structured to be available anywhere from a day to a week. A risk of renting for a short time to an individual is that they will misuse the property. It has happened that wild parties, porn shoots, and commercial use of holiday rentals have caused damage to both properties and the reputation of their owners. A flood of guests and ever changing tenants has caused traffic headaches too, with renters taking up all available parking nearby. Despite ways to combat this problem by refusing to rent to suspected abusers and flagging those who have misused a property, these stories continue, as it is easy to create new fake profiles and avoid blacklisting.
The HOA and the Neighbors Respond
Abuses like these have had a negative effect on property values. In some cases, owners have evicted long-standing tenants in order to use their property as a short-term rental. Neighbors have been vocal in complaining about these abuses, and Homeowners Associations have been creating clauses in their agreements and amending existing agreements to limit or restrict the use of their homes as vacation rentals. These clauses are enforceable because even a short-term rental qualifies as a “lease” legally, and some owners have been warned and even fined for violations.
Government Regulations Increase
Another abuse comes from owners who buy multiple units in a building or neighborhood, and rent them all out as vacation rentals. This makes living conditions for the permanent residents worse as the chance of abuses occurring multiply. New York City and other cities across the US have responded by passing “Primary Residence Laws” stating that properties rented for less than thirty days must be the owners’ primary residence, and have authorized fines up to $75,000 for violations. Other laws have increased taxes on short-term rentals and forced owners to hire a caretaker that neighbors can contact in case issues come up. Some of these regulations were championed by the hotel industry, which have launched a massive campaign to combat holiday rentals nationwide. In some areas, owners are now being required to charge an 11.5% hotel tax to be passed on to the city government, and they have even gotten congress to start investigations about the effect of holiday rentals on property values.
How to Protect Yourself and Your Rental Property
If you want to rent your property as a short-term holiday property, your only option is to be sure you are in compliance by keeping hyper aware of these constantly changing HOA, municipal, state, and federal regulations. There’s a simple workaround that is trending now, and that’s converting your rental to a corporate rental via CHBO. Rentals of thirty days or more are not subject to these new laws. Plus, with commercial clients seeking long-term housing for relocating staff or temporary assignments, you vastly decrease the chance your property will be misused, as the company assumes the financial and reputational liability for damages. CHBO is easy to use and can help you comply with local laws and find trustworthy tenants. Get started by learning how to furnish and price your rental property for corporate clients today!