Airbnb in Chicago- Is it legal/ worth it?
Investor · Germantown, NY · Member since 2022 · 12 posts · 7 votes
Airbnb in Chicago- Is it legal/ worth it?
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
4y@Grayson Schiller - The ordinance which passed a few years ago said if you have a 2-4 unit property you can only do STR in the unit you live in. Now, that was never enforced and as long as you only had 1 per address you could still do it. This spring the city cracked down and delisted hundreds of listings and made them provide proof to get approved. If it is not the unit you live in you have to apply for a commissioners adjustment, which I am hearing is taking months and unless you can prove financial hardship it is getting denied
Second City Real Estate4.821 Reviews
31 Replies
- Rental Property Investor · Chicago, IL · Member since 2018 · 53 posts · 54 votes4y
Chicago is pretty restrictive. Here's another helpful thread on the topic here: https://www.biggerpockets.com/...
- Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes4y
Hey @Grayson Schiller - A lot has changed with the Chicago STR market over the last 5 years which is how long I had an Airbnb. My simple and straightforward advice is it's not worth any more at this point.
It used to be super easy to get your registration. Now you can not have an STR in any 2-4 units unless you are an owner-occupant. On top of that finding, an HOA that allowed STRs if you went the condo route is also nearly impossible.
We recently got denied by the city on a condo we bought where airbnb is ALLOWED but the building was in a planned development area. Happy to catch up and talk more about the process and my experience if that would help.
Quality Builders4.967 Reviews - Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes4y
@Grayson Schiller - The ordinance which passed a few years ago said if you have a 2-4 unit property you can only do STR in the unit you live in. Now, that was never enforced and as long as you only had 1 per address you could still do it. This spring the city cracked down and delisted hundreds of listings and made them provide proof to get approved. If it is not the unit you live in you have to apply for a commissioners adjustment, which I am hearing is taking months and unless you can prove financial hardship it is getting denied
Second City Real Estate4.821 Reviews- Member since 2025 · 6 posts · 1 vote1y
Quote from @Brie Schmidt:
@Grayson Schiller - The ordinance which passed a few years ago said if you have a 2-4 unit property you can only do STR in the unit you live in. Now, that was never enforced and as long as you only had 1 per address you could still do it. This spring the city cracked down and delisted hundreds of listings and made them provide proof to get approved. If it is not the unit you live in you have to apply for a commissioners adjustment, which I am hearing is taking months and unless you can prove financial hardship it is getting denied
Hi Brie, thank you so much for all your replies on here. They’ve really helped me. However, I have really specific questions I need help with.
Obviously, I applied for the registration and was denied.
Questions: 1. Should I go back and apply again and use another address and say I live at that address 120 days & if approved use it on that property? Delete my current listing on Airbnb…….
However, Before I get to asking all these questions is this a safe space? Im desperate and a bank account in the hole.
Mentor I need!
- Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes4y
Airbnb is very worth it. You can read my post of a unit I do in my 4 unit that is bringing in 50%+ net. I also just started managing a clients airbnb in Avondale that is looking to double the net rent based on airbnb comps. https://www.biggerpockets.com/...
It's legal but there are restrictions. You may need to say you owner occupy the unit (no one checks maybe you sleep there sometimes haha) to get it approved. Silly system.
- Chicago · Member since 2022 · 37 posts · 46 votes4y
I have experience with Airbnb and the returns used to be great, but I haven't had one since 2019. I have not used the platform for over three years. It can be a lot of work and I just didn't have time. Since then, Chicago BACP changed rules but there's still room to operate Airbnb but it has become much more difficult (at least legally).
I'd start by your researching the law here:https://www.chicago.gov/city/e...
I think you'll see a lot of STR investors move toward >30 day midterm rentals in the coming months and years as the strictly STR route is not feasible in many markets. Airbnb as a company is beginning to adapt to the changing reality in the housing market that the fastest growing trend in the rental market is the growth in the midterm rental arena. At a high level, 28% of Airbnb's income is now from midterm rentals (30 days or greater). This calendar year especially, they are beginning to market and encourage hosts to allow stays of 30 days or longer. They probably had data in the past from digital nomads renting these units for longer stays but the uptick in the past 2 years from the WFH and travelling healthcare professional perspective has likely changed their tune. This article describes the trend (nationally):https://www.cnbc.com/2022/02/1...
The problem for you is that these national trends don't matter in the city of Chicago. If you're signed up on Airbnb or VRBO, etc. you're considered pretty much a hotel in the eyes of the law and condo associations. To be fair, that can be accurate in many situations. So as Airbnb evolves, will the city of Chicago also recognize these changes? - - - not likely. It's not high on the list of things for city council to get done.
I'd definitely try Airbnb but if you want to have a more sustainable model, your other option is to look into corporate housing/midterm rental market. It sounds complicated but is pretty simple and probably easier to operate than a typical Airbnb, when you do the research, all things considered. If I was you, I'd look into Furnished Finder as a platform host and see if you can make it work that way as a backup should Airbnb not be possible for you. I am of the opinion that this is a better model, especially if you're a hands on person as the management is minimal. Just my opinion and experience operating both as an owner. If you have a nice place, you may be approached by a staffing agency directly who will provide you with a steady stream of tenants. This is more likely in the best neighborhoods with the best finishes. There are also facebook groups you could look into. You can connect with healthcare recruiters also. Many options, strategies, and approaches to consider, some more work than others but I wouldn't limit myself to strictly Airbnb if I was you. You just have to be good at finding the tenant pool.
Before you buy a property I'd also consider that you should be sure you also cash flow if you operated it as a normal 12 month rental. This mitigates the risk. I don't think it's likely that the midterm rental market disappears or Chicago lawmakers find a way to outlaw it but this helps to ensure you don't operate at a deficit.
- Investor · Germantown, NY · Member since 2022 · 12 posts · 7 votes4y
@Garfield M., how does one break into midterm rentals? I know of how to reach people for STRs or long term but I'm guessing there a different place to post for people looking for midterms.
- Chicago · Member since 2022 · 37 posts · 46 votes4y
Quote from @Grayson Schiller:
@Garfield M., how does one break into midterm rentals? I know of how to reach people for STRs or long term but I'm guessing there a different place to post for people looking for midterms.
There's a podcast called "The Landlord Diaries" which is strictly about investing in the midterm furnished market. Listening to the first episode with Jesse Vasquez will give you pretty much all of the info you'll need to get started if it's something you want to do.
- Rental Property Investor · Chicago, IL · Member since 2018 · 53 posts · 54 votes4y
@Garfield M., Airbnb is a good source for midterm stays too. We have four STR units in another market (Charlotte) and constantly receive requests for midterm stays. I think it would be similar here. You just need to be aware from a legal perspective, as it legally becomes a landlord-tenant relationship after 28 days, in Chicago, and the city is very tenant friendly.
- Chicago · Member since 2022 · 37 posts · 46 votes4y
Quote from @Mark Reitman:
@Garfield M., Airbnb is a good source for midterm stays too. We have four STR units in another market (Charlotte) and constantly receive requests for midterm stays. I think it would be similar here. You just need to be aware from a legal perspective, as it legally becomes a landlord-tenant relationship after 28 days, in Chicago, and the city is very tenant friendly.
Yes, midterms are becoming more and more popular, biggest emerging trend in the rental market is monthly furnished stays.
Airbnb pretty much owns the market but it's difficult to operate within the law in Chicago. You'll still need to be approved by BACP to make a posting. A platform like Furnished Finder does not need to conform to these laws. Profit will be a bit less than airbnb but it's significantly less work and turnover. Might be similar profit to airbnb in the winter in chicago but I don't know firsthand.
- Real Estate Agent · Chicago, IL · Member since 2020 · 48 posts · 43 votes3y
I recently moved to Chicago 4 months ago and have an Airbnb that I run under my primary unit - wanted to chime in on a strategy no one has mentioned yet
I agree that the ideal way to invest in AirBnB in Chicago is to buy a Multi-family, and rent out the unit you 'live' in. Since Chicago has about 50% occupancy anyways on average, you will have no problem finding opportunities to live in and use your airbnb to satisfy primary requirements. The other units in the MFH should be your unit to live in while your 'primary' is rented, and others that you Medium Term Rent out. This is a strategy for the risk tolerant, although I think the risk is low when you can just Medium-Term rent the Airbnb if the city clamps down.
If you don't have enough cash for a MFH (or are less risk tolerant), the second best route in my opinion is the 'in-law' unit SFH. These are plenty of houses in Chicago that have a furnished 'garden level' basement and often have a separate entrance. These properties are super easy to satisfy the primary residence requirement, since it isn't even technically 2 units. You can acquire these properties significantly cheaper - as low as 5% down on a conventional mortgage.For investors that are not willing to move to Chicago or live in the building/unit, looking right outside the city limits allows you to operate legally. Places like Oak Park and Evanston are STR friendly at the moment, and others are unregulated (Skokie).
- Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes3y
Quote from @Grayson Schiller:
Who here is working the short-term rental market in Chicago? I am a Chicago native, working in development for the last six years. I'd like to expand my investment portfolio into STRS, but it's been challenging to get consistent information. For example, some brokers I've talked to have been insistent that if I don't live on the property my permits will be denied to legally run a STR. Other brokers have told me basically the opposite answer.
Without a doubt Chicago is a highly restricted place to try to launch an STR, but is it possible/ worth it? Let’s talk.Late to the party but here to chip in my 2 cents. I think there is an important distinction to make between whether or not Airbnb is profitable vs whether or not it is hard to set up. There's certainly some red tape and limitations for setting one up, won't deny that, but once you do set it up you could be making 150-200% of what you would make with a normal year-long rental. I'd also like to point out that Chicago is currently down ~3,000 units on Airbnb since its peak in 2019, so there has already been a culling of sorts. Just like any business, there is a learning curve and you need a good product and smart management if you want to see strong returns. If it counts for anything, I am currently planning to turn one of my long-term rentals into an STR when the current tenant moves out in spring. So despite all the Airbnb doomsday videos on Youtube, I think it's far from a dying breed.
- Investor · Germantown, NY · Member since 2022 · 12 posts · 7 votes3y
Hey @Michael K. thanks for the reply. How are you going about turning your rental property into an STR? I just purchased a 4 flat here and wanted to make one of the units an STR, but couldn't find a way to do that without declaring the building my primary residency and living in the actual unit I wanted to STR. I don't even live in the building so I thought this sounded too risky for my taste. LMK if you're just "risking it" or maybe you found a way to work around that I didn't?
- Investor · Germantown, NY · Member since 2022 · 12 posts · 7 votes3y
@Daniel Bourdeau I had a similiar idea with living in the building and having the basement as the STR part of my unit. However the property I was under contract for, while it had a garden all set up, it wasn't legal. I'd have to pull permits to get it at ADU status and than I couldn't STR it as ADU's arent able to be STRs.
- Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes3y
Quote from @Grayson Schiller:
Hey @Michael K. thanks for the reply. How are you going about turning your rental property into an STR? I just purchased a 4 flat here and wanted to make one of the units an STR, but couldn't find a way to do that without declaring the building my primary residency and living in the actual unit I wanted to STR. I don't even live in the building so I thought this sounded too risky for my taste. LMK if you're just "risking it" or maybe you found a way to work around that I didn't?
It's a duplex where I live in one of the units. If that's where you're running into a problem then I suggest looking into the travel nurse/tech scene for mid-term rentals.
- Investor · Germantown, NY · Member since 2022 · 12 posts · 7 votes3y
@Michael K. thank you and will do! do you know of any websites that I can find midterms, such as airbnb is to STR?
- Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes3y
Quote from @Grayson Schiller:
@Daniel Bourdeau I had a similiar idea with living in the building and having the basement as the STR part of my unit. However the property I was under contract for, while it had a garden all set up, it wasn't legal. I'd have to pull permits to get it at ADU status and than I couldn't STR it as ADU's arent able to be STRs.
About the garden unit, what is keeping it from being legal?
- Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes3y
Quote from @Grayson Schiller:
@Michael K. thank you and will do! do you know of any websites that I can find midterms, such as airbnb is to STR?
Furnished finder, also there are facebook groups for this.
- Investor · Germantown, NY · Member since 2022 · 12 posts · 7 votes3y
The property was zoned as a legal 3, but is in the part of the city where you can qualify for an ADU in the basement if you plan on converting into a regular rental- you can't get approval to convert into a legal garden unit if you plan on using it as a STR.
- Investor · Germantown, NY · Member since 2022 · 12 posts · 7 votes3y
@Michael K. best of luck with ur STR!
- Member since 2023 · 1 post · 0 votes3y
Glad I found this thread, y'all are very helpful! My husband and I have been looking for a property to use as an Airbnb in Chicago for a several months with no luck. We live in Michigan, but our son is in college in Chicago. We thought we'd get a place in Chicago so we can stay there once a month, while also renting it out as a STR. This plan has been harder to execute than we thought. Not giving up yet, but it seems impossible. Thank you everyone for your insight!
- Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes3y
Quote from @Grayson Schiller:
The property was zoned as a legal 3, but is in the part of the city where you can qualify for an ADU in the basement if you plan on converting into a regular rental- you can't get approval to convert into a legal garden unit if you plan on using it as a STR.
Is there currently a garden unit in the basement? or is it still an unfinished basement? If you are working with a blank slate the duplex down could be a good alternative to a garden unit but may be more costly since it could require reconfiguration of the first floor. Whatever you do, I suggest having a good water abatement system in place, as some Chicago basements still have a tendency to flood. I would also point out the difference between an illegal unit and a non-conforming unit.
Illegal = does not meet minimum criteria for habitability (ex. ceiling height, ventilation, windows, # of exits)
Non-conforming = building is not zoned for the current number of units.
The first concerns health and safety and is something that an inspector could flag you for, the second is a zoning issue, and inspectors do not come into your property holding a zoning cert in their hand, zoning certs have to be ordered from the city and can take weeks to receive.
In general, the garden unit is not on the City of Chicago's radar. In a lot of neighborhoods, they can be found in almost every basement. And for real estate investors, they can be a difference between no cash flow and significant cash flow. Personally, I know of garden units here in Chicago that have been operated out of single-family homes since the 1980s without any issues. I've also built out a garden unit in my 3-flat. And while I may not be able to market it as a 4 flat, I can reap the benefits of that extra income for my period of ownership.
- Investor · Germantown, NY · Member since 2022 · 12 posts · 7 votes3y
hey michael, you're absolutely right that there is a major difference between a legal vs non conforming unit. What I was trying to explain in my previous reply is that the property I was under contract for would be deemed an ADU as it legally is in compliance, but if I were to request permits to operate as a STR in the unit, that would not be allowed. That it would be illegal for me to operate an STR after receiving an ADU certificate on a basement unit
- Investor · Chicago, IL · Member since 2018 · 352 posts · 176 votes3y
@Grayson Schiller Thanks for clarifying, I understand your predicament now. I've been running an Airbnb in NW Indiana for a few years, and just put in the application for my Chicago unit. Not sure how far you got, but the requirement for proof of residency on the city website requires applicants to either upload a lease, state I.D., driver's license, utility bills, or deed that demonstrates their relationship to the property. They only allow you to upload one document - so at first glance the test for ownership/occupancy seems pretty low. I'll let you know how it goes.
Noting that this post is already 4 months old, what did you ultimately decide to do?
- Member since 2025 · 6 posts · 1 vote1y
Quote from @Michael K.:
@Grayson Schiller Thanks for clarifying, I understand your predicament now. I've been running an Airbnb in NW Indiana for a few years, and just put in the application for my Chicago unit. Not sure how far you got, but the requirement for proof of residency on the city website requires applicants to either upload a lease, state I.D., driver's license, utility bills, or deed that demonstrates their relationship to the property. They only allow you to upload one document - so at first glance the test for ownership/occupancy seems pretty low. I'll let you know how it goes.
Noting that this post is already 4 months old, what did you ultimately decide to do?
Hi Michael, How'd it go doing owner / occupant?
- 3yMark AinleyBusiness MemberProperty Manager · Roselle, IL (Chicago Suburb) · Member since 2013 · 2k+ posts · 1k+ votes
@Whitney Revoir @Grayson Schiller We recorded episode 143 with Jessica Ryan who went over all the ins and outs of short term housing here in Chicago. Great vantage point from POV of an attorney.
GC Realty & Development LLC4.61094 Reviews - Member since 2023 · 2 posts · 0 votes3y
hi, i own a 3 unit in chicago, i was denied an Airbnb License by BACP because the 2nd floor apartment i want to register isn't my primary residence, i live on the 1st floor! i applied for a Commissioners Adjustment and was still denied because i didn't prove an Extraordinary Burden though i had letters of recommendations from 2 neighbors and my 3rd floor tenant; i also addressed all the other questions on the Commissioner's adjustment request form. I appealed the Commissioners Denial and i'm now waiting for the City of Chicago's Law Department to schedule an in-person hearing. Do anyone here know what will actually qualify for an Extraordinary Burden or Hardship that BACP will accept?
Thanks!
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