I currently own 2 short term rentals and working on adding more but it seems City's are cracking down on short term rentals and I wanted to start a discussion on this topic to see what others are running into and see if anyone has challenged the local code with any success. I am working on buy a home in St. George Utah and have run into some crazy rules such as being required to get approval from you neighbors within 500 ft.
Excellent question, Cole. It falls in the VRBO and executive rentals market. There is good money to be made there for the right property in the right location. I know people in SLC near the ski resorts that do quite well. But cities and municipalities are cracking down. Sadly. I love the VRBO route when I travel. But it's very new, city by city, and a wide range of differing regulations (mostly being pushed by the hotel industry). For those reasons, and that I have not had a call from clients about it, I really haven't researched it. Sounds like a good webinar topic. I'll dig in a little bit and see what i can find out then do one of my webinars on it. Probably early next year as this years topics are booked. Please let me know if you find anything out.
thank you Jeffrey Breglio I look forward to hearing what you find. I have a hard time seeing how a city or county can completely restrict one form of rental but allow 30 day rentals without any regulation. They say they are not residential use but a business, however they allow hundreds of types of home business. I can open an auto repair shop but I can't rent my house for the weekend.
Under 30 days falls into a different category and you may be subject to hotel tax at the state level. I believe AirBnB takes care of this where VRBO is just a classified ad site.
We haven't seen much AirBnB activity in Utah, but places like SF are famously changing city ordinances.
Most Utah cities have approved zoning for lodging like Bed & Breakfasts, but they haven't addressed week long accommodations. It happens all the time in Bear Lake with no problem. I'd imagine Eden is a fertile market for it as well. Have you talk to your local municipal staff about it?
Interested to hear more....
I've had a vacation rental home in the Bear Lake area for several years. Haven't had any problems with the city, just need to be licensed with them as a short term rental. The city will also set the maximum occupancy and parking limits and restrictions.
Local HOA's, on the other hand, are pretty restrictive in this area. If you end up with a vacation rental in bear lake, reach out to me and we can swap notes.
GREAT TOPIC. Yes, many cities are regulating or restricting short term rentals. We have had to cease and desist in Miami and NYC daily and weekly rentals we had been very successfully managing for 10 years. Very sad.
We are in the market for more VR properties (own 5 currently) and the biggest question we have is how do we find out where they are allowed? If we were to purchase in an area that all of a sudden restricted them, we would be in financial trouble.
WHO do you call in a town/municipality/county to get the answer to this question?
Our rentals are in small town in Adirondack Mts, there are few hotels, the towns need the income from visitors, so there are no restrictions. However, might I add one small story - one of them is on a lake that had only one other vacation rental when we were in contract to purchase. This small town (via a disgruntled neighbor of the VR) told the VR they had to shut down. The VR owner happened to be a lawyer, so he sued the town to remain a VR stating they had no right to tell him what to do with his property. He won. The town appealed. He won again. So we watched, waited for this result, then bought. It is our most successful VR. However, just goes to show that even small towns might take a turn towards a ban.
Specifically we are looking for southern coastal properties - FL, Bahamas, CR, that sort of place.
There doesn't seem to be any hard and fast rules out there yet. Different cities are taking different approaches with some just ignoring the issue. Your best source is to approach any city directly to find out how they will deal with your particular situation. The problem is that you will likely get the opinion of the individual that you speak with -- it may not actually be what the City (i.e. City Council) will do and very likely is not a legal answer.
Ms. Paler's answer above is a case in point. One home owner complains, the City "reacts" based on their feelings, their biases or just on politics, but it doesn't mean that the answer is really grounded in law. So, baring a court case or clearly articulated set of policies, you may run into pushback from cities or you may glide through (for now).
Now, to put my City hat on (I do development, advise developers and handle the City's real estate portfolio) the biggest obstacle is zoning laws. Look at it from a home-owner's perspective. They buy in a neighborhood where zoning has said "residences". They didn't buy in the commercial area because they don't want to be around that stuff. Now, a home-owner goes and turns his house into a "bed and breakfast" or short term rental. They all of a sudden are living next to a business.
My thought is that there is a zoning issue here that is in conflict with owner's rights to make use of their property. I imagine we will see a lot more "minimum stay" regulations to overcome the conflict.
@Cole Schlack I'd encourage you to look into the news for San Diego County on this subject. I think you'll get a good education. I don't have any VR's but I've seen a lot on the news here regarding the zoning of these properties and each city is different with many cities creating new municipal codes to address them.
They seem to be allowing VR's along the coast west of Interstate 5, but are restricting or limiting them east of I-5 in the residential neighborhood. This last week the city of Del Mar had a heated council meeting on the subject and council took the matter under advisement as they work on their law for this.
@Maura Paler I would love to hear what you are doing now with your VR that you had to shutdown. I think @Matt Brookshier is correct you have to check with each city or county plus the HOA. You can call planning and zoning depts. to find out but I prefer to go to their website and find the code myself. Another great way to find out is to look on VRBO and find a PM company doing VR they will usually the rules. I'm curious to know if anyone have fought the system. I know in Weber County Ut where I live it is against the zoning to rent for less than 30 days but they don't enforce it.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!