AirBnb & STRs coming under regulation/restrictions

8 Replies

Malibu, CA joining the frey on STRs:

A very typical response to STRs ( according to is 

  • The Council is concerned that people would buy property in Malibu for the sole purpose of renting it out on services such as AirBnB. The issue was brought up at the Council's meeting Monday.
  • “I think this is sort of like a watershed event,” Councilwoman Joan House said. “It’s serious when somebody takes a home in a residential neighborhood and rents it out like a hotel.”

Other cities have already severely restricted this business model and impose heavy fines.  

IMO, there's a fine line between a vacation rental in a well know resort location (mountains, lakes, skiing areas) and a STR in a desirable metro area like NYC, SF, Seattle and now Malibu.

I dislike this model due to the high turnover and exposure to vacancies, but now there's every chance your REI can be wiped out by local regulations. THINK TWICE before you opt for a STR business  model.

@Jeff B. . Thanks for the update. I hear a lot of people wanting to buy a place as an STR. First step has to be to check all the local zoning and license regulations. Potential STR investors need to go further and give their council office a call to see if anything is in the works.

That said, probably the best thing to do would be to buy an investment property in a location where you are allowed to do STRs. But run your numbers beforehand based on it being a long-term rental. Then, you can rent it on Airbnb, make good money, and you still have a cushion when/if the city changes the law and you have to switch to a long-term model.

For Seattle, what is proposed is a maximum of 90 days as short term rental in the calendar year. Short term rentals are typically defined by anything less than 30 days.  In Seattle and other major markets, there is enough demand for greater than 30 day usage and less than three months.  These are people relocating to the area, tech workers, traveling nurses, family visiting from other countries that want to stay longer than a typical hotel stay, etc..  You can fill your investment property with these users and use the maximum of 90 days to fill the vacancy.  You can make around 50% more rent this way than renting your unit long term.  Of course, this all depends if the investment property is in an ideal location for this and if you have the time and effort to do this.

I have been doing this for the last year and it works great and I have enjoyed it.  Some won't enjoy it because it takes more effort.  I have noticed that the people coming through take better care of my property than a long term renter would.

@Thomas Mattausch

@Paul Weller is right about the kind of medium-term rental. I think location is key. I have a furnished 350-square foot studio that my wife and I have been renting successfully to traveling nurses. It's in a cool neighborhood in Denver close to bars, restaurants, arts, etc. I'm not sure if Paul is talking about his Seattle place being furnished or not. In my experience, it helps. This model is a bit more effort for two reasons. One, you have to spend the time and money to furnish it. Two, you have turnover a few times a year so you have a little more cleaning duties than a traditional long-term rental. 

The plus side is that you get, as Paul said, about 50% more rent than a traditional unfurnished long-term rental. That's nothing to sneeze at, and I'm more than happy to do the little extra work for that cash.

How do you find tenants?

Craigslist is great. Post your listing under "apts/housing for rent" AND "sublets & temporary." Be sure to have some nice photos taken of your place. Some of your tenants won't even see the place in person, so their entire idea of your place rests in those photos.

Airbnb can work as well. Post your listing there and set a 30, 60, 90 day minimum stay (or whatever minimum you want). 

Go specific. I posted my listing on a few Facebook pages for traveling nurses.

Hope some of this helps.

Airbnb, VRBO, Craigslist, and TripAdvisor. In Airbnb and VRBO, there is a setting where you can indicate minimum stay requirements so when people are looking for the >30 days your listing pops up.  

I live in an area that has heavy regulations on STRs. It's annoying, but not the crisis many people think it'll be. The majority of people in my community still make the majority if their income from running STRs, because there is massive demand for it here. The regulations make it irritating sometimes, and you have to check to be sure you're in compliance because they watch you like hawks here, but nobody is going to put the kibosh on it any time soon, considering it'd collapse the county's economy if they eliminated STRs.

@Libbie Grant LOL ROF Some have become dependent upon renting rooms or STRs, but the the GDP will not collapse and housing per se will not see another 2008 mortgage fiasco from STR issues.

Originally posted by @Jeff B. :

@Libbie Grant LOL ROF Some have become dependent upon renting rooms or STRs, but the the GDP will not collapse and housing per se will not see another 2008 mortgage fiasco from STR issues.

 I said county economy, not country. What a difference one letter makes. :)

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