Friendly Short Term Rental Cities

41 Replies

Cities and “AirBnB” do not mix.

Google “AirBnB” and hit the News button. Everyone is shutting it down.

I’m in Gatlinburg Pigeon Forge where there are about 10,000 log cabins. 5 of which I own and self manage remotely.

13,000,000 tourists
15,000 residents.

Without the tourists the economy would collapse.

We pay our taxes and commercial electric rates and everyone is happy :)

There is a difference between an “AirBnB” and a Vacation Rental!

Hi @Lucas Carl,

Understood. But what separates the two? they are both short term rentals, correct? Is it just the way Airbnb is set up and the way they handle issues?

Aside from that, does this mean that "vacation rentals" like homeaway etc is legal/friendly in most cities?

No. It means AirBnB has become a dirty word because people do things like get a lease on an apartment in a large apartment building in NYC and “AirBnB” it until they get caught then they get booted and they find another building and do it again. 

Or you rent your cousins closet on AirBnB without telling him and he comes home an unexpected guest. 

You can list a “Vacation Rental” on AirBnB. 

@Joseph Ammar

No. Because of “Airbnb’s” (I quote it because it has become synonymous with your cousins closet) cities are not interested in any form of vacation rentals. My guess is you haven’t tried my google news trick yet? You should it’s easier than replying to this. You’ll see what I mean. 

Think if it this way....

Nashville. Neighborhood. 65 year old couple on either side. 

Bachelorette party with 12 22 year old girls that have never been to a honky tonk. Drunk. For 3 days. Blasting music. Neighbors aren’t happy. 

Keep voting on my replies if you want me to keep replying ;) 

My VRs are in a tourist only area. Very few people live there. You’re making me repeat myself ;) 

Originally posted by @Joseph Ammar :

Ok - Are cities more ":friendly" with vacation rentals?

To answer your question, yes, there are cities that are more friendly to vacation rentals, even AirB&B. I think the right way to do it is to look for places that have regulation, licensing and tax infrastructures in place. For example, I am in the central Florida market. It is very tourist friendly and everything is already in place to make my STR's legitimate. We have to obtain a hotel license for each property and collect sales and tourist development taxes. The neighborhoods we are either completely or mostly STR's.
If every city did it this way, there would not be so many issues.
I think that what is eventually going to happen is that the cities that do it right and that have a reason for tourists to visit will end up becoming much more attractive to vacationers than cities that don't.

Great points by Lucas.

I too have seriously considered Airbnb in popular cities. Places I’d like to have an excuse to go enjoy. Based on my on going research Lucas seems to be right, unfortunately.
I think what Lucas is saying is you’re gambling if your game plan is to have a short term rental in a community of primary residents. These residents are having their local politicians take action against the Airbnb market to disallow it.

Lucas’s point is if you want to but a short term lease, buy it in a market that welcomes short term leases.

I like to have my cake and eat it too, so I’ll keep researching. But I’m afraid I’ll play the safe bets and there are only two options.

1) Purchase to short term rent in an accepting community. One that’s been welcoming of it since before AirBnb. Before smartphones. A community that thrives on it and knows it.

2) Purchase a property to Airbnb in a city. One that may not be accepting and change may be impending. The properties MUST also make sense in another form of investing - such as long term leases. IMO I don’t think you’ll be able to sell out and break even. If you’re selling, that means everyone else who was airbnbing is selling. So you can say goodbye to appreciation appreciation.

Thoughts?

As others have said, there are some VERY safe STVR markets out there.  Local economies depend on them and it’s a symbiotic relationship.  The plus to these markets is that it would take something very major to change their policies.  The negative is, since they’re ‘safe’ areas there are a TON of them, thus high competition.

There are also less safe areas that allow them in certain cases and in certain areas.  These cities tend to be less touristy and are more residential.  The regulations are also usually in the grey area, meaning there’s no well defined policies either way.  This makes it nearly impossible for an owner to do the ‘right thing’.  

And then there are the cities that just have their heads up their @$$es like most of them here in California. Lake Tahoe is a pretty good example.  

@Joseph Ammar I'm in Fort Walton Beach/ Destin, Florida. Short-term vacation rentals is pretty much one of the main industries here with privately owned condos being more popular and numerous than hotels. The industry is regulated here (transient occupancy taxes, etc) but in no danger of being restricted in any way. Anywhere on the Emerald Coast (Pensacola, FL to Panama City Beach, FL) is very friendly to short-term rentals in my opinion and quite profitable as well. In our market Airbnb actually collects and remits the occupancy tax on behalf of the owner/manager because there are so many rentals here. I use both Airbnb and VRBO. We also have Emerald Coast By Owner site. 

Hi Everyone,

@Joseph Ammar , of course with all the research I've compiled on this subject alone, you know I had to chime in on this post! ;) To answer your initial question, unfortunately, the short answer is "no". There isn't a directory/resource of Airbnb cities with regulations that are "friendly" to Airbnb investors. It sounds like I need to make one! 

On the other end of the spectrum, there are a few cities which vary from semi-harsh to harsh regulations, i.e. rules on how many units you can list, requiring the owner to live on the property, limits on the number of days you can rent out to Airbnb guests, etc. Those cities include: 

- Chicago

- San Diego

- Palm Springs

- Los Angeles

- Santa Monica

- San Francisco

- New York

- New Orleans

@Pedro Adorno   @Lucas Carl , great points here. However, another thing that affects the "Airbnb Investor friendliness" is your target market. Most of the investors I work with utilize Airbnb and other STR platforms to list corporate travel accommodations, primarily targeted to business travelers and professionals. That cuts down on the amount of "leisure" travelers and "partiers" that have the potential to cause property damage. This may not change the regulation issues, of course, but it does help to sway landlords in the direction of a "yes" if they are on the fence about you turning their property into an STR dwelling. There are a few other tactics I've used to sway landlords, that I'd be happy to share, as well. Feel free to PM me with any other questions!

I agree with @Lucas Carl and not just because he helped me get started :)

But I would point out that the bad rep that AirBNB has varies by location. Nashville is a perfect example of a place where it's hated, for the reasons he pointed out. By in Gatlinburg/Pigeon Forge where he has his cabins and I have mine, it's a perfectly acceptable and respected system. VRBO/HA is still bigger though. I use both platforms.

Slightly off-subject, but I'll point out that AirBNB accounts for 45% of my bookings, but only 30% of revenue. AirBNB guests average stay is 2.9 nights, VRBO is 4.1. Plus, VRBO bookings tend to be made further in advance.

Therefore, it can be said that VRBO guests pay more, stay longer, and plan better.

@Lucas Carl, I'm not sure what you  mean by "everyone is shutting it down" or "There is a difference between an “AirBnB” and a Vacation Rental!"   Neither of those are my experience here in vacation rental-friendly NW Florida (Panama City and PC Beach).  Our cities mix NICELY with Airbnb.  I've been a host since 2015 and was one of only FOUR in Panama City (not the beach) when I started.

@Joseph Ammar NYC is not every city.  There are MANY reasons to have a short-term rental property, and it's not ONLY beaches, tourists, or big cities.

@January Johnson what’s your real name? 

There are of course exceptions to the rule otherwise no one would hang out on the VR forum. Although I couldn’t get the math to work on PCB condos without paying cash. 

@Tim Schroeder , I used to list on VRBO, but I didn't want to pay the extortionist rates they wanted to make my listing "visible" in their super-saturated listing market.  I was paying 8% per transaction (because I didn't want to pay $1,200 a year to list), but on Airbnb, I only pay 3%.  The math just didn't work out there.  I went to a HomeAway conference, and the IT team couldn't even FIND my listing on their site - ridiculous.  Also, 95% of my business was coming from Airbnb, so I ditched VRBO/HomeAway altogether and haven't been sorry. 

I think the amount of "partiers" you have is directly related to your price structure, the way you present your listing, and your deposit - not a function of Airbnb vs VRBO (though I do have a younger crowd from Airbnb, but I think that's because of their platform).  My personal experience of VRBO guests is they are older and not as tech-savvy as my Airbnb guests.  

I also disagree that VRBOers plan further in advance.  My Airbnbers have booked my place into April of next year already.  I love Airbnb - the interface, the company, the ease of set up and payments, etc. - and will only use them.  But I can see how it all comes down to personal (hosting) experience and preference.  Airbnb is mine as a host AND as a guest.

Also, I am licensed and pay my city and county taxes monthly.  

I don't see how Airbnb is any different than VRBO in broader terms, though.  They are both platforms for short-term and vacation rentals.  It's like saying Chrome is different from Safari.  They both get you where you need to go - they just look different.  

My $0.02.

The key is to stick with markets which are STR friendly. As for VRBO vs. Airbnb it is correct to say what you offer (product), at what rates, drive which booking platform. Since I do not accept less than 5 night stay unless filling a small whole in the calendar I find 75% of my bookings are VRBO, 15%direct sales and 10% Airbnb. 90% of my 2-3 night holes are filled by Airbnb. I am on chart for 320-330 nights booked every year. Just what my data shows.

Typically san diego has been good, but look at this article.  That may be going away.  We wary of buying for that purpose, because teh laws could change on you. http://www.sandiegouniontribune.com/business/tourism/sd-fi-airbnb-council-20180715-story.html

I believe that listing on multiple websites (Airbnb, VRBO, and HA) can prove helpful but it may prove detrimental. Your primary website or lead source can be like a circular snowball that grows over time. The more bookings you get with a particular source, the more reviews you get with that source, and the higher you appear in the search rankings for that source. Then your newly improved higher rankings and positive reviews lead to more bookings which restarts the circular cycle. In my opinion you might be better choosing 1 source and sticking with it. If you have 3 sources, none of them will be very great. If you already have 100 reviews with VRBO you will likely continue to get most of your bookings through that website even if you offer your property on other sources. However, if you are just starting off, I would recommend Airbnb. The website is very friendly and the fees are lower. www.airdna.co is a great source for data that can help you choose a city. Also, Airbnb provides some details on short term rental regulartions by city under the section entitled "Your City's Regulations" on this webpage: https://www.airbnb.com/help/article/1376/responsible-hosting-in-the-united-states

It does not matter whether AirBNB or VRBO is better, what matters is getting the exposure. Every locale is different. In NYC, AirBNB may rule. In the Smoky Mountains, VRBO rules. That's the platform guests go to. I am on both, but I get 70% of revenue from VRBO. To not be on VRBO would be suicide, so the the $500 annual fee is not something that can (or should) be avoided. It's just the cost of doing business.