Rental Property Investor · Nashville, TN · Member since 2013 · 63 posts · 43 votes
7y
Most municipalities have their ordinances posted online, so that would be the first place to start. Also, placing a call (good luck) to the codes enforcement office of the jurisdiction in which you are contemplating an investment. There are multiple levels - State, County, City...so unfortunately there is no easy answer.
And the bigger unknown is what regulations may come to pass in the days/weeks/months after you close on your purchase.
This is such a fast-moving space that your best defense is to make sure that you aren't underwriting your investment on STR revenue alone. Make sure it also works as a LTR, fix and flip, etc.
If you find a market that is clearly pro-STR, then its likely the numbers will be thin because the market has already factored that in to the price of the properties. You're likely buying at the top of the market, and the downside could be ugly.
STR is a great biz model, but not the most stable. Make sure you have multiple exit strategies, in case STR goes sideways.
Rental Property Investor · Nashville, TN · Member since 2013 · 63 posts · 43 votes
7y
Most municipalities have their ordinances posted online, so that would be the first place to start. Also, placing a call (good luck) to the codes enforcement office of the jurisdiction in which you are contemplating an investment. There are multiple levels - State, County, City...so unfortunately there is no easy answer.
And the bigger unknown is what regulations may come to pass in the days/weeks/months after you close on your purchase.
This is such a fast-moving space that your best defense is to make sure that you aren't underwriting your investment on STR revenue alone. Make sure it also works as a LTR, fix and flip, etc.
If you find a market that is clearly pro-STR, then its likely the numbers will be thin because the market has already factored that in to the price of the properties. You're likely buying at the top of the market, and the downside could be ugly.
STR is a great biz model, but not the most stable. Make sure you have multiple exit strategies, in case STR goes sideways.
"...your best defense is to make sure that you aren't underwriting your investment on STR revenue alone. Make sure it also works as a LTR, fix and flip, etc."
Check local Code enforcement and zoning office. They should know all the rules.
I was afraid someone might suggest this... :-p
The properties I'm looking at are in a different municipality than where I live, but the one time I have had to deal with the zoning office here, it was borderline ridiculous.
Several (unofficial) sources told me I wouldn't need a permit for a remodel we were doing on our very rural primary residence. A retired county gov't employee overhead one of these conversations and said I had better check with the zoning office anyway. Not wanting any trouble, I heeded the advice. When I inquired about the permit, the ladies in the office looked at me like I was crazy. They said that people out our way don't come in for those, basically because the county doesn't have anyone to enforce it. BUT, since I was there inquiring I would be required to have one...
I'm not sure if you call that funny or sad or what. I completely get better safe than sorry, but it sure felt like a waste of $150.
Thanks for the advice, though, on which office might have the information I'm looking for.
I just hope they don't decide to start enforcing some new regulation just because I showed up and asked. I hate being the guy who ruins it for everyone else.