Airbnb Rules in Watauga County, North Carolina ?

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Airbnb Rules in Watauga County, North Carolina ?

Tristan S.
Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes

Hi,

I wanted to know what were the rules associated with Airbnb or Vrbo in the Watauga County in North Carolina, more specifically in areas including Boone, Blowing rock or Banner Elk or other places in the High Country of NC.

Is there a maximum days per month limit that you can rent a place ? Does it have to be your primary residence ? Is there any HOA that might prevent any of this ?

I am really looking to get more local knowledge on this area, any help would be greatly appreciated !

Thanks

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Daniel Jones
Member since 2019 · 14 posts · 11 votes
5y

Hi @Christi Mercer, I'm glad @Tristan S. tagged me and I'm happy to connect. I'll also add my two cents for anyone else reading this thread.

I started short-term renting a house outside of Boone town limits back in August. As far as regulations go, I would definitely recommend talking to a local official about it before making any major decisions. I would also recommend reading this article from the Watauga Democrat about STRs in the county and town. https://www.wataugademocrat.co...

The article gave me a much better understanding of the operations of STRs in Boone when I was trying to make decisions. There are quotes from the town attorney about how "short-term rentals are “technically illegal,” but that the town’s planning department has not been enforcing it." Also from Watauga County Tourism Development Authority notes that "online rental companies now account for 30 to 31 percent of occupancy tax revenue". To me that says that the town greatly benefits from "technically illegal" STRs so I would be surprised to see any enforcement made to STRs in town limits. Again, it's ultimately up to you and I would recommend talking to a local lawyer to better understand the risks before making any decisions.

There are a few surprises that I discovered after I started. For one, the county and state taxes account for 12.5% of your rental revenue and I also use a management company (Evolve Vacation Rentals) that takes another 10% and that really eats into my potential income.

Another thing I want to note is that it takes a lot of leg work to make a STR worthwhile compared to a long-term rental. I had a buddy that did STR in Banner Elk and got burned out in just a few months because he took on everything on his own. He communicated with guests, cleaned, maintained, managed the listing, everything. Some people are cut out for that but I personally am not so that's why I use a management company and a cleaner which, again, eats into potential revenue but greatly put my mind to rest. Being on Queen St, you will likely have same-day turnovers and that's a lot of pressure if you try to clean on your own without having the extra hands that a cleaning company has.

On the other hand, since the pandemic, STRs in Watauga have been doing really well and I'm personally very grateful that I started when I did. I read another Watauga Democrat article a few months ago that stated 2020's third quarter (July-Sept.) provided the county with as much occupancy tax as entire years in the past. So obviously STRs around Boone/Blowing Rock are in high demand. I imagine this trend will continue as long as people are trying to find respite from cities during the pandemic. 

I also agree with Tristan that you seem to have a solid long-term rental as a backup if STR doesn't work out. I was in a similar situation and decided that it would be easier to pivot from STR to long-term but not so much vise-versa. I say, if you have the opportunity to do STR, then you should try it to see if it is a good fit.

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  • Julie McCoy
    Real Estate Agent · Sevierville, TN · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Tristan S. I know we've got some people on the board (@Adam Payne) with rentals in that area, but regardless of what information you receive here, always check with the local city/county zoning and codes administration to make sure you have official, up-to-date information.  (do a search for these government entities and you might be able to find the info on their website)

    0Reply
  • Tristan S.
    OP
    Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes
    7y

    @Julie McCoy thank you, I will make sure to dig on their websites. Hoping to get some answers from local investors there to hear from their experience.

    0Reply
  • Adam Payne
    Hickory, NC · Member since 2017 · 34 posts · 20 votes
    7y

    @Tristan S. we have a STR with a Blowing Rock address that is outside of the city limits. We are not in an area with an HOA, so I have no information on that. You'll have to check with the individual HOAs where you're investing. As for the county, I echo what @Julie McCoy said. I have found nothing so far that limits us using AirBnB (which we use exclusively), but do your own research. Do not trust me or any other individual in this forum as the ultimate authority. I am not an attorney, Watauga county official, or anyone with authoritative knowledge on the subject. 

    3Reply
  • Tristan S.
    OP
    Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes
    7y

    Thanks for the answer @Adam Payne, I will make sure to do my due diligence. I think that being outside of city limits (either boone or blowing rock) would probably be better.

    How has been your experience so far ? How many days a month are you booked on average ? Is there any major slowdown during winter ?

    Thanks for your help!

    1Reply
  • Adam Payne
    Hickory, NC · Member since 2017 · 34 posts · 20 votes
    7y

    @Tristan S. we have been on AirBnB for almost exactly a year with our 2 bed/2 bath cottage. Our occupancy rate is fantastic (hovers around 80-90% for most of the year (going from memory; no numbers in front of me at the moment)), but our rent still reflects "get to know you" prices (i.e. we are intentionally under priced to build AirBnB ratings and develop some regular customers). We also had a horrible experience having to drill a well that meant we had to dump $10k into cap. ex. while our cottage sat empty for the first 6 months we owned it. That was a sour experience that I still taste.

    There is a bit of a slow-down in winter, but not as much as we anticipated. We had a handful of tenants who came up for a long weekend in Jan/Feb just so they could see the snow. Plus, we are close to App Ski Mountain, so I think we get a few rentals for that.

    In the end, we should show a net profit by the end of this year. I've mentioned this in other posts, but I will work harder to buy a better deal on the next one. 

    1Reply
  • Zach Sprau
    Specialist · Boone, NC · Member since 2019 · 7 posts · 0 votes
    7y

    @Tristan S., I cant speak to Blowing Rock or Banner Elk, but looks like @Adam Payne is a great resource.

    I live in Boone working on my first house hack and tend do do some STR with it periodically. If you're thinking about Boone, where you are located in Watauga county can make a significant difference. Make sure you know the zoning of your house. Zoning and HOAs will be items to consider for sure. If you're outside the town limits it won't matter as much. Also make sure to check out the recent articles in the local paper (Watauga Democrat paper online) about STR noncompliance and the plan to start enforcing it over time.

    Finally, you have to pay county occupancy tax monthly to Watauga county with STRs.

    Happy to be a resource as you’re figuring things out.

    0Reply
  • Tristan S.
    OP
    Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes
    7y

    @Zach Sprau thank you for your input, it was very helpful, I found the article talking about the recent town meeting on STR.
    I think we would be fine with either Boone or Blowing rock but would most likely try to look outside of city limits to not get too many constraints. 

    Can you tell me more about your house hack ? Did you get a duplex planning on renting the other side? 

    0Reply
  • Doug Garrison
    Rental Property Investor · Pleasant Garden, NC · Member since 2016 · 6 posts · 6 votes
    7y

    @Adam Payne

    Adam, we've been investing in conventional rentals in Greensboro for about 25 years. We are considering dumping (cashing out) a couple of our worst performing houses and possibly buying STR in the Blowing Rock area. Your vacancy rate experience sounds fantastic. Way better than I expected. I have friends with NC beach property who feel lucky to get 8 or 9 weeks a year.

    Do you do your own management, booking etc. using AirBNB? The toughest part for me would be managing the cleaning etc on each turnover since it's a almost 2-1/2 hours from my house to downtown Blowing Rock. 

    0Reply
  • Adam Payne
    Hickory, NC · Member since 2017 · 34 posts · 20 votes
    7y

    @Doug Garrison We manage ourselves, but use a cleaning service up there who has been absolutely amazing. If you get a STR up and running up there, I cam put you in touch with them. We live about an hour away from BR, and if it wasn't for that whole well drilling issue, I'd only need to go up there about once a month or so (probably less, but I like to keep an eye on things since this is our first one). I'd say its totally do-able for you from Greensboro.

    As for your friend on the coast, I'm going to go out on a limb and say they do only week-long rentals...? We allow daily rentals, and I think that (along with our rates) is why our occupancy is so high. It is more hassle, but in Blowing Rock, people mostly want 2-3 nights at a time. We used to live on the SC coast, and we have on our radar to look into STR down there. We've seen the same thing there with people only wanting to rent homes out for a week at a time.

    0Reply
  • Emir Dukic
    Rental Property Investor · Charlotte, NC · Member since 2019 · 57 posts · 26 votes
    7y

    @Tristan S.The NC General Assembly just passed a law that prevents cities from regulating Airbnb: https://indyweek.com/news/wake...

    Plenty of talk around enforceability from both a state and local perspective but a relatively positive step for NC and should help with your thinking.

    0Reply
  • Tristan S.
    OP
    Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes
    7y

    @Emir Dukic thanks for sharing! That is good to know but I will make sure to make my due diligence before pulling the trigger.

    Do you have any investment in the high country Emir, or you do focus on Charlotte ?

    Thanks everyone !

    0Reply
  • Ryan Warrenburg
    Boone, NC · Member since 2018 · 16 posts · 4 votes
    7y

    @Tristan S. I don't have any experience with STR in the area, but do live in Boone and I believe STR in Boone are not allowed in areas that are zoned R-1. I live in a neighborhood where this is the case, but have a couple of neighbors who do it and don't have any problems. I also know Blowing Rock recently passed a city ordinance banning STR in the downtown area - I'm not sure exactly what is defined as downtown. But the move by the General Assembly is very interesting, I hadn't seen that. Again, this is just what I'm aware of being a Boone resident. Hope that helps and best of luck!

    1Reply
  • Emir Dukic
    Rental Property Investor · Charlotte, NC · Member since 2019 · 57 posts · 26 votes
    7y

    @Tristan S. primarily in the Charlotte area but exploring that part of the state

    0Reply
  • Steven Rausch
    Denver, CO · Member since 2016 · 12 posts · 7 votes
    7y

    @Emir Dukic How is the Charlotte STR market? I moved away a little over a year ago and I'm still obsessed with the growth of the city as of late. I'd imagine the STR growth is closely following?

    0Reply
  • Emir Dukic
    Rental Property Investor · Charlotte, NC · Member since 2019 · 57 posts · 26 votes
    7y

    @Steven Rausch Charlotte, and most of NC, is great market for STRs. Growth resulting in lots of interested visitors and investment ops

    2Reply
  • Ashley Rummage
    Real Estate Agent · Raleigh and surrounding areas · Member since 2019 · 39 posts · 14 votes
    7y

    Been following along the Boone thread! I am from Boone and live in Raleigh but hope to invest up there one day. Just saw this in the Democrat: https://www.wataugademocrat.com/news/boone-discusses-short-term-rental-regulations/article_927e7601-4f1b-5070-beda-bc9d5c516c7f.html

    1Reply
  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    7y

    Little details... the NC state general statutes (NCSG) prohibit some of the items identified in the stories linked above. From the NCSG 160A-424. Periodic inspections for hazardous or unlawful conditions, text states: 

    (c) In no event may a city do any of the following: (i) adopt or enforce any ordinance that would require any owner or manager of rental property to obtain any permit or permission from the city to lease or rent residential real property or to register rental property with the city....

    there are exceptions, but the gist of the SB 326 bill clearly made these type activities by cities against the rules that the committees passed back in 2016. Raleigh and some surrounding cities had rental registrations until SB 326 passed. 

    Note that I am not an attorney. If a city requires you to register your STR, you may want to read the applicable state statutes and then decide what (if anything) you want to do... hopefully with the help of an attorney.

    3Reply
  • Christi Mercer
    Charlotte, NC · Member since 2015 · 7 posts · 0 votes
    5y

    Hi! I wanted to re-start this conversation! @Tristan S. what did you discover about AirBNB's in Boone? I currently have a long term rental that I want to convert to a STR and when I talk to planning/zoning and read the guidelines, the language is muddy to me. Let me know your thoughts!

    @Adam Payne

    @Adam Payne @Zach Sprau @Emir Dukic @Ryan Warrenburg please feel free to add your thoughts too! TIA.

    0Reply
  • Tristan S.
    OP
    Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes
    5y

    @Christi Mercer it will be based on the covenants and restrictions put on the deed. You can search Warangal registry of deeds on google and search for your name. Read through your deed and look into all the other deeds referenced on your deed, sometimes, the restrictions will be on previous deeds.

    If you are outside of Boone and blowing rock city limits and that the property is not part of a POA/HOA then you should be mostly fine.

    Where is the property located ?

    0Reply
  • Tristan S.
    OP
    Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes
    5y

    I meant Watauga registry of deeds *

    0Reply
  • Christi Mercer
    Charlotte, NC · Member since 2015 · 7 posts · 0 votes
    5y
    0Reply
  • Christi Mercer
    Charlotte, NC · Member since 2015 · 7 posts · 0 votes
    5y

    @Tristan S. there are only two deeds on file for my property.  The above is not in my deed but in the previous deed. What are your thoughts? My home is located downtown - Queen Street.

    0Reply
  • Tristan S.
    OP
    Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes
    5y

    @Christi Mercer you are within the city limits of Boone, so you would be held to their local zoning rules or whatever ordinance they have or will come up with. I would try and contact someone at the town to see where they stand on short term rental for your specific property and current zoning.

    0Reply
  • Christi Mercer
    Charlotte, NC · Member since 2015 · 7 posts · 0 votes
    5y

    Yeah, I did that already and that's where the language was really muddy, per one of admins at the office. The advice I got was "as long as no one complains or turns you in then it shouldn't be an issue." When I look at the map on AirBNB I can see that there are several located in the downtown area. My home doesn't really have neighbors and the closest homes have always had student rentals but they're not close enough to be problems. I want to connect with someone who is doing STR and see how the return is. Should I continue to run the long term or make the switch!?

    0Reply
  • Tristan S.
    OP
    Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes
    5y

    @Christi Mercer that’s the potential challenge is that one day, they might ban it all if enough people complain.

    Anyway, I would just do a plain analysis. Compare your income with the long term income vs expenses and do the same thing with the short term rental option knowing that the expenses will be higher (maybe planning on using management ? I know they can charge around 20/25% of gross revenues).

    I think that @Adam Payne, @Daniel Jones and @Ryan Warrenburg would be able to help when it comes to estimating expenses of running an airbnb and potential income.

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