HOA Issues with Airbnb: Fight it? Turn Corporate? Other items?

Short-Term & Vacation Rental Discussions
6yFollow

HOA Issues with Airbnb: Fight it? Turn Corporate? Other items?

Jonathan H.
Member since 2019 · 24 posts · 6 votes

Hi!  

Perhaps too impulsively, I invested 20k to set up an Airbnb in an HOA governed neighborhood: one of the few left unregulated outside of Boulder, CO, and the neighbors just informed me that there are several clear rules I am breaking with my Airbnb Ads, he has found them and requested I stop at threat of calling in the HOA.

Im looking at creative solutions... 

ROOMMATES

A fall back is to go with roommates of course, that would cover the rent and given its furnished I might make back my investment capital in 2-3 years. 

CORPORATE RENTALS

Can I do corporate rentals with a 30 day min?  If I do that, what might that look like?  I found several options on other posts but have not found any sites that seem to be operating significantly in my area. 

AIRBNB W 30 DAY MIN

Seems reasonable, although technically the HOA rules state that any commercial use is forbidden and that they will interpret an airbnb listing as evidence of such.

Any other options?

I have been offered an out, in 8 months, which means that I could get roommates to cover the rent, and move all the furnishings into a new home to recoup 70% of the investment capital... Thats definitely a possibility. 

Would love to hear what others would do in the same situation. 

0Reply
38 views

Most Popular Reply

Paul Sandhu
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
6y

Corporate rentals are a myth in my opinion.  I've sent out solicitation letters to at least 50 companies in the last few years and zero have responded.  I've rented out STRs to at least 1500 people here for work in the last 8 years (refinery contractors).

Every single one of them is given a per diem. They are told to come here, find a place to stay, then report for work. The actual person staying in your STR is the one that makes the decision to stay there. The companies are very hands off when it comes to where their employees stay.

Now there are some companies that put their people up in motels.  I've met their management and asked them why they don't put people up in my places.  They tell me "Your houses are nice, you don't want the kinds of front line people we hire to stay in your places.  There is a reason they are in a motel room by themselves.  There is also a reason why we pay the motels directly for their stay, they have poor money management skills."  And then I meet some of the front line people staying in a motel.  I don't like them.  Some of my tenants come to my own house to drink beer and shoot guns.  Some of my tenants buy me a beer if they see me in a bar.  The scum people staying in a motel, I would be afraid to drink beer with them because I fear that I might get stabbed.  For real.  They look like felons.

1Reply
See this reply in the discussion

12 Replies

Jump to latestLatest
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6y

    Sounds like all STR options are out since this is prohibited and your HOA is watching you closely.

    Roommates may be a good option given the short payback.

    0Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    6y

    Corporate rentals are a myth in my opinion.  I've sent out solicitation letters to at least 50 companies in the last few years and zero have responded.  I've rented out STRs to at least 1500 people here for work in the last 8 years (refinery contractors).

    Every single one of them is given a per diem. They are told to come here, find a place to stay, then report for work. The actual person staying in your STR is the one that makes the decision to stay there. The companies are very hands off when it comes to where their employees stay.

    Now there are some companies that put their people up in motels.  I've met their management and asked them why they don't put people up in my places.  They tell me "Your houses are nice, you don't want the kinds of front line people we hire to stay in your places.  There is a reason they are in a motel room by themselves.  There is also a reason why we pay the motels directly for their stay, they have poor money management skills."  And then I meet some of the front line people staying in a motel.  I don't like them.  Some of my tenants come to my own house to drink beer and shoot guns.  Some of my tenants buy me a beer if they see me in a bar.  The scum people staying in a motel, I would be afraid to drink beer with them because I fear that I might get stabbed.  For real.  They look like felons.

    1Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    6y

    @Paul Sandhu I wish Kansas wasn't so far. Shooting guns and drinking beer at Paul's house sounds like fun!

    1Reply
  • Paul Sandhu
    Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    6y

    @Bjorn Ahlblad  There is a 2 spigot kegorator in my garage, with 2 premium beers on tap at all times.  My skeet thrower is electronic.  It runs off a 12 volt deep cycle battery.  Foot pedal launches the bird.  Have 3 12 gauge reloaders too.  The only reason we ever stop shooting is that it's too dark or we have run out of clay pigeons.

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    6y

    Hey @Jonathan H.. Sorry to hear about your problems, but that is HOA's for ya.

    The only thing you can do is either LTR or try and room-mate thing. Corporate rentals are not a myth, but they aren't easy. My neighbor here in Olympia has a corporate rental. 1 bedroom in her basement. We are a state capitol so she gets lobbyists and other support staff for the legislature. So it is doable if you have the infrastructure to support it.

    Unfortunately, it is a business use as it vacation rentals so I think you are stuck with long term tenants (which isn't a bad thing) or trying the room-mate thing. Which could cause more neighbors to notice. More turnover etc might cause a ruckus.

    Sorry man, you might be stuck.

    0Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    6y
    Originally posted by @Paul Sandhu:

    @Bjorn Ahlblad  There is a 2 spigot kegorator in my garage, with 2 premium beers on tap at all times.  My skeet thrower is electronic.  It runs off a 12 volt deep cycle battery.  Foot pedal launches the bird.  Have 3 12 gauge reloaders too.  The only reason we ever stop shooting is that it's too dark or we have run out of clay pigeons.

    1Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    6y

    Short-term rentals and the competition growing and municipal regulators are headaches enough. I can never imagine buying anything in an HOA to try to rent on a short-term basis!

    0Reply
  • Chris Gottshall
    Rental Property Investor · Portland, OR · Member since 2017 · 92 posts · 80 votes
    6y

    What's the penalty for violating these rules? If they are going to fine you $100 / month until you stop violating, then maybe it is just a cost of doing business. But I know that many HOAs will have escalating fees for 1st, 2nd, 3rd+ violations, and they may fine you by the DAY which would make it hard to offset with rents. I would probably go the long-term rental route if I were in this same situation.

    0Reply
  • Matt M.
    Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
    6y

    Are you allowed to rent your home at all or is that considered "commercial use?" You might look at 30 day mins on airbnb for traveling nurses. I believe
    @James Carlson uses this strategy with his rentals/clients.

    0Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    6y
    Originally posted by @Paul Sandhu:

    @Bjorn Ahlblad  There is a 2 spigot kegorator in my garage, with 2 premium beers on tap at all times.  My skeet thrower is electronic.  It runs off a 12 volt deep cycle battery.  Foot pedal launches the bird.  Have 3 12 gauge reloaders too.  The only reason we ever stop shooting is that it's too dark or we have run out of clay pigeons.

    Sounds like a dream setup Paul! 

    0Reply
  • Mark Miles
    Rental Property Investor · Philadelphia, PA · Member since 2016 · 543 posts · 716 votes
    6y
    Originally posted by @Chris Gottshall:

    What's the penalty for violating these rules? If they are going to fine you $100 / month until you stop violating, then maybe it is just a cost of doing business. But I know that many HOAs will have escalating fees for 1st, 2nd, 3rd+ violations, and they may fine you by the DAY which would make it hard to offset with rents. I would probably go the long-term rental route if I were in this same situation.

     Ohhhh no no no no no. This isn’t some far-off municipal entity occasionally fining you, it’s your neighbors! They will make your life living HELL for you & your guests until you get only 1-star guest reviews & are forced to shut down

    0Reply
  • Ken Latchers
    Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes
    6y

    agree with the above. You can't fly under the radar anymore. Skirting the law, skirting an HOA, ignoring the concerns of neighbors, is a recipe for disaster at an inopportune time.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free