Renting In-Law unit on AirBNB?

5 Replies

My wife and I are looking at purchasing a multi-unit in the Jefferson Park neighborhood of Chicago. We would owner-occupy and rent out other units. There’s a two-flat we’re currently interested in that has a finished one-bedroom basement with a private entrance, full bath, electricity & gas line to add kitchenette. There was clearly a kitchen there before it was renovated. We were contemplating the idea of adding back the kitchen and renting it out on AirBNB since it clearly isn’t eligible for long-term traditional rental as it’s not a legal unit; the ceilings are too low (77 inches high) and there’s only one exit (among a few other things).

Would AirBNB be a legitimate option for a unit like this? It seems like others are doing it but I wanted to get feedback about the risks. Since it’s not a legally recognized dwelling unit, would we have to list it as a “Private Room” instead of an “Entire Apartment”? We would want to contain the guests to the basement as the 1st floor would be occupied by tenants. 

Hi Phil, it seems like Airbnb may be a feasible option for your basement/garden unit. 

  • Being owner-occupied, makes you compliant with the city. 
  • If it is it's own private entrance and private space with bathroom/kitchen, you can list it as an entire apartment. 
  • The closer you are to the Blue line, the better you are because many business travelers who stay at Airbnbs in Jefferson Park are coming from O'hare

The risks you have are the initial upfront costs of renovation and furnishing the unit. Also, if you market it poorly, gives guests a poor experience, or price it poorly, you will likely not get the returns you are looking for. Otherwise, it is worth an experiment with the unit as the airbnb market continues to grow in Chicago.

If you have any more specific concerns or questions, you can pm me. Cheers! 

Originally posted by @Phil Janasac :

My wife and I are looking at purchasing a multi-unit in the Jefferson Park neighborhood of Chicago. We would owner-occupy and rent out other units. There’s a two-flat we’re currently interested in that has a finished one-bedroom basement with a private entrance, full bath, electricity & gas line to add kitchenette. There was clearly a kitchen there before it was renovated. We were contemplating the idea of adding back the kitchen and renting it out on AirBNB since it clearly isn’t eligible for long-term traditional rental as it’s not a legal unit; the ceilings are too low (77 inches high) and there’s only one exit (among a few other things).

Would AirBNB be a legitimate option for a unit like this? It seems like others are doing it but I wanted to get feedback about the risks. Since it’s not a legally recognized dwelling unit, would we have to list it as a “Private Room” instead of an “Entire Apartment”? We would want to contain the guests to the basement as the 1st floor would be occupied by tenants. 

 Just FYI - there are tens of thousands of non-compliant garden units being rented out across the city.  

If it's not legal for tenancy, it's really not legal for short-term rentals either for the same reasons.

Thanks for the feedback everyone! Really appreciated. It seems like it can be done. The ordinance says it checks "zoning compliance" during registration and whether or not it's in a restricted residential zone (which my property of interest is not in...for now) so I suppose there's always a risk of losing future eligibility. 

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