Rental and AirBnB in SFH?

Question

Is it possible (legal) to make SFH a long term rental (12 month lease plus) while having a finished and separate mother in law suite or a finished  basement an Airbnb? or sense those are two units I am operating a MFH in a SFH which my zoning peeps wont like too much. Curious on your thoughts?

-Context, I would obviously have utilities included in the long term unit and wouldn't be "converting" SFH into anything more than closing off a door way or hallway...no need to  be getting permits for new electrical/plumbing/new structure.

-Would love thoughts on this type of idea and any logistic or legal concerns or advice you have from your POV BP, THANKS!

James Carlson · Answer

@Bryan Cavellier

Like @Evan Polaski, I am not a lawyer or even local to your area. That said ...

We know the laws here in Denver. If you're zoned single unit here in Denver, then you can live in one unit and rent the other. That separate space is considered, under this scenario, accessory to the primary use of the land.

But as soon as you move out, you can't rent out two separate spaces to separate parties. Now there does appear to be a kind of loophole that hasn't been tested by any court cases yet, and it's where you rent the "whole house" to one long-term tenant and allow in the lease those tenants to sublease out a portion of their house. How you share the revenues of that sublease is between you two. Maybe you've offered a decent rent to the LTRer so that you keep most or all of the Airbnb money. I have some Denver clients who do this successfully, but -- as I told them when buying -- this is a gray area that appears to circumvent the intent of the law.

Again, talk with a lawyer or other local expert in your area. I wish you luck!

Evan Polaski · Answer

@Bryan Cavellier, Disclaimer I am not an attorney, and you really need to consult with one regarding the laws in your area.

At first blush, I would think this is illegal.  If utilities are not split, you are asking your tenant to foot the bill for increased water, gas and electric usage.  There is also typically access laws regarding rentals, meaning you as LL cannot just walk through a house you have a tenant in unannounced and outside of emergency issues, and this extends to people you invite onto the property, i.e. contractors or in this case Airbnb guests.

If it is not illegal, then it just becomes clearly communicating with potential tenants and Airbnb guests, so the Airbnb guests are not trying to walk into the front door of the LTR.  And making sure the potential tenants know you are Airbnb'ing the other side of the wall.

Again, this is a question for a real estate attorney, as you are essentially setting up a multifamily property, without setting up a mulifamily property.