When you are a property owner, you need to keep a checklist of several things – especially the maintenance issues.So, if you have multiple properties, the work becomes tenfold. While it might sound tedious, if you maintain your properties better, you can always earn a decent amount through rentals. One of the best business opportunities for multiple property owners is a short-term rental. Even if you are looking for a subsidiary income or just looking for some extra money to maintain your property, a short-term rental is a great option.
According to a Technavio report, the global vacation rental market will see a growth rate of 7% by 2022. The estimated growth value is USD 57.1 billion. However, with the rapid growth of short-term vacation rentals, the regulations have also become stringent. This means, today, as a property owner, you need to follow more rules, and keep certain things in mind, while renting your property. The legal implications of owning and renting a property are something that a property owner needs to keep in mind. Here are some of the common rules that you'll have to keep in mind.
The key point you need to keep in mind is the duration of the stay. It might sound straightforward when you hear the term 'short term vacation rentals', but it's not so. Certain cities or countries only allow you to rent a part of the property, while others set the limit on the number of days. For example in Charleston, USA, the length of stay for guests is less than 30 days.
So, before you delve into the market, you need to know the local laws. For certain cities, travel trailers or RVs cannot be used for short term rentals. Your city might also need you to stay on property so that you cannot rent out the whole property. In the end, it all boils down to local laws.
#2: Legal Restrictions
The local laws vary from state to state, and so does the scenario of vacation rentals. Some cities prohibit short-term rentals and allow only hotels to operate in the area. For example, in San Diego, short-term rentals are not allowed.
On the other hand, certain cities and tourist destinations have a cap on the number of short-term vacation rentals. Additionally, some cities might also put a cap on the number of days for rentals. For example, New York City has one of the strictest laws to help promote the natural lifestyle of the residents.
#3: Permits & Licenses
If you are planning to let one of your properties as a vacation rental, then you need to have a business permit. Additionally, depending on your location, you will also need a short term rental license. Your property should also have the basic amenities and safety equipment installed – like a smoke detector or fire extinguisher). You should also comply with local laws that state that you need to inform your neighbors about letting the property for short-term residents.
#4: Verification Laws
Some countries have strict guidelines for allowing guests to stay in your property. In this case, you are required to collect all the information about the guests you host. So, make sure to check out if your local laws require you to collect ID cards and pictures of your guests.
Also, if you are renting in a densely populated area, you need to make sure that all your licenses are updated. This is because all it takes is a complaint from an irritated neighbor to create a ruckus.
Lastly, you need to check the property taxes and always pay them on time. This is especially true if you are renting out your property. The regulation compliance also includes your taxes, so if you fail to pay them, you run the risk of a closed business.
If you are uncertain as to how to file taxes or are confused about the calculation, you can always consult a certified professional, who will do the calculations on your behalf. This way, you are safe from the hassles of tax calculation and payment.
Just like the short-term rental market is changing, so are the rules. However, the vacation rental market has a lot of potential. So, if you are trying to make use of your properties, you can definitely start renting your properties.
Do you need help with managing your properties? Feel free to reach out to us. We at Airhosted will help you to develop a subsidiary income from your unused property! All you need to do is contact us.