Air BnB Rules & The Law

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Utilizing Air BnBs is the trendy new way to experience travel around the world. Giving tourists the ability to rent a condo or house in the city of the dreams not only lets them come and experience a new environment, but it also lets them live like the locals. It’s no surprise that regular tourists and influencers alike have hopped on this trendy way to stay.

With Air BnB travel on the rise, you may be considering purchasing an investment property or utilizing a property you already have as an Air BnB. It seems like a simple and easy way to make money.

While that is generally true, it’s important to know that there are laws and rules in place that need to be looked at before jumping into your new business venture.

Find Your Property

While any home or condo can work as an Air BnB, not everyone is going to want to stay in an area off the beaten path. Most people visiting cities want to stay in the heart of the action and really get to experience everything that your city has to offer.

When purchasing a property to use as a vacation rental, you should consider the following:

  • Is the area generally safe?
  • Are there tourist attractions nearby?
  • Is public transportation readily available?
  • Is there on-site parking?

Once you’ve established the area you are comfortable purchasing your vacation rental in, you should consult a real estate lawyer. A real estate lawyer can help you navigate your purchase with your lender and also make sure that the property you are purchasing has all of the necessary requirements to act as an Air BnB.

A real estate lawyer is particularly important when you are purchasing property that you intend to use as a rental. The sales agreement is different than a regular residential contract and so are the laws. Having a lawyer look over everything in detail before you sign can save you headaches in the end. They are going to make sure that the deal has your best interest in mind and that nothing is being swept under the rug that will ultimately cost you more money later.

A lawyer is also going to be able to read a condo association or home owners association bylaws and determine if your property will be able to be used as an Air BnB.

The Difference in a Rental Unit and Air BnB

In some areas a property that is being used as an Air BnB is treated differently than a property you are purchasing to use as a regular 12-month, single family rental. Usually this is not the case if you are purchasing a single-family home but is more common in condos and townhouses.

One of the main reasons condos and townhouses are more likely to have a different set of rules is because they are governed by condo associations. These associations can enforce rules that are unique to their locations

What we are seeing is that some condo associations are stating that an Air BnB property is being run more like a hotel, rather than a standard rental. Therefore, it is against their policies to operate these kind of businesses within the condominium complex.

While condo association bylaws are not the law, there are still serious consequences if you were to go against them and get caught. These can range in severity from being banned from using community features, such as pools, rooms, and exercise facilities, to fines, and ultimately liens being placed against the property. Regardless of the severity, it is never a good idea to go up against your condo or home-owners association.

Because no two associations have the exact same rules, it is important to stay up to date with local legislation. The laws are not established directly against Air BnB and other short-term rental properties, either. There does not have to be a clause in your agreement that states you won’t use the unit for short-term rentals. The association is also able to ban the use of your property for short-term rentals if there is anything in your agreement that states you cannot operate a business out of your unit.

The real fact of the matter is that Air BnB guests are not considered to be renters in any fashion. The government considers that type of rental to be more of a commercial transaction and the unit to be operated like a hotel. This is what allows condo associations to outright ban the use of the condo as an Air BnB.

Lucrative If Allowed

If you live in a great area for tourism, running an Air BnB can be quite lucrative. If you have all of the characteristics in your property that make it desireable, it is very likely that you will have it booked more often than not. This means that you could potentially pay your mortgage with one week of booking and have the rest of the month be pure profit.

Because this can be such a great business venture, it is essential that you know that everything you are doing is legal before taking it on. Using a qualified and trustworthy lawyer to check over all of the pre-purchasing documents and home or condo association bylaws can save you a lot of headaches, time, and most importantly money. There is nothing more frustrating than having everything ready to go only to find out that your complex doesn’t allow you to run this type of business.

Purchase, Decorate, and Go!

Once the property is purchased and ready to go comes the fun part – getting ready to turn it into an Air BnB. Great properties have all of the necessities of home in their rental, so they must be fully furnished and equipped with all necessary kitchenware and anything else you would find at home.

When your property is furnished and fully equipped, all that’s left to do is to list it for rent and watch the bookings roll in!

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