The short-term rental market is one of the hottest segments in real estate and property management
3. Restrictions – A new risk to short-term rental owners is the possibility of rental restrictions. New York City, Chicago and many other cities are introducing laws that ban or put special restrictions on rentals under 30 days. Increased noise and traffic, growth in dicey quasi hotels and negative impacts to limited housing supplies are all reasons for the restrictions.
These restrictions are putting a major roadblock in the way of the fast-growing short-term rental market. And it should be a serious consideration if you’re thinking about running your own. After all, you don’t want to get stuck with an illegal investment, now or in the future. So plan ahead, and do your due diligence. Be sure to identify municipal or neighborhood proposals to restrict short-term rentals.
4. Community Risks – In addition to your business risks, short-term rentals may pose risks to your community. Crime is the most obvious and most often discussed. Short-term rentals have received negative media attention this year as a few properties were ransacked by tenants. Traffic, parking and noise are other problems that have many neighborhoods balking at the idea of converting more properties into short-term rentals. Finally, there are also less obvious risks. Short-term rentals may:
- Reduce the housing available for locals
- Dilute neighborhood culture and characteristics
- Create unfair competition to the hotel industry
So don’t forget to review and address community risks. You already have enough business challenges to manage; you won’t want your neighbors and city gunning for you too.
Tags: Condo & HOA Vacation and Rental Property, Tenant Screening