Hosting a short-term, medium term or long-term rental or home exchange is a great way to meet other Minds on the Move and explore destinations worldwide. The first thing to consider when you start on this adventure is to know what rules to follow. You will need to familiarize yourself with your city’s unique regulations.
Many cities in the United States and abroad have enacted strict laws governing short-term housing in residential zones. Because regulations can change often and are unique from city-to-city, you will need to be diligent to avoid potentially costly fines. The last thing you want is to be slapped with unexpected penalties! No need to fear – if you take some simple steps and stay informed, both hosts and tenants can have a stress-free homestay, allowing you to focus on the things that matter: your sabbatical, travel, or retreat. Here are some things to look into:
Zoning Laws and Regulations
Before you begin renting, check with your county and city about the zoning requirements for short-term rental properties. Many cities have moved to a minimum of 30 days. You should check not only on the current zoning status of the area where your home is, but also any proposed changes that may affect your home. Be sure to check if these regulations are applicable to home exchanges, house sitting or home sharing situations as well.
Remember to always check your sources for accuracy and defer to the official city government website or personnel whenever possible. When contacting government personnel by telephone, be sure to note the full name of the person(s) you speak with as well as their title and contact information, for future reference.
For example, an official German website lists the current rental regulations in Berlin, including permit requirements for home swaps. In the United States, Nolo is a helpful legal resource with links to help you understand regulations in your area.
Homeowners Association Rules
Are you part of a Homeowners Association? If so, your Homeowners Association may also have rules regarding rentals within your complex or subdivision. Typically these rules are found in your CC&Rs (Covenants, Conditions & restrictions).
Business Licenses and Permits
Many areas require “vacation” rental owners to apply for a business license or permit to rent homes on a short-term basis.
In some markets, vacation rental homes have to follow the same basic safety requirements as long-term rentals (sprinkler systems, fire extinguishers, deadbolt locks, etc.) and may also be required to complete safety inspections.
Local Health Code Regulations
Some areas also have specific rules and regulations around health codes. The most common areas of regulation involve well water testing, and pool and spa maintenance.
Income collected from your rental is taxable and should be included when you file your tax return. SabbaticalHomes.com does not act as an intermediary with any financial handling and will not provide any tax documentation to the IRS or to its users. We don’t collect your financial information. We trust that you will keep good records and seek tax advice.
Some areas require rental owners to collect and remit transient occupancy taxes from travelers. Be sure to check with your tax professional as to any applicable tax laws and how it may affect your particular situation.
Understand the risks
Before you post a listing, understand that being unaware of your city’s current rules can possibly lead to costly fines. Each city varies in its policies and enforcement of its rental regulations. Depending on the city, these fines can range from as little as a warning with a minimal fee to potentially thousands of dollars in penalties.
Knowledge is your friend and partner. With a little bit of research and good judgement, you can comply with local rules and regulations affecting short-term rentals and be ready to start your adventure with peace of mind.