When starting an Airbnb, one of the important steps is looking into the laws your city, county, and/or state might have. Making an Air BNB legal and following regulations is important! The last thing you want is to start a business of renting out your house as a short term rental after setting it up, & then have it shut down because you aren’t following the local regulations.
Note, I’m not providing legal advice. But I will share my experience and some things you may want to consider. I’m hoping it’ll help give a good start in finding what laws apply to your rental.
why are there regulations for Air BNBs?
I had to do a bunch of things to my house to get it to pass an inspection. I thought I’d share pictures and the graphics I made for it.
As time goes on and as the short term vacation rental market grows, it’ll be likely that regulations will grow. Why? Since governments collect taxes, they notice how much money is made by hosts and want to get a percentage. And with licenses and inspections- there’s more ways to make money.
Also, hotels have to abide by restrictions and so they want short term rentals to have to pay the same taxes and follow the same restrictions. So they push for it.
Then, there’s the local communities- they put pressure on their city’s government to have more restrictions so that there’s less rentals in their neighborhood. Short term rentals can be loud with parties and, understandably, locals want to keep the feeling of a community which can be hard with lots of Air BNBs.
So all that equals- more regulations! I don’t want to sound like a downer, but since they exist, might as well figure out how to follow them.
making an Air BNB legal and following regulations
The first thing I’d suggest to do is to look up the local city’s regulations. Google “short term rental in…” with the city name. Or, Air BNB has a list of local regulations in the US here. Though my city isn’t listed there so it’s not inclusive. Below is a list of things you might have to follow. Though you might get lucky and not have any regulations you have to follow (besides taxes).
Note, on my city’s website they had paperwork to fill out. On it was a long list of everything I needed to follow. It worked best for me to work my way down the list. For example, I needed a business license (the first item on the list) to get the next item on the list.
Many jurisdictions require Air BNB owners to get certain business licenses. The exact type will differ across locations.
In my state, Florida, my rental has a license as a Transient Public Lodging Establishment which cost $140 and expires every December.
In my city, Hollywood, my rental has a vacation rental license which cost $500 and then costs $25 to renew yearly.
Most cities require that hosts collect taxes for each overnight stay. The beauty of Airbnb is that for most locations, they automatically collect and remit these taxes for the hosts which is very convenient. Air BNB has more information on Taxes here.
For my county (Broward County) I also needed a local business tax receipt. That cost $40 for me to obtain.
For my city, I needed an additional local city business tax receipt. That cost $86 for me to obtain.
Local governments may have regulations with standards to ensure safety. To make sure these are followed, a building inspection may be required.
My city has a long list of items they check. I had to add many things to my house that surprised me. I thought I’d share a few-
- A sign on the front door with lots of information including the location of the nearest hospital, a sketch of the off-street parking spaces, and the days and times of trash pick-up
- A sign in the backyard that unreasonable loud noise is prohibited
- A building evacuation map is posted
- There is a working landline in the unit
- Exit signs on all doors
- Hard wired smoke detector and carbon monoxide detector with a permit on record
The inspection cost $225. If I failed, I would have to pay $50 for a second inspection.
To get my smoke and CO detectors hardwired plus the permit cost $850.
fire evacuation sign
Next, you’ll want to look up zoning rules. This is important since there’s laws that say how a home can be used. A county website usually has a way to look these up.
Our home is zoned as a single family district. I had to look up that information for my vacation rental license paperwork. This zoning meant that I can’t host more than 10 occupants at a time. Which is fine since I have a two bedroom house.
landlord- tenant laws
If hosting longer stays (usually 30 days or older), you might legally have to follow landlord-tenant laws. These laws may protect a tenant against eviction so make sure to look into these landlord tenant laws if you accept long term guests.
If you’re renting out a condo or have an HOA, you’ll want to check with the rules the development might have on Air BNBs. There might also be rules to look into if you have rent controlled or stabilized housing.
Our first house was a condo and we planned on renting it out as an Air BNB. A month before we were going to list it, the HOA voted to not allow short term rentals. Because of this, we ended up selling that home. So yeah, check on those HOA rules.
interior sketch needed for my business license
It cost me about $2000 to get my Air BNB set up legally with my city, county, and state. That’s so much money! And there’s yearly fees I need to pay to keep it current. Speaking with an investment in mind, it takes a long time to make up for that with nightly rentals.
Honestly, it was a major pain to get the correct licenses. I’d suggest starting 2 months before you’d want to rent out the home if the regulations in your area are as complicated.
I spent 1-3 hours a day for 2-3 weeks working on getting my paperwork complete. Give yourself plenty of time because sometimes it takes a week or two to get a license that you need for everything else they require.
There was a major learning curve. I didn’t know what many of the requirements meant. For example, instead of a business license with the state, they call it an “active license as a Transient Public Lodging Establishment with the Florida Department of Business and professional Regulation.”
With pages and pages of terms I wasn’t familiar with, it took time to understand everything.
why do you think it’s so complicated?
I really think that some cities make it as complicated as possible to discourage local Air BNB’s.
Besides what I listed above, I had to have an interior sketch of my house and an exterior one as well. The state licensing number has to be on my listing. I have to have a contact person that could be to the property within an hour. There’s extra rules if I have a pool. It goes on and on.
BUT- my Air BNB is legal! I jumped through all the hoops!
Part of the reason I think it is so tricky is the community I’m in has an association that is very vocal about their hate for short term rentals. They want to push the city to make them illegal in residential zoning areas. Their reason is that there’s extra trash behind the houses, noise, and don’t want businesses in their neighborhoods.
It makes me sad that Air BNBs aren’t fully embraced by communities. My city has restrictions on how many can be in one acre so they don’t take over a neighborhood. There are so many good sides to them too! They help the local economy with taxes, fees, and bring people in who spend money with companies in the area.
We employee a women owned cleaning company as well as a local landscaping company. Our home and yard has been improved to attract visitors. Travelers want options with where they stay and short term rentals provide that.
Anyway, I hope that sharing my experience with making an Air BNB legal was helpful and not discouraging. If you break the steps into daily tasks, it’s doable, I promise. And it’s so great to host guests! Plus it’s a nice way to make income.
If you’re interested, here’s a link to my Logan, Utah rental Fairview Cottage (which has barely any regulations at the time of writing this), and here’s a link to my Hollywood, Florida Pink Palm Hideaway rental.
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