How To Get Around Short-Term Rental Restrictions?

Airbnb, Vrbo, Booking.com, and many other OTA platforms have made it a lot easier to rent out properties on a short-term basis and earn extra income.

However, many city laws, homeowners’ associations (HOAs), and landlords have certain rules and restrictions for short-term rental that make it difficult to do.

For example, some places ban renting properties for the short term, and some put strict limits.

Do you want to rent out your property for short stays successfully? If so, you should understand these restrictions and find ways to work around them legally. 

Read on to learn smart and legal ways to handle short-term rental restrictions!

What Are Short-Term Rental Restrictions?

Short-term rental restrictions are rules local government and homeowner associations (HOAs) set to control how properties can be rented for short stays.

These rules can vary depending on where your property is located.

These can limit the number of days a property can be rented out, require special permits, or completely ban short-term rentals in certain areas. Some places also have guest limits, noise regulations, and tax requirements.

Why Do These Restrictions Exist?

Homeowners’ associations (HOAs) and local governments have these rules to protect residents from noise, overcrowding, and special events that short-term guests can bring. 

For your information, special events can be parties, weddings, corporate gatherings, or other similar events. After all, they don’t want an Airbnb property to disrupt the neighborhood. 

In addition, if too many homes in an area are used as STRs, permanent residents feel displaced as they no longer recognize their neighbors.

Zoning laws ensure such areas remain residential and are not overrun by short-term rentals.

These rules also oversee the number of guests that can stay at a property to not put too much strain on local services, like waste disposal, parking, and septic systems.

How to Bypass Short-Term Rental Restrictions?

In short, set up yourself as a business.

Many landlords and cities have strict rules for individuals to rent properties for short stays. 

Instead of operating as an individual, you can set yourself up as a business and start renting out the properties. Please note you have to be a ‘real’ business here. 

What it means is that you should get that LLC, S corp, or C corp (or whatever it is in your state) to show yourself a company. 

You should also get a real EIN (Employer Identification Number) to be a legitimate entity. 

Then, when you go to a property owner, a seller, or an apartment complex, you can rent the property under the name of your business/company.

A business is not an individual, so it is not considered a tenant in the traditional sense. You can legally operate short-term rentals in areas where individual subletting is restricted.

Pro Tip! Present Your As a Business, Always

When leasing a property from a property owner or manager to sublet it, you should be careful what you say and must not reveal your plan. 

For example, no need to say, “Hey, yeah, I’m going to rent this property and then put it on Airbnb.” That’s a big mistake. Do not tell them that.

You want to say things like, “I have a corporation. I have corporate clients that stay here. I have travelers that come here.”

Remember, if someone contracts to stay on your property with your business, They’re your guests and clients. Now, your relationship with the owner or the property manager is separate.

Many landlords and property managers don’t like short-term rentals because they worry about noise, damage, or other tenant complaints.

Most online rental platforms don’t ask if you own the property. They only care that you have the legal right to host guests. You can operate legally and smoothly if you set up your business correctly.

Conclusion

Dealing with short-term rental restrictions can be tricky, but you can do it legally.

First, learn about the local rules and HOA policies in your area. Set up a business, like an LLC, as it helps because businesses have different rules than individuals.

When talking to landlords, don’t mention Airbnb or short-term rentals directly. Instead, say you have corporate clients or travelers.

Most rental platforms don’t check if you own the property, but they need you to have the right to rent out the property legally.