Thinking of Short-Term Renting Your Home? Here’s What You Need to Know First

Answer

Renting out your home short-term—whether for vacation stays, business travelers, or temporary relocations—can generate valuable income. But in the U.S., short-term rentals are heavily regulated and vary widely by city, county, and even by HOA rules. To do it legally and successfully, homeowners must understand local laws, platform requirements, tax obligations, and property management considerations.

Short-term rentals typically refer to rentals under 30 days, often listed through platforms like Airbnb, Vrbo, or Booking.com. While demand for short-term stays is high in many markets, not all properties—or locations—qualify without proper licensing.

Here’s what you should consider before listing your home:

• Check local laws and zoning restrictions: Many cities require short-term rental permits or registrations. Some municipalities limit how many days per year you can rent, restrict rentals to owner-occupied properties, or ban them entirely in certain zones.
• Verify HOA or condo rules: If your property is within a homeowners association or condominium, internal bylaws may prohibit or restrict short-term rentals, even if local laws allow them.
• Obtain necessary permits and business licenses: Cities like Los Angeles, Austin, and New York often require short-term rental operators to register and display permit numbers on listings. Operating without a permit may result in fines.
• Ensure proper insurance coverage: Standard homeowners insurance may not cover short-term rental activity. Specialized landlord or short-term rental insurance is often needed to protect against guest damage or liability claims.
• Understand platform rules and taxes: Platforms like Airbnb may collect occupancy taxes on your behalf in some jurisdictions—but not all. You may also need to collect local lodging taxes, file quarterly tax returns, or report income to the IRS. Learn more at IRS.gov.
• Prepare the property: Short-term rentals require fully furnished, clean, and guest-ready spaces. You'll also need to manage key handoffs, cleaning between guests, and ongoing guest communication—or hire a property manager to handle these tasks.

Short-term renting can be rewarding, but it's not passive income. Compliance, guest expectations, and operational logistics require careful planning and ongoing attention.

Before listing your home for short-term rent, it's advisable to research your local laws thoroughly and consult a licensed real estate attorney or property manager familiar with short-term rental compliance in your area.