THIS is the Biggest Risk to Airbnb Owners Today

Two words: regulatory risk. We won’t keep you scrolling, it’s important to point this out early on in the post so that you can understand more about how you can manage regulatory risk.

The popularity of Airbnbs means that towns have been more diligent about putting rules in place when it comes to managing short term rentals in their municipalities. For example, larger cities like Boston, San Francisco and New York City have either severely restricted or banned STRs altogether. 

So, how can you handle this regulatory risk? 

One option is to invest in areas that have been traditional vacation destinations. (Think: Hampton Beach, Myrtle Beach, southwest Florida). In these markets, while there is always going to be a risk of restrictions, their economies greatly depend on people visiting; i.e. tourism. A lot of the businesses are seasonal in areas like this and they see the greatest influx of visitors in the nicer months and need to capitalize on these periods. Generally speaking, for this reason, vacation destinations tend to have less regulatory risk than larger cities or towns.

If a town does ban STRs, what can you do with your property? It may not be as hard as you think. Transition your property from a furnished short term rental into a furnished midterm rental. There is a vast pool of renters often looking for a place to call home for longer than a week, but shorter than a year. This includes people who are doing renovations on their homes, those going through a transition (a divorce or relocating for work), and traveling nurses to name a few.

We know this can seem overwhelming, so you might be weighing your options about how to best move forward with your property. Is it time to start thinking about hiring a property manager? Here’s our advice:

If your goal is to make as much money as possible, then we recommend self-managing your property. BUT, and this is a big but, do know it’s a full-time job. You have to build systems, establish a team, manage the entire rental operation, handle cleaning and maintenance, and be readily available for guest communication. 

If your goal is to build a portfolio of passive real estate properties, then we suggest hiring a local, reliable and skilled property manager. This investment will help you to make more money in the long run so that you can invest your time into focusing on other ventures, like identifying your next real estate investment. (How many times is too many times to say an iteration of ‘invest’ in one sentence? Anyway, you get the gist.)

Let us know what kinds of questions or concerns you have about your short term rental when it comes to regulatory risk. We’re here to help!