If you’re a homeowner ready to move, you may be considering using your current house as a short-term rental property instead of selling it. A short-term rental (STR) is typically offered as an alternative to a hotel, an investment that has recently gained popularity. According to a Harris Poll survey, 28% of homeowners have temporarily considered using a rental service to rent out their homes for additional income.
New York State Short-term Rental Definition
New York State defines short-term rentals as the renting of dwellings for less than 30 consecutive days. However, for tax purposes, they are defined as stays of fewer than 90 consecutive days. The primary law which regulates New York short-term rentals at the state level is the New York State Multiple Dwelling Law. The New York Gov site states that staying in the know about illegal short-term rentals can protect your rights and keep you on the safe side of the law. This includes “whether you’re a property owner or building manager, a tenant or neighbor, or a visiting tourist, Submit a complaint
Are you violating short-term rental restrictions and in jeopardy of receiving a fine or legal action from your landlord? Read the following restrictions outlined in the NYS Multiple Dwelling Law, the NYC Administrative Code, and the New York City Zoning Resolution to find out.
New York Information for Hosts
Did you know:
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- You cannot rent out an entire apartment or home to visitors for less than 30 days, even if you own or live in the building.
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- You must be present during your guests’ stay if it is for less than 30 days.
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- You may have up to two paying guests staying in your household for fewer than 30 days only if every guest has free and unobstructed access to every room and each exit within the apartment.
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- Internal doors cannot have key locks that allow guests to leave and lock their rooms behind them. All occupants need to maintain a common household. This means, among other things, that every member of the family and all guests have access to all parts of the dwelling unit. Internal doors with such key locks create barriers to escaping in an emergency and may result in a temporary vacate order issuance.
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- Under the NYC Administrative Code, property owners are responsible for ensuring their properties are maintained in a safe and code-compliant manner at all times. Property owners can and will be issued the violation for any illegal short-term rentals at their property — even if tenants conduct it.
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- New York State law also prohibits advertising an apartment in a Class A multiple dwelling, generally a building with three or more permanent residential units, for rent for any period of less than 30 days. Fines for doing so range from $1,000 to $7,500 and will be issued to the person responsible for the advertisement.
Additionally, owning a short-term rental can be tempting, but you may find the responsibility of being responsible for one difficult. Here are some challenges you could face if you rent out your house instead of selling it.
A Short-Term Rental Comes with Responsibilities
Successfully owning and renting a house takes work. Think through your ability to make that commitment, especially if you plan to use a platform that advertises your rental listing. Most of them have specific requirements hosts have to meet, and it takes a lot of work. A recent article from Bankrate explains:
“Managing a rental property can be time-consuming and challenging. Are you handy and able to make some repairs yourself? If not, do you have a network of affordable contractors you can reach out to in a pinch? Consider whether you want to take on the added responsibility of being a landlord, which means screening tenants and fielding issues, among other responsibilities, or paying for a third party to take care of things instead.”
There is also the upfront time and cost of owning a short-term rental. Some risks could come up for you in the future. Investopedia warns:
“Risks of hosting include renting your place to rude guests, theft or damaged property, complaints from neighbors, and potential regulatory violations depending on your location.”
Before taking the leap and converting your house into a short-term rental, there’s much to consider. If you aren’t ready for the work it takes, it could be wiser to sell instead.
Your House May Not Be Ideal for Your Rental Goals
Not every house ends up being a profitable short-term rental, either. One of the most significant factors is where your home is located. The less likely your neighborhood is to be a travel destination. You should expect fewer requests from potential renters, which impacts your bottom line. An article from the National Association of Realtors (NAR) advises:
“When it comes to the viability of profitable STRs . . . consider factors like location, amenities, and whether the property is appealing. Most people seek STRs in locations where they vacation, so proximity to attractions is important. Likewise, the property should cater to a variety of travelers.”
It’s wise to do your homework and learn how much rentals in your area go for. How much business do they get throughout the year, and how this compares to your goals?
Key Takeaway
Converting your home into a short-term rental isn’t a decision you should make lightly. It’s prudent to research state and local laws, time, and challenges. As well as the financial return. Let’s connect today to decide if selling your house is a better alternative.
Other educational articles about the market and your home search are under Karen’s Blog.
