Should I rent my Tampa house or sell it? What if I want to turn it into a short-term rental, like AirBnB or VRBO?
There may be challenges for some Airbnb owners transitioning to rental properties. A Realtor.com survey shows many sellers would consider renting out their homes instead of selling them. However, understand the responsibilities of being a landlord before making that decision.
Other factors are also at work. Newer regulations on short-term rentals now exist in different cities, such as New York City and Phoenix. You must understand local restrictions before buying or converting a property into a short-term rental. In the Tampa Bay area, ongoing changes in, for example, Indian Rocks Beach, are still evolving -seek assistance from knowledgeable agents. Let’s dig into the details!
There’s been a myth that’s going around, which is Airbnb is probably going to go out of business, or VRBO is going to crash the housing market because so many of these properties are coming onto the market. Well, that’s not exactly true.
There was a viral tweet that went out earlier this year that did get a good amount of recognition. It turned out the data to explain the situation wasn’t all that accurate. And the Airbnb situation is not as bad as what people were saying a couple of months ago. That said, there might be a challenge for some Airbnb owners to jump into a rental property instead of getting the property sold.
Run your short term rental as a business.
It can be a lot easier to sell the property than to become a landlord. Renting a house out isn’t always the best idea. There was a Realtor.com survey that showed that 59.8% of sellers who are selling their house would consider renting out their current house rather than sell it if they were still able to buy or rent another home in the future. So six out of 10 say, “Yeah, I’d consider renting my house as a short-term rental”.
About 20% said it would be great to have the extra income from a renter- because who doesn’t like extra income, right? About 18% said owning a rental investment property appeals to them. So there are people now thinking about selling their house who are thinking, you know what? I don’t really want to lose that 3% interest rate that I’ve got on the house.
Now, speaking from experience, if you’ve never been a landlord, being a landlord is a business, and I highly recommend that you understand it from a business perspective. If you are considering Airbnb-ing it, which a lot of people do, the Airbnb situation across the country is in a little bit of flux.
Short-Term Rentals in New York City
There are a lot of cities across the country right now that are putting extra restrictions on Airbnbs or trying to curtail the amount and lessen the number that are in the city already.
Let’s give you a couple of examples and then we’ll talk about what’s happening locally. New York City came out with New York City, Law 18, They put major restrictions on short term rentals such as Airbnb’s. What was the impact of that? Well, on June 4 of this year, there were 22,500 short-term rental listings in New York City, Airbnb’s VRBOs, whatever the case. That number fell to 4,600 after the law was passed. I mean, that’s a huge difference. That means about 17,000 people in that area were renting their house out as a short-term rental that, for whatever reason, can no longer do that.
Now, they might be able to rent it as a long-term rental still, but if they planned to do it as a short-term rental, get the extra income because we know there’s a decent amount of income there in the vacation world, maybe they were just going to rent it out two months of the summer and live there the other month of the summer. Well, if they’re going to rent it year-round, then they can’t do that. They can’t live there for one summer month if it’s on an annual lease. So it’s put a lot of people in flux, and for some of them, it’s time to cash in.
Now, it’s not just cities like New York saying this; it’s like, all right, we’re going to put major restrictions.
Short-term Rentals in Arizona
Some cities have done the absolute opposite. The flip side, for example, Phoenix. In 2016, Arizona passed a law that bans all of its cities and towns from capping the number of short-term rentals, and that’s had an impact too. So they went the other way, and said, look, you guys can have as many short-term rentals as you want. An individual city or an individual municipality can’t stop it, or put a limit on it.
At the start of 2023, Phoenix had over 20,000 short-term rental units, and that competition has led to many of them sitting empty for weeks at a time. So those are big numbers. So that’s kind of some of what we’re seeing in cities around the country, where they’re either restricting (or not!) what you can do, and that’s causing more and more people to put their house up there, especially in Phoenix making each house is making less money.
Short-term rentals in Tampa Bay
So what’s happening locally? After a lot of growth in this sector in the Tampa Bay area, many municipalities locally have already restricted short-term rentals, and some of the remaining ones are revisiting the situation and putting new restrictions in place. So the best time to understand whether you can Airbnb or short-term rental your property is BEFORE you buy it, if that’s your intention.
The next best time, if you already own it, is to understand it before you start taking steps towards making it that “Beautiful Escape”, that you might not be able to rent as a short-term rental. For example, in Indian Rock Beach, ongoing changes are happening there. It’s one of the few remaining short-term rental locations in Tampa Bay.
Make sure that you’re talking to an agent that’s prepared to help you through that process. And a lot of people right now have questions, so do feel free to reach out. Reach out if there’s anything that we can help you with, and we’ll see you in the next video.
