Many of our clients ask us a lot of questions about short term rentals. They wonder if they should get into what they think is a lucrative short term rental market rather than keeping their properties as long term rentals.
Higher Expenses with Short Term Rentals
The short answer is: probably not. The expenses involved with short term rentals are much higher and you have to pay an 11 or 12 percent bed tax, depending on the city or county that your property is located in. Your management fees will be around 20 percent, and you’ll have to pay for furnishings. That can be expensive because people expect nice furniture in a short term rental. The utilities also have to be paid by you and you’ll need to keep up with regular cleaning. All in all, if you’re not getting more than double what you would get for your long term rental, it’s probably not worth it.
City Laws and Zoning
Beyond the additional costs that are included in short term rentals; the city of Santa Barbara is cracking down on properties that are rented out in the short term. Homes that aren’t zoned for short term rental business are under more scrutiny. After 2016, the city will aggressively police that market. They have hired staff and will call on rental ads that offer properties for the short term. If you are advertising such a property but you’re not within the zone for short term rentals, you will find yourself in the middle of a sting operation. They can fine you $10,000. This is really not worth the risk. A lot of this legal effort is put forth by the hotel lobby, which is trying to end the competition for the hotel business in town. Look into it closely if you’re thinking about doing a short term rental.
If you want to talk more about the pros and cons of renting a property out in the short term, please contact us at Santa Barbara Property Management.