Occasionally I receive calls from investors looking for properties to turn into Airbnb short-term rentals. After pointing out the potential obstacles many of these callers are often dissuaded. At the bottom of this post, I’ll share some links that describe the difficulties surrounding short-term rentals here in Montecito and Santa Barbara.
Some of the inherent difficulties with short-term rentals are that they will not fly in condo or homeowner associations since many association bylaws prohibit rentals even when owner-occupied. Other issues range from Zoning Restrictions, second home property taxes, and special insurance coverage to property management costs. I can help someone identify the best location and the best property, but I cannot advise someone to go forward in this context without properly disclosing the myriad of difficulties and problems involved with short-term rentals here in Montecito and Santa Barbara. Some areas’ Zoning in southern Santa Barbara allows for short-term rentals, but most do not.
Airbnb, which matches travelers with property owners that have a couch, a room, or an entire property to rent, has become a powerful force in the real estate market. Today Airbnb is a $25.5 billion dollar business. The perception here in Santa Barbara is that Airbnb rentals not only may have a negative impact on property values but how does a property owner that’s thinking of selling their home disclose that there may be illegal rentals nearby in violation of local Zoning Restrictions? What’s curious to me is how some property owners that offer short-term rentals like to suggest this is all about the new “sharing” society (that these internet companies have created) and they’re helping people when in all actuality they’re trying to monetize their property for their own ends. Statistics now show that the offering of these short-term rentals in areas where there is a limited supply of rentals actually reduces that inventory. Roger Herman, “It’s a business. It’s no longer a house. It’s no longer a community.”
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