When getting started in the vacation rental business, it's important that your second home complies with the laws and ordinances of your state, county, and municipality. These are just a few of the things that you should look into:
Current and Proposed Zoning. Before you begin renting, you should check with your county and city about the zoning requirements for short-term rental properties. You should check not only on the current zoning status of the area your vacation home resides in, but also any proposed changes that may affect your home. To investigate the status of short-term rentals in your city or county, search past newspapers for articles about your market and consider contacting other owners who are currently renting in your immediate area. Homeowners Association Rules. In addition to your local municipalities, your homeowners association may also have rules regarding vacation rentals within your complex or subdivision. Typically these rules are found in your CC&Rs. Business Licenses and Permits. Many areas require vacation rental owners to apply for a business license or permit to rent your home on a short-term basis. These applications are often found online. Again consult your city or county for more information.
Safety Requirements. In some markets, vacation rental homes have to follow the same basic safety requirements as long-term rentals (sprinkler systems, fire extinguishers, deadbolt locks, etc.) and may also be required to complete safety inspections. Local Health Code Regulations. Some areas also have specific rules and regulation around health issues. The three most common areas of regulation involve linen sanitization, well water testing, and pool and spa maintenance.
Sales Tax. Many states in the U.S. (and Canadian provinces) require you to collect and remit sales tax. The sales tax is paid by your rental guests in addition to your rental rates. You are simply the middleman who collects the monies and then hands it over to the state at a fixed interval (typically quarterly). The Bottom Line: Before you begin renting out your vacation home, make sure that you have your proverbial ducks in a row to avoid running into unpleasant surprises down the road.

What are other considerations that new owners should be aware of in your market?

Sales Tax Requirements for Vacation Rental Homes  Do you know the rules for your state, county and/or city sales and lodging taxes? Why You Should Include Warnings in Rules and Rental Agreements  Are there known dangers regarding flora, fauna, weather, danger areas, or just plain crazy neighbors in your area? Being Involved In Homeowners' Associations (HOA)  Easy ways for YOU to get involved with your HOA from afar. 10 Ways to Defend Against Vacation Rental Bans in Your Area  Tips for staying one step ahead of short-term rental bans.

© Copyright 2008 HomeAway, Inc. Updated 9/4/08 by Kristin Dorsett.

State Sales Tax Offices    Links to each state's sales tax office.