Short-term rentals, like those listed on Airbnb and VRBO, offer property owners opportunities for additional income. However, the rise of these platforms has led many jurisdictions to impose regulations.
These rules can significantly affect how property owners use and profit from their properties.
Zoning laws and restrictions
Many cities and towns regulate short-term rentals through zoning laws. These restrictions aim to balance the community’s needs with property owners’ rights. Property owners should check their local zoning laws to ensure compliance and avoid fines or other penalties.
Licensing and permits
Some jurisdictions require property owners to obtain licenses or permits to operate short-term rentals. These requirements often include application fees and safety inspections. In Michigan, many cities mandate short-term rental registration and limit the number of units in certain zones. Meeting these requirements ensures that rentals meet safety standards and contribute to local economies.
Tax obligations
Short-term rental income is subject to taxation. In Michigan, property owners may need to pay state use taxes and local lodging taxes. Platforms like Airbnb often collect and remit these taxes on behalf of hosts, but property owners should verify their tax obligations to avoid unexpected liabilities.
Neighborhood impacts and complaints
Short-term rentals can increase traffic, noise, and parking congestion in residential neighborhoods. As a result, some communities have imposed strict rules or outright bans on them. Michigan law allows municipalities to regulate short-term rentals to address these concerns while protecting community character.
Adapting to changing regulations
Short-term rental laws evolve as communities respond to their impact. Property owners should stay informed about local and state regulations. Proactively adapting to new rules helps maintain good relationships with neighbors and ensures uninterrupted rental operations.