Vacation Rentals Part 1: The Sharing Economy’s Impact on Your Association
It’s no surprise, then, that short-term vacation rentals have grown in popularity in places like Chicago. It is a nice way for many homeowners to earn extra income from a spare room or investment property, or to keep the residence occupied while they are away—and get paid for doing so!
Proponents of this shared economic business model cite its efficiency in utilizing existing assets and capital. After all, homeowners can reduce the cost of ownership and earn extra money, while consumers can enjoy short-term usage at a reasonable price. It’s a win-win situation for everyone, right?
Not so fast. The rapid growth of the sharing economy is sometimes outpacing both legal and practical considerations. Take popular home-sharing websites like Airbnb, HomeAway and VRBO. These sites enable people to monetize their living spaces through short-term or vacation rentals to travelers, in essence, blurring the lines between a traditional rental and a hotel room. However, a new Chicago ordinance, which went into effect on July 1, 2016, impacts the way in which these short-term vacation rental sites operate.
Along with local laws, homeowners and tenants must comply with all existing homeowners association (HOA), co-op or condo board policies, by-laws, rental leases or other provisions that apply to home sharing. Many associations prohibit homeowners from participating and are fining those who don’t comply. Renters who defy HOA rules may even lose their leases.
With more than 10,000 Airbnb listings in Illinois, homeowners and associations need to consider a range of issues, including legal regulations, security, insurance, property value and quality of life.
So what can you do? If your condominium association is currently grappling with this issue, consult with an experienced property management company for guidance. A professional management company can assist you in creating a workable game plan to help your association proactively address this trend. To learn more about what a property management company can do for your association, contact FirstService Residential, the leading property management company in Illinois.
Interested in finding out more about the potential effect of the sharing economy on your association? Fill out the form below to download our free, comprehensive white paper. You’ll learn how your community can establish a short-term rental policy and receive information about how working with a professional property management company can add value to your association.