5 Tips for Effective Short-Term Rental Regulations


Rental property investments are nothing new. For decades, these income-generating properties in popular tourist destinations have given travelers alternative homes.

The short-term rental investment’s growth has continued at a relentless pace over the years. We’re talking about a growth of over 21 percent in the second quarter of 2022, which is already surpassing the revenue for 2021.

What’s even more amazing is that the industry of rental property investments is expected to keep growing in the next few years. The flexibility and availability of passive income real estate have revolutionized the tourism industry. That is why many investors are looking for ways to enter the industry.

Where and How to Invest in Short-Term Rental Properties

Investing in passive income real estate is a great way to earn money. Some people build huge houses and rent out part of it to Airbnb.

So what is the ideal location when it comes to where to buy a rental property? My recommendation is that you don’t choose a city you’d like to stay in for part of the year. Unless of course, you’re looking for a second home because that won’t maximize your earning potential.

Remember that short-term rentals rely on supply and demand. Thus, if you intend to invest in Techvestor.com or any other company, make sure that you understand the property market of the location you’re considering. You should also find figures that will support your business venture.

That’s because the more demand there is for rental houses, the more likely you’ll always stay fully booked.

Effective Enforcement of Short-Term Rental Regulations

What was once a small sliver of couch surfing and budget travel has turned into an industry with a massive impact in terms of revenue. This left many local governments flat-footed, thus facing the sudden surge of short-term rentals in terms of both ordinance enforcement and tax collection.

In some countries, the Airbnb effect has pushed up the cost of short-term rentals. Some laws have been put in place such as the Multiple Dwelling Law. The law only allows rentals of fewer than 30 days in buildings that house more than three families living independently. Failure to abide by the laws and regulations can result in heavy penalties.

Setting a framework for regulating rental properties is critical for consistent and effective enforcement of rental property regulations. Having regulations in place, however, is only half the battle.

Keeping property owner’s informed of their responsibilities and updated on change can impact those regulations. Below are the tips for better owner awareness and compliance with short-term rental regulations.

  1. Explain Why the Regulations are in Place

For some rental property investment owners, the idea of local regulations and compliance may seem like a form of interference from the government.

But like any rental host or operator may know, the regulations are put in place for the protection of the property owner. They are also meant for the safety of the guests staying in your passive income real estate. It’s also for the benefit of the community in which the property is located.

Keep in mind that it’s necessary to ensure that there’s honest and direct communication with rental operators. Thus, you must be sure to explain the importance of the safety regulations and discuss the impact that short-term rentals have on the market.

You should also showcase the benefits that short-term rental investing tax brings to the community, to counteract any concerns. Explaining the importance of short-term rental regulations makes it easy for the rental operator to comply. 

  1. Empowering the Staff to Offer Support

A lot of people outside the government see compliance departments as bureaucrats that are out to punish those in the community. However, those who work in those departments are there to help and not harm.

Outbound communication can help to establish a better relationship between the government and the owners of rental properties. Customer service is another important tool that can be used to make the process more pleasant. It also assists in increasing the likelihood of compliance.

No doubt that a lot of questions from rental operators can be answered through a well-organized and clear digital experience. However, it’s still important for governments to provide positive support in various ways.

Empowering the staff to provide phone support that assists callers to help to build connections with rental property operators. It also promotes transparency by providing a human connection. That’s in case an operator has questions about the hows and whys of rental property investment ordinances and compliance. 

  1. Avoid Relying on Short-Term Rental Websites for Data

When many communities get a handle on their rental property market, a lot of them rely on listing websites. That is where they go to find properties that are out of compliance.

But taking time to scour Airbnb or the growing list of rental property investment sites brings about many problems. To begin with, the amount of staff time dedicated to clicking through websites is inefficient. However, digital solutions like Host compliance software provides an automated search that’s driven by machine learning.

Note that online platforms don’t provide the important data points that are relied upon by the compliance staff. A good example is that websites don’t share the addresses of the rental property.

Booking sites don’t provide the number of nights that a rental property is occupied either, nor the cost. Yet, all those are crucial pieces of information meant to determine how much rental operators should pay in taxes. 

  1. Effective Communication

It shouldn’t surprise anyone in government that successful compliance with regulations requires effective communication with stakeholders. Identify non-compliant rental operators and provide communication that focuses on solving the issues at hand. This is better than punishing non-compliance.

With the boom in rental estate investing for passive income, many operators are beginners in the industry. Due to this, many of them are looking to take advantage of the market opportunities. These operators may not even know about the regulations and what’s required to become compliant.

That’s why they must be issued letters notifying them of where to register their properties. This will help to make compliance with the regulations easy. You should also provide irrefutable proof of non-compliance to minimize back-and-forth conversations with the owners of a short-term rental investment.

Providing a screenshot of the non-compliance listing is also a great way of showing where the problem occurred. It’s also proof that the local government compliance team has noticed the issue. Effective communication can bring about a dramatic impact on compliance. 

  1. Set Clear Dates and Expectations

Keep in mind that nobody likes facing a fine for a violation that they didn’t know about. That’s why the government needs to state the required registration dates. The consequences should also be indicated in case the property owner fails to register on time.

The dates and expectations should not be hidden in fine print and neither should they be difficult to find on the government’s webpage.

In case of non-compliance, there should also be proof that the rental property is currently operational. Then be sure to follow through on the consequences of non-compliance as stated.


Just as the rental property investment market keeps growing and changing, so do the laws that keep the sector in order. An increasing number of cities have been cracking down and taking measures to protect stakeholders.

In some instances, lawmakers partner with property managers in an attempt to avoid banning short-term rentals. This is meant to bring more structure to the table with clear rules that must be adhered to. That’s why you must frequently check your location for updated laws and any other requirements by the local government.

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