Originally touted as a great way to make some money, and even help pay the monthly bills, short term rental websites have caught the eye of lending institutions, condominium corporations and neighbours alike; unfortunately, for all the wrong reasons…
Some banks will insist that home-owners borrowing on a property will provide full-disclosure to the lending institution, making the lender aware that the home-owner plans on using their property as a short-term rental, even if they also plan to live in the property in the meanwhile. Other lenders may not insist on this disclosure as long as the proper insurance on the property is in place.
The consequences of a home-owner’s failure to inform their lender, even upon the lenders instance on doing so, is unclear as the policies are relatively new. Just like a renovation that significantly alters the state of your home, your lender may or may not be concerned as to whether short-term rentals might have some impact on the value of your property.
More condominium corporations are responding to complains from residents regarding the transient nature of short-term rentals. Seeing unfamiliar faces coming in and out of a particular unit each weekend is the worry of some residents. Other residents may be concerned with rowdy parties and absentee landlords who aren’t around to field complaints from unhappy neighbours. Some condominium corporations have gone as far as to track short-term rental websites to make sure none of their units are up for rent.
If you’re a condominium owner, you well be well-suited to make sure that any short-term rentals, through AirBnB or other popular short-term rental websites, do not run afoul of your condo rules. Condo owners who break the rules of their condominium corporations might soon receive a letter from their management, or even a lawyer.
While not all banks and lenders might be onside with AirBnB and other short-term rental websites today, rules and perceptions do change; and while it may take sometime to become more mainstream – open minded lenders may one day even consider short-term income as a positive when lending on a home.
But until that day comes, home-owners should tread carefully before looking to host some guests on these popular short-term rental sites.
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