November 11, 2021

Short-Term Rental Overview

There has been a massive increase in short-term rentals in recent years, with companies like Airbnb and Vrbo growing to become household names. But what exactly is a short-term rental?
Posted by GovOS Team
A short–term rental is typically defined as a rental of any residential home unit or accessory building for a short period of time. This generally includes stays of less than a month (30 days), but the maximum length can vary depending on the state and jurisdiction in which the rental is located.

Such rentals are also sometimes referred to as transient rentals, vacation rentals, short-term vacation rentals and resort dwelling units. So, the answer to a question like “what is a short-term rental?” may well include terms like these depending on the location, agency or organization with which you’re dealing.

What are the different types of short-term rentals?

Short-term rentals are often divided into different categories, such as entire homes, accessory dwellings or individual rooms. If the owner designates the property as their homestead 51% of the time or more, it’s usually considered an owner-occupied dwelling. If not, the property would be considered a non-owner-occupied dwelling.

Entire Homes

A rental property can be considered a short-term rental if the owner spends most of the time there but occasionally rents out the whole home for a few days or weeks, up to a maximum number of days per year.

Additionally, if an absentee-owner rents out their property for short stays, up to a given number of days per year, that would also be considered a short-term rental.

Accessory Dwellings

If an owner were to rent out a portion of a property they live in – such as a guest house or garage apartment – for short periods of time that, too, would be considered a short-term rental.

If an absentee-owner were to rent out similar accessory dwellings for a given number of days per year on a property they own but do not live in, that also would be considered a short-term rental.

Rooms

If an owner rents out one or more rooms in their primary home for short stays, up to a maximum number of days per year, that’s considered a short-term rental.

If an owner were to do this but live off-site at a different property it would still be considered a short-term rental.

Does the definition of a short-term rental vary between jurisdictions?

Certain jurisdictions make further distinctions between different types of short-term rentals, complicating the “what is a short-term rental?” question. While some areas differentiate between single-family and multi-family homes, others make a distinction between short-term rental properties located in areas zoned as residential, and properties located in commercial or multi-use areas. Some will divide short-term rental properties where the owner is present for the entire time of the rental from those where the owner is not present for the full duration.

It is important to visit your own state and local government websites for more information regarding how a short-term rental is defined in your community.

What does the future of short-term rentals look like?

The continued popularity of companies like Airbnb and Vrbo show that short-term rentals aren’t just a big city phenomenon. There is now a global boom, with the number of listings for short-term rental properties growing every year with hundreds of different short-term rental websites in existence.

Considering the growing demand, it’s becoming more and more important for communities to track and regulate short-term rentals. Not only can increased tourist traffic slowly transform regular residential areas into a tourist hub, but these short-term renters may be unaware of local laws and regulations and put themselves, or others, in danger.

Navigating the world of short-term rentals and the many different distinctions made can be difficult, but with the help of the GovOS Short-Term Rental Solution, your community will have the insights needed to identify undetected revenue. With solutions for short-term rental identification, host compliance, tax collection, licensing, and a hotline, you can upgrade your reporting process without impacting staff time.

The benefits aren’t just limited to increased revenue and efficiency – GovOS’ short-term rental software will also enable your community to put short-term rental regulations in place that enhance safety with real-time notifications regarding changes in procedures that get sent to all property owners.

Ready to speak to someone about your software needs?