2025 Short-Term Rental Rules: 7 Checks Before You Buy

More cities are capping permits, enforcing primary-residence rules, and fining illegal listings. Due diligence is the only way to avoid a shutdown notice after closing.

7 checks pre-offer

1. Zoning: Confirm the zoning district allows STRs or transient lodging; look for caps or buffers between permits.
2. Primary residence rules: Some cities require the host to live onsite or limit non-owner-occupied permits.
3. Permit caps/waitlists: Verify availability and whether permits are transferable to a buyer.
4. HOA/condo bylaws: Read recorded CC&Rs and rules; many ban rentals under 30 days.
5. Tax/licensing costs: Estimate lodging taxes, local business licenses, and inspection fees.
6. Safety requirements: Inspect for egress, smoke/CO alarms, fire extinguishers, and occupancy limits.
7. Insurance: Price STR-friendly coverage; standard landlord policies may exclude short stays.

Red-flag locations (examples)

• New York City: Most whole-unit STRs prohibited; registration required for hosts.
• Honolulu/Las Vegas: Strict resort/overlay zones; heavy fines for violations.
• Austin/Denver: Caps and primary-residence requirements; waitlists common.

Structuring your offer

• Make offers contingent on obtaining or transferring the STR permit.
• Request seller’s prior permits, tax filings, and compliance history.
• Model cash flow with a “no-STR” scenario so you know your floor.

Post-closing compliance

• Apply for permits immediately; some cities have tight filing windows.
• Display license numbers on listings; file lodging taxes on schedule.
• Document house rules and noise controls to avoid neighbor complaints.