Renting Your House Short-Term to Avoid Foreclosure

Written by: Christy Rakoczy

In a tough real estate market, some homeowners are turning to creative methods of earning income to keep their houses. One option that has taken off in certain parts of the country is renting your house short-term as a vacation destination. In desirable parts of California and other areas with a large tourist market, people are lending their homes out on a weekly or monthly basis as an alternative to hotels for travelers. These areas have been some of the hardest hit by falling property values and foreclosures, and being able to collect fees from $100 per night or more by using the home as a vacation rental can help you to hold on to your house when you may have few other choices.

Homeowners Associations and Short Term Rentals

Unfortunately, the short-term rental market is not seen as a blessing by everyone. Many homeowners associations are taking action to try to stop this behavior, passing bans on short-term rentals of homes in their communities. Others have actually taken people to court, claiming that the clause mandating that the property be used for “residential purposes” only in their HOA agreement precludes them from renting the home out as a vacation rental property.

If you are depending upon income from renting your home as a short-term rental, these bans or proposed bans by the HOA can be devastating. As such, taking action to fight them is absolutely essential if you want to preserve your right to use your home as you please.

In order to fight against a vacation rental ban, there are a few specific things you can do to maximize your chances of success:

  • If you list your home on a website that offers vacation rentals by owners, you may be able to use the resources from the site to contact others near you who are doing the same. For instance, Vacation Rentals by Owner will put out news of a ban if you let them know it is impending.
  • Contact your neighbors. By law in most states, the HOA has to give you a list of other neighborhoods in the homeowners association. Obtain that list and start contacting the people in the neighborhood to find out their position on the rental ban and to help try to recruit support for fighting the ban.
  • Investigate the reason for the ban. Have there been any complaints or problems arising from renting the property? Sometimes, people fear rentals simply because they have a preconceived idea that renters mean trouble and lack of respect for the community. If there have been no actual problems or complaints, you can use this fact at board meetings and when talking to your neighbors to argue for why the ban should be defeated.

By being proactive, attending homeowners association meetings and keeping an eye on what is going on in your neighborhood, you can help to take action to fight rental bans if you are depending on your home as a source of income.


Renting Your House Short-Term to Avoid Foreclosure

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