Corruption of the short-term rental agreement

Did you know that short-term leases are a viable way to increase profit margins on your multi-family property? These arrangements provide individuals and families who have been displaced from their homes a temporary place to stay, while also offering professionals a home away from home while out of town on business.

These are just two examples of the beneficial uses of short-term rentals. However, as in any industry, there are individuals and companies that make questionable short-term rental transactions. This seems to be giving a respectable practice a bad impression. This is why it is important to shed some light on the main differences between what these people and companies do and those who go by the books.

definite

In case you’re wondering, a short-term rental agreement is exactly what it sounds like: an agreement or contract on a rental property for a short period of time.

Gone wrong

New York is an example of a city where short-term rental contracts have been under the microscope for at least the last year. So, we’ll use it as an example in this case.

There are renters as well as property management companies that are basically nightly or weekly “rental” units. The renters who are doing it are actually renting out their own home, which they rent out themselves, to perfect strangers to earn some extra cash. The companies that are doing this are also doing it for the money, of course, because they can charge a very nice penny to visitors to New York City who stay in places like a loft in SOHO.

The problems, of course, run deep and wide. When a tenant rents her apartment to someone else, the probability that the third tenant has gone through a screening process is very low. So there are all sorts of potential problems with theft, damage, and other issues associated with breaking a lease.

There is also the very big problem of the residents of the building, who are being subjected to these third-party tenants. You can pretty much bet they didn’t sign up to have temporary tenants living right next door, changing regularly.

Well done

Because of this problem, New York City has made it illegal to have a short-term rental agreement. The “catch”, however, is that the short-term rental in this case is defined as “less than 30 days”. A 30+ day deal basically addresses the idea of ​​”transient” renters while still allowing for the needs of business travelers and the like.

Therefore, while it is always necessary to check the stipulations set out in local legislation, short-term rentals are still a very viable way to take advantage of available properties. It is simply recommended that all property owners and managers comply with the minimum rental period requirement and include restrictions on subletting in all leases.