Short-term rentals through websites such as Airbnb and HomeAway are becoming very popular in Massachusetts. Many property owners find it appealing given the potentially high rental income, especially in areas close to or within Boston. Before converting a Massachusetts property to short-term rentals, there are several important things to consider.
1 – New Tax Law on Short-term Rentals
Massachusetts recently passed a tax on short-term rental housing. This includes a state tax plus the option for local cities and towns to impose an additional tax. This law takes effect on July 1, 2019. This law also requires landlord registration with the state and insurance and inspection guidelines. If you plan to offer short-term rentals, make sure you understand this law and comply with it.
2 – Make Your Property Safe
Safety is a concern for any rental property, but it is even more important for short-term rentals. The volume of occupants accessing your property will be much higher, increasing the potential for issues. Before converting a Massachusetts property to short term rentals, you should sddress any needed repairs,… even seemingly minor ones such as loose handrails or wobbly steps. Make sure all safety equipment, such as smoke and carbon monoxide detectors, are properly installed and working. Add other safety equipment such as fire extinguishers. Make sure windows, doors, and locks are all functioning properly. Consider security measures for the building as well. By taking extra safety steps, you can minimize potential insurance claims and/or lawsuits.
3 – Comply With Rules & Regulations
If you live in a private neighborhood, condo complex, or other area with community rules, you and your renters must comply with those rules. First and foremost, make sure there’s no community restriction on short-term rentals. Secondly, prepare an outline of the applicable rules. You will need to enter this into your short-term rental listing and provide reminders inside of the unit as well. Lastly, find ways to ensure that the rules are being followed so that you don’t get fined by your community or face legal action.
4 – Be Aware of City/Town Laws
In addition to state laws on short-term rental properties, cities and towns may have additional restrictions. Take the time to learn what is allowed, restricted, taxed, etc., at the local level. Being an educated property owner is key to protecting your rights and avoiding legal and financial issues.
More on Converting a Massachusetts Property to Short-term Rentals
Before converting a Massachusetts property to short-term rentals, visit the Mass.gov FAQ page. Also be aware of that the length of rental periods is what differentiates a short-term versus long-term rental. Long-term rentals are subject to landlord-tenant laws in Massachusetts, which are very strict and favor tenants. It may be helpful to contact a Massachusetts attorney to discuss your rights as a landlord, the applicable laws, and how to best protect your interests. With the right plan and full understanding of the laws, you can operate a successful short-term rental property in Massachusetts. short