Rental Arbitrage in Houston | What You Should Know!

 The rental arbitrage houston is a way for short-term rental hosts and property managers to extend their portfolio without having to go out and buy more homes. According to statistics, the vacation rental business in Houston, Texas, is quite profitable. As a result, Houston, which is a major tourist destination, is one of the top 50 locations to generate money through short-term rentals, with hosts earning 72 million in supplemental income through Airbnb alone in 2018.

It would be perfect for Houston residents to take advantage of this chance and offer their home as a vacation rental. While Houston does not currently have a Short-Term Rental Ordinance in place, there are a few tight requirements that you should be aware of in order to avoid potential penalties that may cost you and your business a lot of money. The following are the most important rules to remember:

Tax on Hotel Occupancy

In order for the City of Texas to benefit from the economic impact of holiday rentals, hosts must collect a "Occupancy Tax" from their guests.

The Hotel and Motel Ordinance is a piece of legislation that governs the operation of hotels and

Short-term rentals within the city borders are defined and regulated under this ordinance. In addition to a conventional construction permit, anyone developing a hotel or motel must obtain a Hotel/Motel permit from the Planning Department.

The application fee for a hotel/motel permit is $200, plus another $200 if a variance is required.

Any amendments to the Hotel/Motel ordinance must be approved by the Houston Planning Commission.

Building And Housing Standards: The Building and Housing Standards Act regulates the construction of buildings as well as the design and upkeep of them. This includes rules for habitability, health, and safety. More information is available from the Code Enforcement Division.

Other Rules: In addition to the ones listed above, potential holiday rental hosts should be aware of a few other rules when looking at properties in Houston.

The Multiple Dwelling Law is separated into hosted and unhosted rentals and applies to buildings with three or more distinct rental units.

Rentals that are hosted:

This agreement necessitates the host's presence on the property throughout the duration of the guest's stay. Although the length of stay with hosted rentals is limited, visitors have access to all areas of the rental unit during that time.

Unhosted Rentals: Under Houston's multiple dwelling ordinance, unhosted rentals of fewer than 30 days are forbidden. This law only applies to "Class A Dwellings" in the city.

Condominiums

When it comes to condominiums, hosts must determine whether the structure is a class "A" structure, in which case multiple residence laws apply. Furthermore, the HOA (Homeowners Association) of a building may have stringent regulations that make renting out the room difficult.

Buildings with Rent Stabilization

Hosts in rent-stabilized buildings have extra restrictions, notably in terms of the rental amount they can charge. It's worth noting that profiting from holiday rentals in such structures is technically unlawful.

However, because these properties normally do not have any restrictions on short-term leases, this may not be an issue. The only issue that hosts may have is if other inhabitants in the building are unhappy with non-residents wandering around.

In conclusion, there are a number of regulations to investigate, and the penalties for breaking the law are severe. However, there is some good news! Maintaining compliance with local rules governing short-term and other related rentals will ensure that you have no problems hosting. You'll have nothing to worry about if you follow the local laws and regulations.