Should I let my renter post their unit on short-term rental sites like Airbnb and VRBO?

Renters might like the idea of using Airbnb, VRBO and similar sites to bring in extra cash, but for property owners, it can be risky. Here’s what to know when considering allowing residents to list your units as short-term rentals, and what you can do to keep them off rental platforms.  

Letting renters list means giving up some control 

You might have screened your renter, but if you let them list their unit on short-term rental sites, you can’t screen the bookings. 

“The landlord loses control over what goes on at the property,” says Ann O’Connell, legal editor and attorney at Nolo, an online legal resource and publisher. “Say the short-term renter doesn’t leave; the landlord would be forced to evict them.”  

Owners might be on the hook for fees and damages

If local officials spot a violation of any short-term rental regulations, they’ll likely take it up with the property owner, not the resident, O’Connell says. The owner would then have to try to recover fees or damages from the renter.

In addition, if a short-term renter was injured or otherwise sustained damages during their stay, depending on the situation, both the owner and resident could be sued. 

“The renter could assume the tenant was renting it out with the landlord’s permission, and it would be up to the landlord and tenant to battle it out as to who’s responsible,” she says. 

You should also check whether your insurance covers situations such as a short-term renter getting injured or causing damage if the resident listed the property — and if that includes incidents where the resident's listing violated any local short-term rental regulations, she says. 

Have short-term rentals covered in the lease

If you don’t want a renter to list their unit on Airbnb or other similar platforms, make sure your lease says that short-term rentals aren’t permitted, says Jessica Ryan, principal and head of the Landlord Tenant Department at Chicago-area law firm Kovitz Shifrin Nesbit. 

There’s no easy way to block renters from listing units on short-term rental websites altogether. Even in Chicago, which maintains a list of buildings where short-term rentals aren’t permitted, the system isn’t foolproof, Ryan says. 

In larger apartment and condo buildings with someone staffed at the building entrance, guests might get caught when they approach the front desk asking to check in, as if it were a hotel, she says. At smaller buildings, they generally go unnoticed unless they cause a disturbance. 

Some of Ryan’s clients with larger buildings have a staff member periodically search for their properties’ addresses on popular rental platforms. 

“It depends on how much time they have, and how big an issue it is,” she says. 

The takeaway: Whether you’re open to allowing short-term rentals or not, do your homework on local regulations and insurance protections, consider the potential risks and make sure your policy is covered in your lease.  

By Lauren Zumbach from Story by J.P. Morgan