Cashing In: DC's Lucrative Short-Term Rental Market

• August 16th 2012

by Shilpi Paul

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August in DC generally means increased humidity, non-profit sidewalk canvassers…and emptiness. With Congress in recess and other government bodies taking a rest, many residents retreat to the beach and tourists get more out of city sights than locals.

However, along with the usual signs that come with the arrival of the year’s warmer months, a real estate trend has been born in DC this summer. UrbanTurf has heard from a few city dwellers who are renting their homes out to short-term visitors while their families go on vacation.

For example, one Logan Circle resident decided to cash in on his empty home while he and his family vacationed at the Outer Banks for a few weeks. He would be beachside most of the time, but could stay with friends when he needed to pop back to DC.

He uploaded photos and information about his home on Airbnb and posted a rental rate of $300 a day. Shortly after publishing the ad, he received an email from a man who was working in the city temporarily, wanted to bring his family to the District for a 12-day trip and needed more living space that his 6-month rental provided.

“Our house was a perfect fit,” the Logan Circle resident told us. “Four bedrooms, two kids rooms.”

The individual had never used Airbnb before, so was a little wary of the possible renters, but was comforted by the renter’s work at the IMF and his geniality. “He showed up in a suit and a bow tie — any guy with a bow tie can’t be too bad,” he reasoned. The renter is currently enjoying the home with his family, and the resident is making close to $4,000 on the short-term rental.

Another DC resident went a step further. He moved completely out of his Dupont Circle house while his wife and kids took advantage of a two-month break from work and school to visit friends and relatives. He and his wife initially listed the three-bedroom home on Airbnb at a rate of $333 a day, but demand was such that they ended up being able to raise the rate to $400 a day. The couple first used the service to fill the house during spring break. For the summer, they managed to find a renter who needed a place to stay for two months, corresponding almost exactly to the dates of the family’s summer vacation. When the father was not on vacation with his family, he was able to stay with a friend in exchange for buying them groceries, paying for a cleaning service and offering some monetary compensation in the way of rent.

“I recommend it, but it’s largely based on location and personality,” the resident told UrbanTurf.  “I have friends who would never do this. They just don’t like the idea of someone in their house and using their stuff. Our house is nice, but there isn’t really anything that someone can break or steal that I’m worried about.”

DC area residents looking to make a little extra income via this new fangled version of the summer rental should be aware of the proper steps that need to be taken in order to do it legally.

As we wrote in an article about Airbnb earlier this year, the rental license law in DC has been amended, so whether renting out a whole house or just a bedroom, the property owner needs a one-family rental license, business tax registration, a basic business license and a rent control license or exemption. (One family licenses do not require a certificate of occupancy.) The base fine for not having a basic business license is $2,000 and fines also apply for not having other licenses. For condos or co-ops, the host will need to verify with the board of the building that renting the unit out is OK.

If those things are taken care of, the short-term rental can be quite lucrative, and extend beyond the summer months. The Dupont Circle couple above is already lining up renters for Thanksgiving and Christmas.

Similar Posts:

• Sleeping With Strangers: The Airbnb Primer
• UrbanTurf Reader Asks: Should I Rent Out My Condo Through Airbnb?

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/cashing_in_dcs_lucrative_short_term_rental_market/5917.