7 Cities Where Airbnb and Short-term Rental Investing is Banned or Limited

Short-term rentals can be a great way to bring in cash and make the most of those investment properties. But you have to be careful where you do it.

While a market might seem like a great spot in theory, a lot of municipalities, HOAs, and developers are cracking down on Airbnb activity — and there’s a chance it might be against local law or your deed restrictions.

Are you thinking of buying a foreclosure or bank-owned property and getting in on the Airbnb investment game? Here are seven cities you’ll have to steer clear of (or at least think twice about):

– Miami Beach – Here, most of the city won’t allow property rentals for anything less than six months. Miami Beach is currently embroiled in a court battle with Airbnb, so this could change in the near future.

– Charleston, South Carolina – Charleston used to have an all-out ban on short-term rentals, but now, it just severely limits the activity. Hosts must be at least 50 years old and live on the property, and no more than four guests are allowed at a time. It also must be your primary residence. Some properties even need to be on the Register of Historic Places to be an Airbnb. What’s worse? Violating short-term rental laws in Charleston could home with serious consequences. The city is the only one known for criminally prosecuting illegal rentals.

– San Francisco – The city only allows full-time residents to be Airbnb hosts, and even then, you’re capped at just 90 days of use.

– Santa Monica – In Santa Monica, you can have Airbnbs, but you’ll need to live on the property (even during your renters’ stays), and you’ll need to collect a sky-high occupancy tax to hand over to the city. You will also need a business license for your operation, which runs about $75. All guest stays must be less than 31 days.

– Los Angeles – LA has similar rules, only allowing Airbnbs in primary residencies (somewhere you live at least six months of the year). You also can’t have guests more than 120 days per year.

– New York – In New York, you have to be a full-time permanent resident to host an Airbnb, and even then, you can only rent out a portion of the property. Additionally, only two renters are allowed at a time.

– Las Vegas – Vegas Airbnb hosts have to be permanent residents and live on the property for at least 275 days out of the year. You’ll also need to be present during your guests’ bookings, and you’ll need a license from the city and $500,000 in liability insurance.

Internationally, there are quite a few cities on the list, too. Paris, Amsterdam, Barcelona, Berlin, and Reykjavik all make it particularly hard on residents to host and make money off short-term rentals.

Planning on turning a bank-owned property or foreclosed home into a short-term rental? Always study up on local laws and regulations first. Operating an illegal Airbnb could mean serious fines ($20,000 in Miami Beach!) or even criminal penalties in some places.