Can you use your SF Apartment to Host on Airbnb? The answer may surprise you.

Posted by Bob Walsh
Bob Walsh

Airbnb Hosting from your San Francisco apartment is a great way to bring in some cash, but you have to be aware of the legal and business restrictions that apply to you. Here's a rundown on them:

Gotta have a permit for that. Or two.

Let's start with the legalities. Since February 2015, in San Francisco, only permanent residents who live in their home at least 275 days of the year can provide short-term (less than 30 days) rentals like an Airbnb Hosting. This applies to single-family dwellings, multiple-unit apartment houses, you name it.

There's an Office of Short Term Rentals (OSTR) that enforces this regulation - and others - and its staff can impose hefty daily fines if you exceed the 90 day rule. The one loophole in this particular regulation is it doesn't apply if the host is actually present in the home. So if you are going to stick around while renting out that extra bedroom, you're safe.

Also keep in mind that you as the host are expected to self- report the number of days of a unit is rented on a short term basis each January 1st.

But realistically, in order to find people who want to rent, Francisco's you're going to have to go through Airbnb. The OSTR closely monitors Airbnb's listings as well as other companies offering short term rentals.

Speaking of San Francisco's OSTR, you need to be registered with them as a Host (that's $250), and in order to do that, you first have to get a business permit from another part of City Hall, the Office of the Treasurer & Tax Collector (and that's $91, although if you are only getting this permit so you can Airbnb Host, it's reimbursable). Tax collector? Yep - San Francisco collects a 14% Transient Occupancy Tax of reservations of less than 30 days. Or rather, the host, or the hosting company, is on the hook for collecting that tax.

Now this tax is normally collected from Airbnb Guests when they reserve, so you don't have to worry about it. And Airbnb also went the extra mile so you can get apply for both the Short-Term Rental Certificate and the Business Registration Certificate through Airbnb.

The real roadblock to Hosting your apartment? Your landlord.

The real roadblock to using your apartment for Airbnb is your landlord. Nearly every lease, contract and rental agreement puts restrictions on subletting - and hosting your place on Airbnb is definitely subletting. Without your landlord's permission, usually in the form of an addendum to the rental agreement, you can be evicted for being an Airbnb Host.

But will your landlord even know you're hosting? Short answer is yes.

  • San Francisco will notify your landlord as part of the permitting process.
  • Your neighbors are bound to notice, and they can also tell your landlord.
  • And, Airbnb won't let your host without that OSTR registration number.

Two ways to get your landlord's permission

So you're going to need your landlord's permission. You definitely want to be proactive about this and not have them find out through a letter from City Hall. You can ask them really, really nicely. Or you can have Letulet negotiate a deal for you.

Letulet is a startup that's in the business of getting landlord's to happily agree selected tenants can Airbnb.Letulet does this by making a professional online proposal to your landlord on your behalf. Letulet's proposed addendum agreement is written by real estate attorneys who know what other real estate attorneys are going to want in that addendum.

Best yet, with Letulet, you can offer your landlord a cut of what you actually make hosting. You can propose a fixed percentage of what you make from Airbnb, and Letulet will take that fixed percentage of what you make from Airnbnb, and deduct it from your bank account after each Airbnb payout and deposit it to your landlord's bank account for you.

Providing your landlord a financial incentive to agree means they are far more likely to agree. And by first negotiating for you a fixed percentage of what you actually make, and then handling the transaction, Letulet is a far better alternative to a permanent rent increase that costs your whether you host that month or not.

So what's the bottom line?

The bottom line is yes - you can host your apartment - if you get your landlord's approval. Letulet can help you secure that agreement - and make the financial incentive you offer your landlord less painful.

Airbnb hosting is like any business - there are costs to doing business. Handling the hosting of your San Francisco apartment like a business from the start by having Letulet negotiate on your behalf with your landlord is a great first step to building that side gig into a lucrative business in 2019.

Topics: Renter

 

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