Asheville’s Homestay Market is Booming!
It’s no secret that the Asheville AirBnB and short-term rental markets are booming. In fact, Asheville is one of the top markets in the country for investors, with more than 3% of local housing supply in short-term rental programs. Despite having one of the highest percentages of units in homestay programs nationally, Asheville still boasts a strong market demand, with units rented close to 50% of the time. That makes homestay and short-term rental ready properties a great investment, or a way to help offset the costs of home ownership. With Asheville’s average nightly rental rates of $123, it only takes a handful of rental nights to add up to a substantial bonus income. If you rent your unit just a dozen times, you’ll gross nearly $1,500 per month! That would pay for many homeowners’ entire mortgages and then some. But before you go off to buy an income generating property you need to do some homework. Asheville has, justifiably, placed numerous restrictions and regulations on short-term rentals and homestays in an attempt to mitigate any possible negative impacts on residents and affordable housing. Not every property can be rented. Not every location is permissible.
Homestay vs short-term Rentals
The City of Asheville allows two types of paid overnight lodging accommodations within a home or apartment for less than one month. So, what’s the difference between a homestay and a short-term rental? A homestay is the rental of a room or rooms in a private home. A permanent resident (can be a resident with a long term lease) must reside at the property and be present in the home during the time of the homestay. Homestays can be permitted in residentially-zoned areas if they meet the regulatory requirements for homestays and the owner obtains a homestay permit.
Rental of an entire dwelling unit for less than a month is called a short-term rental, and these types of uses are prohibited in all Asheville city residential districts except for a small portion of the Downtown Asheville Residential Neighbors (DARN) section with permits activated before January 9th, 2018. Once you determine which of these types of arrangements would work best for your situation, it’s time to start looking for the perfect property. That’s where I come in! I’m well versed in the ins and outs of the Asheville homestay regulations and which neighborhoods would be the most attractive and marketable. I’m happy to help you find the right property, for the right price, in the right location. Once you own a home and want to get started, you’ll need to do several things in order to ensure that you’re in compliance with local ordinances, which can be viewed HERE. If you don’t follow the rules, you can incur fines of up to $500 per day! You’ll need to provide the following to the city of Asheville:
- Completed Homestay Application
- $208 Zoning Application & Technology Fee Payment
- Proof of 2 forms of residency
- A floor plan of the home and information about the location, smoke/carbon monoxide detectors etc…
Can I operate more than one homestay?
No. The homestay must be operated out of your primary residence. Only one permit may be issued to a single applicant.
How many rooms can be in the homestay area?
A maximum of two bedrooms can be used.
How long is my permit valid?
Permits must be renewed every 12 months.
Do I need to add more parking?
No additional parking is required. What about insurance? Check with your insurance provider.
Do I have to pay taxes on the money I make?
Yes, the city of Asheville levies a 6% tax on gross receipts in an due on the 20th of every month. You’ll also have to pay self-employment taxes on the monies you receive.
Who is Asheville’s premiere expert on buying and selling homestay properties?
Jody Flemming, with Divitia Realty, is the author of this article and is experienced in the topic.