Short Term Rental Mortgage Risk Analysis

Financial institutions are concerned about lending or financing investment properties that are short term vacation rentals.  Before the COVID-19 crisis, many short term rental operators were reaping a net profit of 300 to 400% higher than their long term rental landlord counterparts.  But the economics quickly changed earlier this year as restrictions on short term rental activities were imposed by state and local health departments.

mortgage risk analysis related to short term rentals

Harmari STR can provide you the risk assessment which helps identify risk of the following:

  • Risk of breach of agreement with the Homeowners Association (HOA) or Condominium Board
  • Risk of breach of agreement breach between Landlord and Tenant
  • Non-Compliance with municipal zoning/permits – This is included in Full-single or whole-city service.  Harmari STR looks into many common zoning concerns such as Primary Residency, Overcrowding, Septic System Capacity, Health and Safety Risk
  • Non-Compliance with tax laws – Although we are not a taxing authority, we can estimate risk of under-reporting or non-filing depending on the jurisdiction.  Some jurisdictions have a voluntary collection agreement with different short term rental platforms, so in those cases the risk may be less.
  • Statistical analysis of short term rentals as a percentage of total dwellings

Contact Us to learn more about Mortgage Risk Analysis with respect to short term rentals.