Short-Term Rental Property 101

Thinking about renting out your home?

Here’s what you need to know.

Over the past decade, the short-term rental market has grown into a multi-billion dollar industry. Platforms like Airbnb, Vrbo, and a handful of other websites make it easier than ever for homeowners to rent out a spare room or entire property on a temporary basis.

The appeal is clear: extra income, flexibility, and connecting with travelers from around the world. But before you open your front door to guests, make sure you understand the legal, financial, and insurance implications—because they’re more complex (and more important) than ever.

The Fine Print

What to Know Before You List

Before listing your property on any short-term rental platform, start with a basic, but often overlooked, step: make sure it’s legal in your area. Many cities and municipalities now regulate or restrict short-term rentals, especially in response to housing shortages or neighborhood complaints. These laws vary widely. Some cities cap the number of days you can rent annually, while others require registration, permits, or even hotel taxes.

Also, enforcement has become more consistent. Thanks to new data-sharing agreements between platforms and local governments, it's now much easier for cities to track and fine unregistered or noncompliant rentals.

If you live in a condo, co-op, or planned community, your association’s bylaws likely restrict short-term leasing. Violating these restrictions can lead to fines, penalties, or even legal action. It's worth getting clarity before listing because HOA disputes rarely end quietly.

Renters face another hurdle: subletting clauses in leases. In many cases, short-term rentals are considered unauthorized subletting. Review your lease carefully, and talk to your landlord. Even if it’s technically permitted, get their written approval to avoid potential eviction or liability down the line.

What to Know While You’re Hosting

Once you’ve confirmed your right to rent, protect yourself during the rental period.

Insurance coverage is critical. Many homeowners and renters assume their existing policies cover short-term rentals, but that’s often not the case. Most standard homeowners’ insurance policies exclude commercial activity. Renting out your home, even for a weekend, may fall into that category. Some platforms offer host protection coverage, but it’s limited in scope. Speak with your insurance agent to ensure your policy includes short-term rental protection or consider a rider or separate policy tailored to this type of use.

Fair housing laws apply—yes, even for short-term rentals. Discrimination based on race, religion, national origin, disability, gender, or familial status is illegal under the Fair Housing Act. In recent years, several platforms have updated their terms of service and implemented anti-discrimination protocols. Regardless, hosts are still liable if they violate these laws. Be mindful of how you screen and communicate with guests.

Also worth noting: platforms are constantly evolving their terms and fee structures. What was a flat fee a few years ago might now be a host-guest split or subject to tiered pricing. Keep up with platform policies so you're not caught off guard.

Still Have Questions? We Can Help.

Short-term rentals offer opportunity, but also risk. Between local laws, HOA rules, insurance gaps, and fair housing compliance, it pays to have legal clarity before you list. At Anselmo & Wojcikci, we’ve helped hundreds of homeowners, investors, and renters navigate the short-term rental landscape.

Need help reviewing your lease, association bylaws, or city ordinances? Contact us today and protect your rights before handing over the keys.

About Anselmo & Wojcicki, LLP

Anselmo & Wojcicki, LLP is a multi-disciplinary law practice based in Schaumburg, Illinois, specializing in real estate, estate planning, tax planning, business formation, and the sale and purchase of businesses. Our commitment to our clients and our values set us apart from the crowd. Our team of legal specialists has a wealth of experience and expertise to help you meet your legal needs. We are dedicated to providing quality service and building lasting relationships with our clients.