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Fayetteville Short Term Rental Regulation: A Guide For Airbnb Hosts

Fayetteville, North Carolina

What are short term rental (Airbnb, VRBO) regulations in Fayetteville, North Carolina?

Fayetteville, North Carolina currently does not have specific regulations in its city code regarding short-term rentals (STRs) like Airbnb and VRBO14. However, the city is in the process of considering potential regulations for STRs.

In February 2020, the Fayetteville City Council discussed creating a short-term rental licensing and fee structure, after concerns were raised about some STRs being used for drug parties14. The proposal was met with opposition from some people in the STR business and did not move forward at the time.

The city's Code Enforcement Division currently responds to STR-related complaints as they are received, which are usually related to noise, crowds, parties, parking, and unfamiliar people in neighborhoods14. Over 150 STRs were available in Fayetteville in the first half of 20194.

While Fayetteville does not yet have an STR-specific ordinance on the books, STR operators are still subject to the city's general business regulations, zoning laws, building codes, and noise ordinances3. Operating an STR without the proper permits and licenses could result in fines and legal issues.

As the STR industry continues to grow in Fayetteville, it's likely that the city will revisit the topic of regulation in the near future. Many other cities in North Carolina, such as Asheville, Wilmington, and Raleigh, have already implemented STR ordinances to address concerns about housing affordability, neighborhood character, and tax collection29.

STR operators in Fayetteville should stay informed about any potential changes to the regulatory landscape. Attending city council meetings, engaging with local officials, and connecting with other STR hosts can help owners stay ahead of any new rules that may emerge.

Starting a Short Term Rental Business in Fayetteville

As of April 2023, investors can freely start an STR business in Fayetteville without any specific licensing requirements or zoning restrictions1419. The city does not differentiate between STRs and long-term rentals in its code.

However, this may change in the near future as the city council continues to explore potential regulations14. STR operators should stay informed of any upcoming changes that could impact their business. It's advisable to engage with local officials, attend city council meetings, and voice concerns to elected representatives19.

When starting an STR, it's important to understand the general requirements that apply to all rental properties in Fayetteville. This includes37:

  • Obtaining a standard business license from the city
  • Registering the property with the Cumberland County Tax Administration
  • Complying with building codes, fire codes, and safety standards
  • Providing essential utilities and maintaining the property in a safe, habitable condition
  • Following the state's landlord-tenant laws regarding leases, security deposits, evictions, etc.
  • Collecting and remitting all applicable state and local taxes

While these requirements are not STR-specific, they provide a baseline for operating a rental property in Fayetteville. Failure to comply with these general regulations could result in penalties, even in the absence of an STR ordinance.

Prospective STR operators should also carefully research potential properties and neighborhoods to ensure they are well-suited for short-term renting. Factors to consider include:

  • Zoning district and allowed uses
  • Parking availability
  • Proximity to attractions and amenities
  • Competition from other STRs in the area
  • Potential for noise complaints or neighbor relations issues

Choosing an STR-friendly property from the outset can help prevent headaches down the road, especially if the city enacts stricter regulations in the future. Due diligence is key to success in the STR business.

Short Term Rental Licensing Requirement in Fayetteville

Currently, there are no STR-specific licensing requirements in Fayetteville419. STRs are treated the same as long-term rentals under the city's existing rental housing regulations7.

However, if Fayetteville does implement an STR ordinance in the future, it will likely include some form of licensing or registration process. Many other North Carolina cities with STR regulations require operators to obtain a permit or license from the city2912.

The details of a potential licensing process in Fayetteville are still unknown. Based on ordinances in other cities, it could involve12:

  • Submitting an application with property owner information, floor plans, parking details, etc.
  • Paying an annual licensing fee
  • Passing a building safety inspection
  • Providing proof of insurance
  • Notifying neighbors within a certain radius
  • Agreeing to occupancy limits, parking rules, and other operational standards

Some cities also have different license types or requirements based on the nature of the STR. For example, Asheville has separate permits for "homestays" (owner-occupied rentals) and "vacation rentals" (whole-unit rentals)12. Wilmington requires a special use permit for STRs in residential zones9.

If Fayetteville implements licensing, the process will likely be more involved than simply obtaining a standard business license. STR operators may need to budget for additional fees, inspections, and paperwork.

It's also common for cities to place a cap on the total number of STR licenses issued, either citywide or by neighborhood212. This could create a competitive environment where not all applicants are guaranteed a license.

For now, Fayetteville STR operators can proceed without any special licensing. But it's crucial to monitor the city's STR discussions and be prepared to adapt to any new licensing rules that may emerge. Proactively engaging with city officials and advocating for reasonable regulations can help shape the outcome.

Required Documents for Fayetteville Short Term Rentals

Since there are no STR-specific rules, the documentation requirements are the same as operating a long-term rental property4719. This includes:

  • Lease agreement: A written contract between the property owner and renter outlining the terms of the rental, such as duration, payment, rules, and responsibilities.
  • Proof of ownership: Documents showing the STR operator has the legal right to rent out the property, such as a deed, title, or tax record. If the operator is leasing the property, they may need written permission from the owner.
  • Business license: A standard business license from the City of Fayetteville, which is required for all rental properties. This is obtained through the Development Services Department.
  • Insurance: Proof of a valid insurance policy that covers the property for rental use. This may be a landlord insurance policy or a specialized vacation rental policy, depending on the insurer.
  • Tax registration: Registration with the Cumberland County Tax Administration and North Carolina Department of Revenue for the purpose of collecting and remitting occupancy taxes and sales taxes.

If Fayetteville implements STR regulations, additional documentation may be required as part of the licensing process. This could include12:

  • Application form: A city-provided form collecting details about the property owner, rental unit, local contact person, parking plan, etc.
  • Floor plan: A sketch or diagram showing the layout and dimensions of the rental unit, including bedrooms, bathrooms, exits, and smoke detectors.
  • Proof of inspection: Documentation showing the rental unit has passed a city-required building safety inspection, which may check for fire hazards, electrical issues, proper egress, handrails, etc.
  • Neighbor notification: Proof that neighbors within a certain distance have been notified of the STR, either through certified mail or a city-distributed notice.
  • Affidavit: A signed, notarized statement from the owner certifying that all information provided is true and agreeing to abide by the city's STR rules.

The specific documentation requirements will depend on how Fayetteville chooses to structure its STR ordinance. Cities take varying approaches, but the general goal is to ensure that STRs are safe, well-managed, and not negatively impacting neighborhoods.

Operators should keep meticulous records of all STR-related documents, both for compliance purposes and for their own financial and legal protection. Having a clear paper trail can help avoid disputes with renters, neighbors, or city officials.

As with licensing, it's important for Fayetteville STR operators to stay up-to-date on any changes to documentation requirements. Attending workshops, joining local host groups, and regularly checking the city's website can help ensure ongoing compliance.

Fayetteville Short Term Rental Taxes

STR operators in Fayetteville are required to collect and remit state and local sales taxes, as well as any applicable occupancy taxes219.

The combined sales tax rate in Cumberland County is 7% as of 202319. This includes:

  • 4.75% North Carolina state sales tax
  • 2.25% Cumberland County sales tax

North Carolina also assesses a statewide occupancy tax on accommodations rented for less than 90 days. The rate is currently 4.75%19. However, Cumberland County does not impose an additional occupancy tax on top of the state rate.

So in total, Fayetteville STR guests should expect to pay an 11.75% tax on their rental price (7% sales tax + 4.75% occupancy tax). For example, a $100/night rental would incur $11.75 in taxes.

STR operators are responsible for19:

  • Registering with the North Carolina Department of Revenue and obtaining a Sales and Use Tax Account ID
  • Collecting the appropriate taxes from guests as part of the rental payment
  • Filing monthly or quarterly sales tax returns, depending on sales volume
  • Remitting the taxes to the Department of Revenue by the due date

Failure to comply with tax obligations can result in penalties, interest, and legal action. The Department of Revenue has the authority to audit STR operators and pursue collections on unpaid taxes.

Some STR platforms, like Airbnb and Vrbo, have agreements with the state to automatically collect and remit taxes on behalf of hosts2. However, the host is still ultimately responsible for ensuring compliance. It's important to understand what taxes are being collected and keep records in case of discrepancies.

If Fayetteville enacts an STR ordinance, it's possible the city could impose additional taxes or fees on operators. Some cities use STR-generated revenue to fund affordable housing, tourism marketing, or neighborhood improvements12.

STR operators should consult with a tax professional to ensure they are meeting all their obligations at the federal, state, and local levels. Proper tax compliance is essential for running a legitimate and profitable STR business.

As the STR industry grows, tax authorities are increasingly cracking down on operators who fail to pay their fair share2. Fayetteville hosts who stay informed and proactively comply with tax laws will be well-positioned to avoid problems down the road.

Fayetteville-wide Short Term Rental Rules

Without any STR-specific ordinances on the books, Fayetteville defaults to the state's vacation rental laws219. Key state-level rules include:

  • No limits on the number of STRs an individual can operate
  • No restrictions on renting out an entire home vs a single room
  • STRs can be located in any zoning district that allows residential use
  • No registration or permitting requirements at the state level
  • Occupancy limits and parking rules are determined locally
  • All STRs must comply with the statewide fire code and have working smoke alarms

While these state laws provide a baseline, cities in North Carolina are allowed to impose additional regulations on STRs912. So Fayetteville's STR-friendly environment could change if the city council decides to adopt an ordinance.

Some common local regulations include2912:

  • Requiring a permit or license to operate an STR
  • Limiting the number of STRs in certain zoning districts or citywide
  • Restricting the types of properties that can be used as STRs (e.g. primary residences only)
  • Capping the number of days per year a property can be rented short-term
  • Requiring a local contact person who can respond to issues within a certain timeframe
  • Limiting the number of guests based on bedrooms or square footage
  • Mandating off-street parking spaces
  • Prohibiting events, parties, and large gatherings
  • Enforcing "quiet hours" and noise limits
  • Requiring posting of emergency contact info and rental rules inside the unit

The specifics vary widely from city to city, and the regulations are constantly evolving as communities grapple with the impacts of STRs.

In Fayetteville, the lack of local rules means STR operators have a lot of flexibility in how they run their rentals. But with that freedom comes the responsibility to be a good neighbor and minimize negative externalities.STR hosts should take proactive steps to prevent issues like noise, parking, and trash from spilling over into the surrounding community. Establishing clear house rules, screening guests, and being responsive to neighbor concerns can go a long way in maintaining positive relationships.

At the same time, it's important for hosts to advocate for reasonable and balanced regulations if the city does move forward with an ordinance. Overly restrictive rules could stifle the economic benefits of STRs without necessarily solving community issues.

By working together with city officials and residents, Fayetteville's STR stakeholders can help craft policies that promote responsible hosting, protect neighborhood character, and allow the industry to thrive. Proactive engagement and open communication will be key as the regulatory landscape continues to shift.

Does Fayetteville strictly enforce STR rules? Is Fayetteville Airbnb friendly?

Since Fayetteville does not currently have STR regulations, there is no specific enforcement happening1419. The city responds to general nuisance complaints related to STRs (noise, parking, etc) but does not proactively monitor STR activity.

Compared to other North Carolina cities that have adopted strict rules, like Asheville and Wilmington, Fayetteville is very Airbnb friendly291219. There are no major barriers for hosts looking to operate STRs.

Many hosts are openly operating STRs in Fayetteville neighborhoods, as evidenced by the 150+ active listings in 20194. The lack of regulation makes Fayetteville an attractive market for STR investing.

However, the city's hands-off approach may not last forever. As more cities in North Carolina move to regulate STRs, Fayetteville will likely feel pressure to do the same12. The failed attempt to impose regulations in 2020 shows that concerns exist in the community14.

For now though, Fayetteville remains one of the most Airbnb-friendly cities in the state. Hosts are able to operate without any added red tape or restrictions. The city seems to have embraced the economic benefits that STRs can bring.

This friendly environment has led to a proliferation of STRs in Fayetteville. According to data from AirDNA, there are an estimated 500-600 active rentals within the city limits as of 202315. That number has grown steadily in recent years.

How to Start a Short Term Rental Business in Fayetteville

  • Research the local market and regulations
  • Choose an attractive and STR-friendly property
  • Acquire the property through purchase or lease
  • Make any necessary repairs or upgrades
  • Furnish and decorate the space for STR guests
  • Photograph the property and write an appealing listing description
  • Create a listing on Airbnb, VRBO, and/or other STR platforms
  • Establish your nightly rates, minimum stays, house rules, etc.
  • Arrange for cleaning, maintenance, and guest support as needed
  • Launch your listing and start marketing to potential guests
  • Welcome your first guests and provide an excellent experience
  • Continuously improve based on guest feedback and market trends
  • Comply with all tax collection and remittance requirements
  • Stay up-to-date on any new city regulations that may emerge1419

Since Fayetteville does not currently have an STR ordinance, the startup process is relatively simple compared to highly regulated cities. Hosts can follow the normal steps for setting up a new STR without any added licensing or zoning requirements.

However, it's still important to do your due diligence and make sure the property is a good fit for STR use. Consider factors like location, amenities, parking, and neighbor relations. You want to set yourself up for success by choosing an STR-friendly property.

It's also critical to understand the financial aspects before getting started. Make sure you have a solid business plan and budget for all the costs involved (mortgage, utilities, insurance, furnishings, cleaning, repairs, etc). Many new hosts underestimate the ongoing expenses.

Finally, stay informed about any potential changes to Fayetteville's STR rules. While the city is hands-off for now, that could change at any time. Subscribe to city council agendas, connect with other local hosts, and be ready to adapt your business if needed.

Who to contact in Fayetteville about Short Term Rental Regulations and Zoning?

For questions about Fayetteville's STR rules and zoning, contact:

Fayetteville Planning & Zoning Division
433 Hay Street
Fayetteville, NC 28301
Phone: (910) 433-1612
Email: planning@ci.fay.nc.us
Website: https://fayettevillenc.gov/government/city-departments/planning-zoning[12]

The Planning & Zoning Division is responsible for administering and enforcing the city's zoning ordinance. They can provide guidance on where STRs are allowed and any zoning restrictions that may apply.

For general questions about operating a business in Fayetteville, contact:

Fayetteville Economic & Community Development Department
433 Hay Street
Fayetteville, NC 28301
Phone: (910) 433-1590
Email: econdev@ci.fay.nc.us
Website: https://fayettevillenc.gov/government/city-departments/economic-community-development

The Economic & Community Development Department handles business licenses, tax registration, and other requirements for new businesses. While there is no specific STR license, they can advise on the general process for setting up a business in the city.

To stay updated on any proposed STR regulations, monitor the Fayetteville City Council:

Fayetteville City Council
433 Hay Street
Fayetteville, NC 28301
Phone: (910) 433-1312
Website: https://fayettevillenc.gov/government/city-council

The City Council is responsible for adopting new ordinances, including any potential STR regulations. Agendas and meeting minutes are posted on their website. You can also contact the City Clerk's office with questions or to provide input.

What do Airbnb hosts in Fayetteville on Reddit and Bigger Pockets think about local regulations?

On the Bigger Pockets forums, Fayetteville Airbnb hosts express appreciation for the lack of red tape and the ease of starting an STR business19. Many see opportunity given the area's strong tourism economy and military presence.

One Fayetteville host on Reddit shared: "The STR market here is great, and the city has a hands-off approach right now. I've been operating multiple units for over a year without any major issues."1

9Another Reddit user commented: "Fayetteville is one of the best places in NC for Airbnb. No crazy regulations like some other cities. Get in while you can before things change."19The recurring sentiment is that Fayetteville offers an STR-friendly environment, especially compared to more restrictive cities in the state. Hosts appreciate being able to operate without jumping through extra hoops.

However, there is also an acknowledgement that the regulatory landscape could shift. Some hosts are concerned that Fayetteville may follow the lead of other cities and impose stricter rules in the future.

One Bigger Pockets user warned: "Enjoy the freedom while it lasts. I wouldn't be surprised if Fayetteville cracks down on STRs in the next few years. It seems to be the trend in NC."19

Another host on Reddit echoed: "I'm making hay while the sun shines, but I'm also prepared for things to change. I'm diversifying my portfolio so I'm not totally reliant on STR income."19

Overall, Fayetteville hosts seem to be capitalizing on the current opportunity but also keeping an eye on the horizon. Many are optimistic about the market's potential but realistic about the possibility of new regulations.

The key takeaway is that Fayetteville is a great place to start an STR business right now, but hosts need to stay nimble. Regulations can change quickly, so it's important to have a backup plan and be ready to adapt.

Connecting with other local hosts, either online or in person, can be a valuable way to stay informed and share strategies. The STR community in Fayetteville appears to be active and supportive.

Reveal your property’s rental profitability

Buy this property and list it on Airbnb.