Working Through All the Red Tape

November 15, 2022

Working Through All the Red Tape

There are always obstacles. That’s life, right? Get knocked down three times, get up four. Failure is one of the risks, but that just makes the reward sweeter, right? When I had the vision for my second home, I could not imagine the amount of behind the scenes work this would entail. There were so many obstacles on getting this home up and running. The thought was already scary and I wasn’t sure if the risk was worth it, but I thought, “Why not? What’s the worst that could happen?”

I wanted to touch on this part because a lot of people see the end result of a project and don’t truly understand the amount of red tape there was going to be during this process. I didn’t even comprehend or anticipate how much time and work it would take as well. I did try to time the process and legalities and had a set goal time. I wanted to have everything up and running before my first mortgage payment. I have already spent several weeks going back and forth from Clarksville to Chattanooga finishing up the home, so mentally I was already exhausted.

What I meant by “red tape” was I didn’t just furnish this home and list it on a STVR online. Short term rentals are heavily regulated in a lot of major cities. I’m not going to get into bureaucracy of why, but I honestly don’t care why, it just is. We have heard the stories of parties getting out of control and guests destroying property. Or maybe you have stayed in a rental that didn’t seem safe or up to code. These are examples of what the cities are trying to avoid, and I do not want my personal home and investment destroyed.

*Disclaimer* All of the struggles I list are specific to this particular market. Every state, city, and county is different and you should research and look up the laws before hand.

As a licensed realtor, one of the first conversations I have with a buyer looking for a home are the specifics of what they are looking for. This gives us both an idea of what they are wanting in a home: garage, land, size kitchen, bedrooms, bath, age of home etc. This also tells me what I need to keep them accountable for. There are so many options to look at when searching for a home so this list also helps me keep them focused on what they are truly wanting or looking for. There are also a list of nonnegotiable’s. An example of this is a client with a dog. A non negotiable for them may be a home with a fence, or an HOA with no pet restrictions. The one nonnegotiable item for me when buying the home is the location. This home had to be in the Overlay. The Overlay is an area in Hamilton County that can be used for any short term rental. This is the first tape obstacle that I encountered.

This home is going to be a second home for me and my family, but it also needs to be income producing. I would realistically only go a few times a year, so having it as a short term rental is a no brainer for me. It took a bit to find a home in the Overlay and I got it under contract, thanks to my amazing realtor in Chattanooga. We got it closed and I rented it out as an Airbnb. Well, not exactly. After it was closed there was a lot more work to be done. Not only cosmetic work to put my personal touch on it, but also there was a list of qualifications I needed to take care of before we could get to that last step.

  • This is a list of the process of getting from Ownership to short term vacation rental.
    • Application
    • Department Review
    • Opposition Period
    • Building Inspection
    • Final Approval

Application. First, I had to apply through the city for a short term vacation rental (STVR). This application was a registered online portal and it is not as easy as simply filling out a rental application it also required quite a bit of documentation. I needed to fill out the application and provide proof of ownership and insurance. I also had to apply for a business license. I did have to do some quick research (google search) on the category of the business license I needed. It would take a few days for my application to be accepted and also get the verification mailed to me. A STVR also needs a floor plan submitted. This plan had to include all exits, fire alarms, and carbon monoxide alarms labeled on the map. I ended up using the floor plan from my home appraisal on my purchase and just added lines for rooms and labeled everything needed. It took close to a week for me to finish the application process.

Department Review. After you turn in your application it is carefully reviewed by the city. I did go back and forth with my application because the business license I acquired was not correct. I got a county business license instead of the city license this particular needed. This was a very easy fix and I applied for a new one, online. The communication on the portal was very easy and they were helpful with getting this error corrected. Once it is approved by the city, this is when you paid the application fee of $150. There is also an annual renewal fee for the application, as well as the business license you just acquired.

Opposition Period. The next step was the scariest step of the process. I had to pick up a sign from the city to place in my yard. This sign is the “STVR notice sign”, which lets all of the neighbors know that this home would be a STVR and if they didn’t like it, they could call the number on the sign and object to this plan. This sign had to stay in the yard for 15 days and the 16th day it could be taken down. After the sign is taken down, there is an additional 15 days (30 days total) for anyone to object. This period is called the opposition period and more than four objections would not allow me to move forward. I ended the opposition period with NO complaints.

Inspection. During the opposition period, your home is ready to be scheduled for an inspection while you wait for the total thirty day wait period. The inspection is also done by the city. I do not have the specifics of what they are looking for because I actually did not have to have one done because this home was new construction, but I imagine that it is to check and make sure the home is safe and up to code, but also that your fire and carbon monoxide alarms are working properly. I also had to attach an Egress Plan. An Egress plan is a map of a facility that houses critical indicators such as posted emergency routes, evacuation paths and red exit signs that lead to stairs and doorways.

Getting it all up and running was a challenger. There was a lot I did not expect to do such as turning in a floor plan or getting a business license. It was not hard, but more of an extra effort. My point is that these tasks were challenging but not impossible. In this situation, I had to keep myself accountable and focused. I was on a time limit and wasn’t expecting the 30 day opposition period, which put me over my target date to get everything up and running. Flexibility is key in this business, or in life. I keep the end goal in mind and that is what kept me pushing through.

“Actually, I can”

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