Here's the fastest way to lose money in this business: buy a great property in a market where you can't legally operate it. It happens constantly, and it's 100% preventable with a check that takes minutes, not weeks.
What to verify before you ever make an offer
- Is it legal at all? Some cities ban non-owner-occupied STRs outright. Others allow them only in certain zones. Check the city AND the county — they can disagree.
- Permits and caps. Many markets require a permit or license, and some cap the total number issued. A "legal" market with a closed waitlist is a banned market for you.
- HOA rules. The city can say yes while the HOA says no — and the HOA wins. Read the covenants before you offer, not after.
- Owner-occupancy and minimum-stay rules. Some markets only allow STRs in your primary residence, or force 30+ night minimums. That changes your model entirely (remember mid-term from Lesson 2).
- Rule-change risk. Regulations shift after you buy. Markets with existing permit regimes and grandfathering history are generally safer bets than ones that haven't regulated yet — and you should know your fallback plan either way.
Go deeper
ACTION: Run all 3 of your shortlisted markets through the Regulation Checker. Cut any market where STRs are banned or permits are capped and waitlisted.
The next four lessons are where money changes hands — and local permit rules are exactly where an STR-specialized agent earns their keep. When you're ready to buy, get matched free with an STR-specialized agent in your target market.
Next lesson: how to underwrite a deal like an investor — including the expenses that quietly kill "great" deals.