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What a New Airbnb Law Means for Your Mortgage - Quicken Loans Zing Blog

Short-term rentals just got sweeter for Arizonans searching for additional income streams in the new year. As of January 1, 2017, cities and counties across Arizona can no longer limit short-term rentals. With the new Arizona Airbnb law, there is now no minimum stay requirement for rentals, opening the door for homeowners to engage in the short-term rental market.

More Opportunity for Short-Term Rentals

According to the Arizona Daily Sun, with the new law enacted, the number of properties that can be purchased as well as the rental period duration are no longer obstacles to local investors. So vacation rentals across Arizona no longer have to have a minimum stay requirement, creating more opportunity for tourists interested short-term rental services such as Airbnb.

The new law allows for “financial breathing room,” opening up opportunities for homeowners to earn extra income, said Arizona Gov. Doug Ducey in the Arizona Daily Sun.

However, restrictions on rentals still apply if you live in a community with a homeowners association (HOA). “The HOA rules will always trump the city or state regulations,” says Jason Mitchell, president and founder of The Jason Mitchell Group. “If your HOA says you must have a minimum of a 30-day stay, then you have to abide by those rules,” affirms Mitchell.

National Impact?

Could the new Arizona rental law result in similar legislation in other states with a flourishing tourism industry?

“When you hit a place where tourism is important, and you get a lot of snow birds and people that come in for two or three months, you will see a lot of laws start to develop,” says Mitchell.

According to Quicken Loans President and Chief Operating Officer Bob Walters, rental laws like this have benefits for communities but also a few disadvantages. “The good is that it increases the value of a property that will be used for rental by expanding the amount of time it could be rented out,” says Walters.

“The downside is homeowners who don’t rent their homes may have to contend with a home next door that consistently sees different people coming and going as the house renters come and go,” he adds.

“What this new law does allow is for the city to bring in a lot of tax revenue,” Mitchell explains. As a result, areas with a substantial tourist stream could begin opening up the short-term rental market to increase revenue from taxes. And as Walters points out, “from a home value standpoint – it should increase the value in rental-heavy communities.”

Thinking of Renting Out Your Home?

Are you thinking of converting your home into a rental? When setting up shop for short-term renters, keep the following three things in mind:

New Laws

Mitchell recommends closely following new legislation in your state, as bylaws can add complexity to rental laws. You’ll want to know if and how your investment property could be affected by new legislation.


It’s important to know your neighborhood’s zoning restrictions. Is your community zoned for short-term rentals? If not, you could end up paying fines if you sign your home up for Airbnb or join another short-term rental service. “If you live in a HOA, you risk fines from them as well,” cautions Mitchell.


Do you have owner-occupied or long-term rental insurance? Damage incurred with short-term rentals probably won’t be covered by these insurance plans. “Airbnb offers a ‘host guarantee’ but it is not designed to replace proper coverage and it doesn’t cover liability at all,” says Mitchell. If your rental will double as your primary residence, consider investing in vacation rental insurance to ensure comprehensive coverage.

If you’re ready to buy a house, the type of property that you’re purchasing can affect your mortgage interest rate. Investment properties are often more expensive to finance because of the higher interest rates on their loans. As a result, buyers need to have a higher credit score than is generally required for a primary residence. Sign up with Rocket HomesSM to better understand your credit and how you can impact it.

Have you thought about turning your home into a short-term rental? What questions do you have? Let us know in the comments!

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