🏚️ Can’t Rent Your Vacation Home Anymore? Here’s What to Do Instead.

Hi -
You bought the dream: a $600k beach house, Airbnb money rolling in, and maybe some wine-fueled weekends in the off-season.

But now? The rules are changing — and fast.

📉 STRs Still Work — But Not Everywhere

Let’s be clear: short-term rentals (STRs) aren’t dead. In plenty of towns, they’re still a strong strategy — especially when held in an LLC and split among a few savvy owners who can share use and reap the tax benefits (depreciation, deductions, income).

But…

Across the Carolinas (and beyond), we’re seeing a different story in many desirable spots:

• STR bans in residential zones

• Permits that don’t transfer when you sell

• Owner-occupied-only rental restrictions

• HOA amendments that block STRs entirely

If you bought the house expecting rental income — and now can’t legally rent it — you’re stuck holding the bag.

🔁 Your Backup Plan: Fractional Co-Ownership

If you can’t rent your second home anymore, but still love it — there’s a smarter path: fractional co-ownership through an LLC.

No renters. No permits. No zoning drama. Just shared ownership with a few other aligned owners who love the home as much as you do.

Here’s how it works:

• Transfer the home into an LLC

• Sell off 1/8, 1/6, or 1/4 ownership shares

• Each owner gets exclusive use weeks per year

• All costs (taxes, insurance, repairs) are split

No Airbnb listings. No permit headaches. No revolving-door guests.

🤔 What You Gain (and What You Give Up)

If STRs are no longer allowed in your area, here's the tradeoff:

• ✅ You keep access to your second home

• ✅ You reduce your costs dramatically

• ✅ You avoid the legal mess of non-compliant renting

• ✅ You still hold a real ownership stake — not a timeshare

• ❌ You lose the rental income

• ❌ You lose depreciation/tax deductions (unless you're renting legally)

But remember: this solution is for people who can’t legally STR — not those in friendly markets where it’s business as usual.

📊 Quick Comparison

📌 Important Caveat

LLCs can support STR ownership — and in friendly markets, they absolutely should. The benefits are real:

• Pass-through income

• 100% bonus depreciation

• Clean equity sharing between multiple members

But when STRs are banned or blocked — whether by zoning, permits, or HOA rules — the LLC co-ownership model still holds up beautifully as a lifestyle play. No income, sure. But also: no stress, no strangers, and a shared cost structure that works.

🏁 Bottom Line

If you’re stuck with a non-rentable STR, co-ownership can allow you to keep the house, keep the access, and get out from under 100% of the expense.

It’s not about giving up — it’s about pivoting smart.

—Doug

Want to run the numbers on your house? Or hear how other owners are doing this? Hit reply. I’m happy to talk through it.

Disclaimer: Not legal or tax advice. I’m not a CPA — just a guy who’s been around the beach block a few times. Always talk to your attorney or accountant before making big real estate moves.

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