The city votes on a permit cap in March. He wants me signed in January.

Question

An owner of two units near me asked me to take over management starting February. Both are permitted today. The city has a proposal on the agenda for March that would cap the total number of short-term permits and, from what I can tell reading the draft, would not renew permits on properties where the owner doesn't live in the city. This owner lives two states away.

So the units are legal now and might not be legal in July. Nobody I've asked will tell me how the vote goes, and I've stopped asking.

One view is that I sign. Five months of fee income is five months of fee income, the units may well get grandfathered, and if the cap passes I'm the person who knows the ordinance cold and can help him convert to 30-plus day stays or sell. Co-hosts who understand the rules are worth more in a tightening market, not less.

The other view is that I'd be building a book on a property that has a known expiration risk, spending my setup effort, my cleaner's schedule, and my listing photos budget on something that could evaporate in month six. I've got limited hours and there are owners in the next county over where the rules are settled.

There's a middle where I sign a short term with a higher fee, or a setup fee up front that covers my onboarding cost regardless. Not sure the owner takes that deal.

How would you play it? I'm not going to pretend I know how the vote lands.

jessreyes12 · Answer

The question I'd ask before anything else is what the draft says about existing permits. Grandfathering language is the whole deal, and drafts usually have some. If it's silent, that's an answer too.

paulgrant17 · Answer

@compass beat me to it. Also, has the owner read the draft? Because if he hasn't, the first thing you're selling him is that you did.

luis_carrera · Answer

Charge the setup fee. You've named your own real cost, photos and cleaner onboarding and listing build, and there's no reason that sits on your side of the table when the risk is on his property.

tashaford30 · Answer

Would an owner actually pay a setup fee in a market where co-hosts compete for units? Genuinely asking, I don't know what's normal.

marcus_hale41 · Answer

@quill they pay it when the alternative is nobody good takes the job. In a tightening market fewer co-hosts want the exposure, which is exactly when you can ask.

The part I'd underwrite is what happens after. If the cap passes and he goes to 30 day minimum stays, does your fee structure still make sense? Mid-term is a different business at a different rate, and you'd be renegotiating from a weak spot in July.

chriswalton8 · Answer

Write the conversion into the agreement now. If the property has to go 30 day minimum, fee moves to X. You'll never get a cleaner moment to agree that than before either of you knows the outcome.

tylerbrooks9 · Answer

Five months of income against a full setup doesn't sound like income to me, it sounds like a job you pay to do. Depends entirely on what your setup actually costs in hours.

sonia_alvarez · Answer

The permit risk is his and the labor risk is yours, and right now the contract as described splits those the wrong way. Fix that and the vote matters less.

priya_n21 · Answer

Wouldn't a cap that grandfathers existing permits make the surviving units more valuable? Fewer competitors, same demand. If that's how it lands he'll want a good co-host more than ever.

megan_doyle15 · Answer

@marlow that's the scenario where signing looks smart in hindsight. The one where he's out-of-state and non-owner-occupied is the specific thing the draft targets though, which is what makes it uncomfortable.

The city votes on a permit cap in March. He wants me signed in January.

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