Is your building being turned into a hotel? Do you even know?

When you decided to purchase an apartment building, you probably never thought you'd end up running a hotel. But this is increasingly a situation that New York City property owners are finding themselves in.

Airbnb, VRBO and similar short-term apartment rentals are the new trend in tourism. Visitors can get a home-like experience, usually for a much lower price than staying in a traditional hotel.

But, whether the spaces are being listed by you or your tenants, renting apartments to tourists may violate the law.

Many short-term rentals are illegal in NYC

In New York City, the law prohibits renting out entire apartments for durations of less than 30 days.

The goal of the law is to protect city residents in an already-tight market. Lawmakers fear that vacation rentals are taking living spaces away from permanent residents and driving up rental costs.

While city officials may have once turned a blind eye to short-term rentals that weren't causing problems, this is no longer the case. In February 2017, the city issued its first fines to two property managers. They were fined for 17 violations at $1,000 a piece. Repeat offenses face even stiffer penalties.

Be careful when getting into the vacation rental market

If you're looking to get into the short-term vacation rental market, you need to do your homework. At first glance, short-term rentals may seem like a great way to make extra income from vacant units while you search for a permanent tenant. But, it is not worth running afoul of the law.

Not all vacation rentals are banned. If you're considering using your property for a new purpose, it is always a good idea to consult with your lawyer first. Being proactive can save you a lot of time and money down the road.

Keep a close eye on your tenants

Of course, not every Airbnb rental is listed by the property owner. Sometimes tenants list their apartments without informing their landlords.

As a property owner, this can put you in a difficult situation. Your building may be in violation of the law without you even knowing. Even more, the influx of tourists could create an unpleasant environment for your long-term tenants.

This is another area in which being proactive is your best strategy. Be sure that you lease agreements specifically cover what is and is not allowed. When in doubt, many renters may adopt the philosophy of it being "better to ask forgiveness than permission."

Consider checking the popular vacation rental sites periodically to see whether any of your properties are listed, and follow up with your tenants as needed. Again, this is another area where consulting with your attorney is the best method for creating a plan of action.