How do you convert a commercial space into an Airbnb rental?

Airbnb rentals are subject to increasingly strict regulations. The cities of Paris, Lyon, and Biarritz are now subject to the principle of commercial compensation. This principle stipulates that if you want to rent out a secondary residence in these cities, you must systematically convert a commercial space into hotel-style accommodation to compensate for the "loss" of a residential unit to short-term rentals. But how do you convert a commercial space into an Airbnb rental? Let's look at the steps to follow to carry out such a transformation.

Step 1: Research to ensure you can convert the commercial space into hotel-style accommodation

Before diving headfirst into renovation work, it is imperative that you are in compliance to carry out these works and that you have obtained all necessary authorizations from the town hall to which the commercial space belongs. To do this, you must research various aspects that could conflict with the realization of your project.

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Consult the Local Urban Plan

First, to know if it is possible to carry out this type of transformation, you will need to consult the Local Urban Plan (PLU). This document allows you to know to what extent it is possible to convert a commercial space into hotel-style accommodation. Depending on the rules it contains and for various reasons, a prohibition on transformation could prevent you from successfully completing your project. Also, the PLU includes the architectural standards to which you will potentially have to comply.

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Consult the co-ownership rules

Next, if the PLU allows it but the space is located in a building under co-ownership, you will need to consult the co-ownership rules to see if the transformation is possible. If the rules prohibit it, you can still try to obtain the agreement of the co-ownership by submitting your project during a general meeting and obtaining a unanimous vote of approval.

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Consult the commercial lease

Finally, due to the nature of the space you wish to transform, it may still be under a commercial lease. To subsequently obtain authorization from the town hall to carry out the transformation of the commercial space, this commercial lease must no longer be active. Otherwise, the space cannot be considered hotel-style accommodation. There are two solutions for terminating this lease:

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• Terminate the commercial lease immediately: In this case, you will have to pay compensation to the current tenant or offer them a replacement space.

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• Refuse to renew the lease: In this case, it involves waiting for the end of the commercial lease and refusing to renew it. Here, you will not have to pay any compensation to the tenant.

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Step 2: Obtain the necessary authorizations to carry out the transformation of the commercial space

Once you have conducted your research and it is possible for you to transform a commercial space into hotel-style accommodation, you will need to file an urban planning authorization request with the town hall. This request also serves as a request for a change of use. Depending on your project and your needs in terms of work, this request will take different forms:

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• If you are not modifying the structure or the facade of the building, the urban planning and change of use authorization takes the form of a prior declaration of works. The prior declaration of works submission form must be filled out and filed with the town hall.

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• If you are modifying the structure and/or the facade of the building, the urban planning and change of use authorization takes the form of a building permit application. The building permit application form must be filled out and filed with the town hall.

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Also note that if your space has a floor area of more than 150 square meters, you will be required to hire an architect. This may be the case for a co-living project.

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Once your request has been filed with the town hall, a certain amount of time is required to process the application. Allow one month to obtain the development authorization following a prior declaration of works, and allow two to three months to obtain authorization after submitting a building permit. It is important to anticipate these timeframes when planning your project timeline.

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Step 3: Inform the land registry office of the change of use of the commercial space into hotel-style accommodation

The land registry office must also be informed of the change of use of a commercial space into hotel-style accommodation. Indeed, the nature of a space must also be defined with the tax entities that determine property taxes.

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As a commercial space, the owner must pay the territorial economic contribution but as a residential property, the owner pays the well-known housing tax. Even if it is the same location, the total amount is not the same and is calculated based on the cadastral rental value.

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To make this change with the office, simply fill out the provided form and send it by registered mail with acknowledgment of receipt or drop it off directly at the land registry office to which the property belongs. This change must be made within three months after the change of use.

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Step 4: carry out the work required to accommodate tenants in a commercial space converted into hotel-style lodging

That’s it! After all these steps, you can finally start the work. Before thinking about the decor and the color of the walls, you must ensure that you comply with habitability standards. These include, in particular, the presence of a plumbing system for water, connection to the electrical grid, at least one source of natural light, and an air renewal system. Furthermore, for a property offered for rent, you must also comply with the legal obligations related to providing decent housing.

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Note that with the new energy consumption standards linked to the new Energy Performance Certificate (DPE) and the new regulations for rentals rated F and G, we advise you, from the start of your renovation work, to opt for a good insulation, heating, and air renewal system (ventilation and openings).

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For an Airbnb rental, certain additional items must be provided. These are essentially items and equipment that contribute to the smooth running of the tenants' stay and are common sense. Among these equipment and amenities are:

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• A kitchen equipped with at least a microwave, a coffee maker, a kettle, a refrigerator, and dishes. You will delight your tenants if you add an oven, a dishwasher, and a stovetop.

• A bathroom with a shower and/or a bathtub, a sink with a mirror, and storage. The plus in the bathroom: a washing machine. The luxury in a vacation rental: a dryer.

• A bed with bedding

• Chairs and a table

• A lounge area (depending on the space) with a television. Even better if it provides access to streaming channels.

• Curtains, at least on windows that could affect the quality of the travelers' sleep

• Storage: shelves, drawers, a wardrobe, dressers, under-bed storage, a nightstand—the possibilities are endless.

• Cleaning products and appliances: sponge, towel, dishcloth, vacuum cleaner, mop.

• An internet connection

• A smoke detector

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Step 5: list your newly transformed property as an Airbnb rental

Once your work is finished, you can finally list your property for short-term rental! But here again, you must follow certain administrative procedures. There is generally the declaration as a furnished tourist accommodation and obtaining the registration number. In some cities, for secondary residences, there is sometimes a requirement to apply for authorization for change of use.

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To support you in your efforts and help you make your rental profitable, Airbnb concierge services like Welkeys exist. Entrusting your property to a seasonal rental management agency relieves you of the burden and saves you time! No need to manage tenants, no need to clean the property between bookings, and no need to remain available to answer tenant requests—we do all of that for you! With our comprehensive rental management offer, we optimize your rental income and maximize your bookings all year round.

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