Existing home sales came in at a whopping 6,850,000, beating estimates with the highest print since 2006. Days on market fell from 36 days to 21 days on a year-over-year basis. Cash buyers remain at
Dont Rent Out Your Home On Airbnb Before You Read This
Dated: July 9 2018
You'd be hard-pressed these days to find any homeowners who haven't considered renting out their home on Airbnb or a similar site—it's certainly tempting to make extra cash on a room that's just sitting empty. And if you're out of town this summer anyway, why not have someone basically pay you to housesit?
But listing your home on Airbnb isn't quite as easy as snapping some photos and posting them online. Many cities across the globe have regulated the short-term lodging service in order to keep guests and homeowners safe and honest. Navigating these rules might seem daunting, but we've broken down the basics that first-timers need to know right here—a beginner's guide to hosting on Airbnb.
1. Follow hosting etiquette
Airbnb has a list of hosting standards that cover everything from communication to cleanliness, explains Shannon Hyde, the global operations manager at GuestReady, an Airbnb management company with locations across the globe.
Think you can just offer up a bed and be done with it? Nope. You need to make sure you've provided essential items such as toilet paper, soap, and linens for each booked guest.
And even though your plans might change, you'll want to avoid canceling on your guests at any time.
While these aren’t "rules" in the sense that they’re enforceable or come with penalties for violating them, they will have a major impact on the success of your hosting endeavor.
2. Safety is your responsibility
If you're a U.S.-based host, you'll also want to take a close look at Airbnb's guide to responsible hosting in the United States. You'll need to do your due diligence to prepare guests for emergency situations (e.g., providing a first-aid kit and a list of emergency numbers that includes the nearest hospital), and stay up to code when it comes to smoke and carbon monoxide detectors.
3. Permits might be required
This hosting thing doesn't come without its costs to you. That's only fair, right? As Airbnb notes, most cities require hosts to apply (and usually pay a fee) for permits or registrations in order to legally rent out their home—even if it's just for a few days. Don't even think about skirting this.
“Ensure you look up any permitting, zoning, safety, and health regulations that may apply,” the service's site notes, directing users to explore the specific government agencies that regulate the use of property in their particular town or city.
4. There's a limit to how long you can host
Have a guesthouse or second property that you want to make a permanent Airbnb offering? Before you fancy yourself Scrooge McDuck swimming in a pond of money, know this: There are usually rules on how long you can rent out your house.
While each city is different, Stephen Fishman, a lawyer who specializes in tax and business law, says you should verify the following information:
How many days a year homeowners are allowed to rent to short-term guests?
How many consecutive days homeowners can rent to short-term guests?
Why does it matter? In some cities and states, guests who stay in a home for a certain number of consecutive days are able to be considered tenants. That means that you'd have to go through a complicated eviction process in the event they don't want to leave—in other words, you could have a squatter nightmare on your hands.
If you don't comply with your city's regulations, you could also face hefty fines. Just last year, a woman in Trump Tower was fined $1,000 for violating New York's recent ban on short-term rentals.
Avoid the hassle by finding the cutoff date in your jurisdiction—and don't let anyone stay longer than that. No exceptions.
5. HOA and co-op rules might apply
Like cities, homeowners associations and co-ops take a different approach to regulating short-term rentals. Some places might have no rules at all, while others can ban subleasing altogether.
Even if your community doesn't have specific rules regarding short-term rentals, there are often clauses regarding following local regulations and zoning laws. That means hosts can be on the hook—not only with the city but also with their HOA—if they don't follow the law.
6. Rental income has to be reported…
Any profits you earn from renting out your home are subject to income tax. Before tax time rolls around, make sure you do your homework about how to report rental income.
One big thing to know: If you're a U.S. citizen, you're subject to income tax—even if your property is located outside the U.S. If you're from outside the U.S. but have a U.S.-based property? Well, you'll pay taxes on that, too.
7. ... but deductions are available
Anything you buy for your rental listing is deductible—even the hosting fees you pay to Airbnb. If you put together a bundle of soaps and shampoos for guests, set out coffee and juice in the morning, or buy extra linens, all of those things can be written off your taxes.
You can even deduct a portion of the depreciation of your home, which is based on the number of days each year the property is rented out and whether or not it’s the whole home or just a room or two.
You can also write off any necessary repairs to keep your rental up to snuff. The key is documenting everything.
“It’s important to track everything and keep all of your receipts, even if it’s just in a spreadsheet or something like that,” Fishman says. "People can get in trouble if they don’t have records."
Since tax law is always changing, consult a professional to make sure you're taking advantage of all possible tax breaks—and not breaking the law.
For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 25+ years in the industry, Mark has gained experience in....
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