Debi Hertert of HostingYourHome.com leads a panel discussion about money matters with Airbnb hosts from Portland. This episode was requested by Marcus, one of Debi’s listeners, who wanted to know about the financial aspect of hosting. The discussion covers initial setup costs, gross income, taxes, expenses, how much time is involved, and what difference the income has made in each person’s life. This is a longer episode than most but allows you to hear several viewpoints.
Each person on the panel has Airbnb’s top “Superhost” designation of quality and volume of guest activity. So the numbers on this show won’t match up with an overall average of all hosts but the concepts are the same. Another topic discussed is occupancy rate. It varies a lot among the panelists. Many factors are involved: location, type of listing, allowing single night stays Y/N, using instant book Y/N, number and quality of reviews, how high the company’s secret search algorithm shows your listing, how many nights the owner blocks off for personal use or maintenance, etc.
You will hear a variety of approaches for income taxes, because it’s a complicated subject, and if you are a host, should inspire you to get an accountant familiar with rental activities. In most cities, Portland included, owners of short-term rentals are required to pay occupancy taxes. In Portland, Airbnb collects and pays these taxes and the owners never see or get involved with them. It is a simple, elegant solution. Some other rental platforms, notably Home Away and VRBO do not collect or pay these taxes. This negligence makes a complex process for the owner, and the City, County and State doubtless lose a lot of deserved tax revenue.
One of the big complaints all over the world about the “Sharing Economy” companies is that they don’t facilitate the tax collection process. And why shouldn’t there be complaints? It is simple for the company to collect and pay the taxes directly, and proper for them to take care of this obligation.
Cities need to allow short-term rental activity (at least for owner-occupied homes).
Owners who earn money from their rentals need to pay occupancy taxes.
“Sharing” Companies need to meet their responsibilities here and make it easy for owners and municipalities.
This is the first episode in the “Nuts&Bolts” series that addresses issues that come up when people rent their spaces to others.