All Forum Posts by: Ashley Rothacker

Hello! We purchased and started renting out a short term rental in 2019. There was about a period of 1-2 months that we worked on getting the house fixed up and furnished prior to listing aka the pre-revenue stage. 

I'm trying to understand how to properly write off/capitalize these expenses on Schedule E. From what I understand, you can write off up to $5000 in startup costs and depreciate the remaining?

Where is Schedule E do you write off the $5000? Is it under miscellaneous expenses? Thanks!

Yeah I was able to figure out how to make it match based on that logic. I'll just have to update my spreadsheet I use to track monthly/year performance. It really only affects December/January numbers so not a huge deal. Thank you both! 

@Luke Carl I'm actually referring to income tax and not so much month to month but what's reported from an annual standpoint. For example earnings from a reservation on December 31st weren't included in Airbnb's reporting earnings for me in 2019 (because it was paid out in January) but I include it in mine since I technically earned it in December. Again, it's a really small difference (about $300) but figured I'd pose the question. 

This may be a silly question but for tax reporting purposes does your earnings need to match exactly to what Airbnb is  reporting? Reason I ask is that I've been tracking earnings based on when they are earned whereas Airbnb seems to base it off of the actual payout date. Really the only discrepancy comes when a reservation takes place over two months i.e. 30th-2nd so not sure if it's a big deal or not!

Thanks!

@Andrea Cole Going through the same thoughts right now as I just got my first cancellation request due to the virus. They were coming into town this month for an event at the local college, and that college unfortunately closed for the rest of the semester. A lot of guests come in for similar reasons so worried this is just the start. I feel like it'd be hard to get the guests to understand the rationale behind not giving a full refund though unless they are a host themselves...

We use the Nest/Yale lock and iGMS for our automated messages. iGMS has the capability to pull the last 4 digits of the guest's phone number for the code. Then you'll have to set it up in Nest each time. We were doing that for awhile but there were a few times we ran into an issue where the code just flat out didn't work for check in. Not sure if Nest couldn't handle the volume of all the different codes, or if it was human error...but we ended up switching to one code and haven't had issues since. @Luke Carl

Hey Jacci! Yeah that's what I was thinking that a REIT may not make sense at this point since we are still small. When you say to do a separate agreement for each property, are you talking about a separate LLC for each or something more simple like a personal contract (if that's even an option)?

Doing a separate LLC for each property feels like a bit overkill. Could you not have one LLC and then separate agreements under that for each property? I guess the risk is higher when everything is under one though..

Yup they do. As long as my underlying insurance covers short term rentals then they do as well. I may end up switching over to Proper or Foremost anyways just to have less insurance companies to deal with :) 

Would it be more a securities attorney versus a real estate attorney that could help out with this? I do still feel a little lost on how to properly go about it, especially since we're borrowing smaller amounts at this point and from friends/family members. 

Yeah it's definitely a good deal for him as we are taking on the burden of the loan. However, we do take a management fee off of his profit so it helps our return as well :)