All Forum Posts by: Cole Simpson

Nothing stresses out a host more than short-term rental taxes.

A deduction is an expense you spend on your short-term rental business that can lower your taxable income. This is a good thing! The more deductions you report, the lower your taxes are.

Before recognizing what you can deduct, you will need to decide if your property will be taxed under Schedule C (1040) or Schedule E (1040). ⁣

For some STR hosts, rental income is passive income. Passive income falls under Schedule E, which does not subject to self-employment taxes (15.3%).

In certain cases, hosts will need to file a Schedule C to reflect their STR property if it is considered active.

Publication 925 which addresses active businesses states that if the average rental period is less than 7days, a Taxpayer may elect active treatment and file a Schedule C.

Schedule C (1040): You will use Schedule C if your property is your main source of income or is part of a vacation rental business or trade. Schedule C applies to hosts that offer additional services such as daily maid service or linen changes. If your property offers this, the IRS views your rental as a hotel service.⁣
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Schedule E (1040): This form is for hosts whose short-term rentals are passive income, or “a side hustle”, and may not be their primary source of income, or they do not provide hotel-level service. ⁣
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Deduction examples for hosts using Schedule C & E⁣
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- Advertising and marketing⁣
- Auto and travel⁣
- Commissions paid to vacation rental platforms⁣
- Cleaning and maintenance⁣
- Depreciation⁣
- Host service fees⁣
- Legal and professional fees⁣
- Management fees – This is where you write off services like Host Tools that help you automate your short-term rentals!⁣
- Mortgage interest⁣
- Office supplies⁣
- Real estate taxes⁣
- Repairs⁣
- Utilities⁣

Let me know your thoughts!

Zillow ranked Charlotte as the fifth hottest market in the country for 2022 while PropertyShark listed Charlotte as the No.1 cheapest city to live in with the best weather. ⁣
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Compared to other large cities, Charlotte has the most affordable housing and most mild weather, according to Forbes.⁣
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The market will still favor sellers, and buyers should anticipate challenges. But it is possible to buy a house in this market, you just have to come ready with your game face on.⁣

The median price for a home in Charlotte is $409,327 up from $348,739 a year ago, according to the latest from Canopy. That's a 17.4% price increase.

As Charlotte continues its ascent as a premier destination for people to live, the imbalance in supply and demand will persist. Interest rates will cool demand to some degree, but not enough to balance the market.

This year buyers will be a bit more selective, so really preparing your home for the market is important, and overpricing your home initially could actually end up hitting your bottom line.

What are your thoughts?

The homebuyers in the Charlotte housing market have dealt with a persistent seller’s market, which has shrunk inventory and driven up home prices.⁣
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Charlotte's real estate market continues to boom without being affected by the pandemic. Homes are selling quickly, inventory is low and prices are rising fast.⁣
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Continuing the Charlotte-area housing market's hot streak, home sales and the median price paid for those homes rise in October 2021. ⁣
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Low mortgage interest rates, high demand, and a shortage of homes continue to fuel the Charlotte real estate market and drive prices higher. ⁣
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Charlotte is a magnet for newcomers, which means there will be enough demand to keep home prices from falling too far. It is seeing an influx of new residents from expensive cities in the North and West.⁣
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Here are more stats from the Charlotte housing market >>>>

Median home value: $343,760

Median list price: $412,156

1-Year appreciation rate: +25.0%

Median home value (1-year forecast): +21.0%

Months of supply: 0.7 (-46.2% year over year)

New listings: 4,513 (+8.7% year over year)

Pending sales: 4,751 (+11.9% year over year)

Closed sales: 4,604 (+2.1% year over year)

Days on market: 20 (-23.1% year over year)

Median rent: $1,693 (+15.5% year over year)

Price to rent ratio: 16.92

Unemployment rate: 3.3% (latest estimate by the Bureau of Labor Statistics)

Population: 885,708 (Latest estimate by the U.S Census Bureau)

Median household income: $62,817 (latest estimate by the U.S Census Bureau)

2022 U.S Short-Term Rental Outlook: Industry Maintains Momentum In An Uncertain Era

Average earnings for U.S. short-term rentals grew to their highest ever in 2021, a full 35% higher than at the start of the pandemic, and even outpaced home prices, which have risen 24.8% over the same period.

On average, a listing earned around 26.2% more revenue in 2021 compared to 2020.

The pandemic has accelerated short-term rentals into the mainstream. Demand is already 10% higher than pre-pandemic, and the industry is generating 40% more revenue, all with 10% fewer listings.

"Demand for unique travel experiences and flexible work, coupled with favorable economic conditions for homebuyers has created greater interest to invest in vacation rentals", said Scott Shatford, AirDNA's CEO. "With over 6 million existing-home sales expected in 2022, there will be many opportunities for growing short-term rental markets in the U.S."

AirDNA's Industry Outlook forecasts that U.S short-term rentals will reach 2.6% more demand in 2021 vs 2019, and expect 14.1% more growth in 2022 vs 2021.

Airbnb takes an active role in improving its platform for both hosts and guests.

In the Q3 earnings report, the company had already rolled out more than 150 upgrades to its platform.

In early January, CEO Brian Chesky even took to Twitter, asking what the company could do to improve in 2022.

After receiving 4,000 responses, he posted the top six suggestions and stated that the company is working on all of them.

Granted, a few tweets aren't an investment thesis, but it does show management's willingness to hear from its customers and respond accordingly.

What are your thoughts on this?

Landlords saw a real mixed bag in 2021. On the one hand, eviction bans left many stuck with nonpaying tenants, and bills just piling up. On the other, rents skyrocketed, and the red-hot housing market kept demand for rental housing high for much of the year.

There's no telling what's in store for 2023, but if one thing's for sure, it's that landlords need to be prepared -- for basically anything.

Want to safeguard your rental property business? 

Here are the five tasks you'll want to tackle.

1. Strengthen your tenant-screening process

2. Re-evaluate your rent

3. Start saving

4. Plan your updates and repairs now

5. Consider diversifying.

Hope this helps!

You’ve got a house to sell, and you’ve listed it.

Now what?

With so many homes on the market, how do you make sure your listing isn’t drowned out by all the noise?

It’s not an easy task to market your listing in a way that will get it noticed.

However, here are some relatively simple real estate listing tips for getting that listing noticed, and sold, faster.

1. SEO keeps you right at the top

2. A picture is worth a thousand words

3. Reach with emails

4. Use the power of social media

5. Networking

6. Cold calls may open doors

7. Refresh past contacts

8. Attract people with an open house

9. Perseverance

10. Competitive pricing

What are your thoughts on this?

Couples that are looking for a romantic getaway are a big market segment of the vacation rental industry and, in order to appeal to them, you should consider adapting your holiday home to respond to their needs.

But how do you do it?

What are couples on a romantic vacation looking for and what needs are specific to this group of travelers?

How can you offer an amazing experience?

Here's what you should think about when targeting couples for your vacation rentals.

1. Craft a romantic description and present beautiful pictures.

2. Offer specials and promotions.

3. Provide relaxation and a spa experience.

4. Set the mood.

5. Take care of their privacy and security.

6. Create guides for romantic couples.

7. Offer additional services.

Anything you'd like to add to this?

While 2021 was filled with hope and optimism for the industry, 2022 is going to be even better for travel and short-term rentals alike.

As more people and their children are getting vaccinated, they are also gaining confidence in traveling and have started to make plans.

And in November 2021, the US lifted its international travel ban and re-opened its borders to fully vaccinated foreign tourists.

Because of these trends, this year is bound to be a booming time for travel, and investors who have been thinking of buying a short-term rental for sale should do it now.

If you are one of these investors and want to know which cities have the highest profit potential for short-term rentals in 2022, here they are!

#1 Hammond, LA

#2 Harrison Township, OH

#3 Black River, NY

#4 Creve Coeur, IL

#5 Pineville, MO

#6 Marshall, Missouri

#7 St. Robert, MO

#8 Parkersburg, WV

#9 Folcroft, PA

#10 Corydon, IN

Do you agree?

This has got to be one of the most fundamental questions to ask yourself if you're considering investing in real estate for the first time or want to expand your existing portfolio.

After all, you can increase your odds of successful investment by remembering the familiar phrase “Location, location, location.”

Which city is the best city to invest in?

Any suggestions? Let me know your thoughts!