All Forum Posts by: Craig Jones

Well, looks like the equity in our two properties alone creates an expected family contribution (EFC) higher than the annual cost of just about any school.  Even with $0 income.

It was a fun idea to think about though 😊

What I am saying is that depreciation-based losses brought our AGI pretty close to zero both years.  If FAFSA is based primarily on that number, then things could work out well.

We had STR depreciation losses that wiped out most of our W-2 income in 2023 and 2024.

And also a kid applying to college this fall.

Anyone else been in that situation?  I am very curious to see what the FAFSA formulas will make of it.  Would love to hear others' experience.

AirDNA can scrape the occupancy and ADR for that exact property directly from AirBnB. So it's always going to be spot-on for a property that's already in use as an STR.

Everyone here on this thread is talking about the corner case where the property's average stay duration is 7 days or less and the property is self-managed (i.e. you can meet one of the standard material participation criteria).  In that case, the rental activity is considered non-passive and a loss generated by cost seg + bonus depreciation can offset other non-passive income including W-2.  Even without REPS status.

I'm pretty sure this was meant to exempt lodging (i.e. hotels/motels) from passive loss limitation rules.  And not really intended to benefit high W-2 earners running STRs on the side, which is a thing that didn't even exist when that tax code was created.  For this reason, I think the "loophole" word is fair game.  But also, fair game to apply it to STRs since there's no ruling to the contrary.

Great post AJ. And exactly why I've turned my attention away from SFR STRs and toward small commercial properties that are totally outside the STR permitting regime.

This place is my prototypical ideal:  https://www.lochlevenlodge.com/

Amazing location, year-round demand, exempt from heavy-handed local STR regulation and permit caps. And also way, way underperforming. No OTA distribution, no dynamic pricing. You can call them or book a room on their website if you happen to know they exist.

You could easily run that place STR style with keycode locks on the rooms. No need for staff beyond cleaning and maintenance which can be outsourced.

Totally not for sale, no way, no how.  Believe me, I've tried 😊

But!  Search your memory bank.  You know other places like this near you or where you've vacationed.  Mom and pop are ready to retire and you can do it better.

EXTRAORDINARY profits are still there for folks with STRs in markets that have lots of demand, hard limits on the number of STR permits available, and 2021 mortgages below 3%.

Building and planning code in my jurisdiction includes fences.  That one would for sure be a code violation here, both in terms of construction and appearance.

I haven't noticed a change in bookings either after I made this switch.  I believe the map view on AirBnB now shows the total price for the stay including all fees (but not tax).  So it shouldn't put you at any disadvantage if your nightly price is higher (but has AirBnB's cut rolled into it) while other properties have a lower nightly rate but AirBnB's cut is added on top.  

I was just about to post about this.

Under the standard fee model, the guest service fee is about 14.2% and the host service fee is 3%.  So AirBnB gets a 17.2% cut in total.

If you choose "simplified pricing" the host fee is 15% and there's no guest fee.  You can then raise your prices so the guest sees the same total as before, and you actually end up netting 2.2% more.  

Another (minor) benefit is that AirBnB compliments you in front of the guest during the booking process:

Of course I'm not really covering anything.  The money has just moved under a different shell.