All Forum Posts by: Jake Morin

Thank you guys for the responses! Everything I’ve researched today backs you up as well. I have a meeting scheduled with a CPA and I’ll post if I find out anything different. 

Good morning all, 

Hope everyone is enjoying the busy season. I have been reading a few posts on BP forums (that are 3-5 years old) about self-employment taxes which state that if your average stay is less than seven days then you need to pay SE taxes, no questions asked. I have also been reading the "Every Landlord's Tax Deduction Guide 16th Edition" (most recent addition) and it doesn't mention anything about the less than seven days rule. This book just says that you don't have to pay SE taxes unless you provide "substantial services" like a hotel or bed and breakfast (maid service during stay, food, or concierge). This book is much more recent and maybe they eliminated the 7 days rule from the tax code. I will speak to an accountant but I also wanted to see if anyone had any thoughts. Bottom line, are short term rentals with average stays less than 7 days automatically required to pay self-employment taxes?

This is the original post and replies that made me think we DO have to pay SE taxes

https://www.biggerpockets.com/forums/51/topics/456560-long-term-rental-vs-short-term-rental-taxes

This is a link to the article that they reference written by Brandon Hall 

https://www.biggerpockets.com/blog/2015-07-05-tax-impact-airbnb-short-term-rentalsinvestors

Hey @Ioannis Babatsikos! We looked for about a month and ended up buying a cabin in sevierville. We are self managing using a few different apps. Things are going great! 

Good Evening BP, 

I'm scheduled to be moving to Ft Bragg in the next 2-3 months and am currently trying to gauge the investment market in the Southern Pines/Pinehurst NC area. It looks like there is a booming short-term rental market and I am considering purchasing a multi-family unit using my VA loan, living in one of the units, and renting the other unit out on Airbnb. Through some internet searches it appears that the city governments of Southern Pines/Pinehurst are trying to slow the short term rental market in the area. It also looks like there is a very solid job market in the area between a few manufacturing companies, the hospital, and the tourism professions. Anyone have any thoughts on this plan or on investing in Southern Pines in general?

Thank you all for the advice, we closed on a cabin on lumber jack way in Sevierville and are excited to get started! 

Thank you for the advice Russell. So basically you’re saying that we shouldn’t ask for money for things that can be seen without an inspector?

Happy Thursday BP,

I’m in the process of closing on a cabin in the Smoky Mountains region of TN. We just had the inspection done. The inspector came back and said that the roof was marginal. We then had a roof inspector come out who said that the roof has to be replaced within no more than 5 years but is probably already leaking in a few spots (there hasn’t been any rain lately so he can’t find any confirmed leaks but those were his thoughts.) the cost for the new roof is $7K. The seller told us before the inspection that since they came down so much on the asking price (our offer was 250K, they were asking for 269K) that they would not fix any issues found during the inspection. There are multiple small issues that we aren’t even asking to be fixed, but we feel that the 7K for the roof can be reasonably discussed. When we told the sellers agent that we want the seller to pay for the roof because it is such a large expense, the seller became angry. We are currently waiting on their counter offer. The numbers still make sense for us to buy it even if we have to pay for the roof, but I just wanted to use the vast knowledge of the BP community to see if anyone had any ideas on how to move forward. We’ve thought about trying to raise our offer to 257K and then just have the seller give us 7K in cash to pay for the new roof. We are fairly cash strapped and would like to avoid using cash as much as possible. Thanks!

Good Morning All,

My partners and I are considering investing in a vacation rental in the Smoky Mountains in Tennessee (Gatlinburg, Pigeon Fork, Cosby area). From the research I’ve done, I’ve seen an average occupancy rate of 54% and a 9.5% vacation rental tax in Gatlinburg, is that reasonable? Is there a specific website that works best for looking at properties in the area? (I’ve looked at Zillow and several local property websites). Finally, what kinds of rate of return and cash flow are normal for the area? Thank you all so much for the help!

Wow, outstanding info Caleb. Thank you! @Caleb Heimsoth

Thank you Will and Michael for the replies! I am going to do some research and I will contact you guys again with questions.