All Forum Posts by: Joel Oh

Quote from @Chris Seveney:

@Joel Oh

I have never bought a car for my business as my cos says it is a very slippery slope. You need to register it under the business and insure it under the business and can only use for business. You are better off deducting the mileage per the fed rate. Why? If you get audited good luck

Not a cpa or tax professional just telling you what has been relayed to me by several CPA’s

 Maybe i will lease it under my company name. Heard it is a safer way

Quote from @Jonathan Bock:

Quote from @Chris Seveney:

@Joel Oh

I have never bought a car for my business as my cos says it is a very slippery slope. You need to register it under the business and insure it under the business and can only use for business. You are better off deducting the mileage per the fed rate. Why? If you get audited good luck

Not a cpa or tax professional just telling you what has been relayed to me by several CPA’s

 But have you bought a plane yet? 😁

 I will buy it if i can write it off 😂

Quote from @John Malone:

@Joel Oh likely yes. Most of our arbitrage clients are Sch E

 That is so interesting!! Do they own a percentage of the property? Don’t you need to own a certain percentage of the property to claim it under Schedule E? I kind of see how it can still be a passive income without owning the asset. Always learn new things! 

Hey guys, thinking about purchasing a car this year and wondering if it is possible to write off a luxury car for their STR expenses.

My tax advisor said that I will need to prove this car was used for the business.

I know a lot of business put their advertisement or number to write off their cars. 

Problem is, this is a bit hard for us STR owners. Is there any creative way for STRs owners to write off their vehicles?

I use Schedule C for my STR and treat them like business. I feel like if I pay 15% bonus taxes, I should be able to write off my car I drive for my business haha.

Please help me!

Quote from @John Malone:

@Joel Oh IRC 469 and 1402 are not "tied at the hip". IRS CCA pretty much came out in 21 and confirmed Sch C is incorrect for MOST STR owners unless you provide substantial services.

 Hi John! Thanks for the explanation! This helps a lot. How about arbitrage? Can it qualify as Schedule E anyway? 

Don't give up a great idea just because someone said so. You never know until you try. So what if it costs maintenance. If it brings in more guests especially during your slow season then it pays by itself. 5k is honestly not much money for a great lesson. 

Quote from @Owen Rosen:

@Joel Oh What do you mean by: "Regular home owner's insurance will always pay for guest's damage to the house."?

If it is your owner occupied house and using your home for STR and the insurance has a premium for guest damage, you are insured just like any other STR insurance.

The same logic goes for the LTR insurance with adding premiums (which is really what Sthe STR insurance model is)

Most STR insurance is exactly the same thing as LTR with tons of premiums added for unnecessary reasons like no one will ever use.

Quote from @Michael Baum:

I am sorry @Joel Oh but you are 100% wrong that a standard homeowners policy will cover guest damage when you are using the home as a short term rental.

The only way they would cover it is if they were unaware that you were short term renting the home. That would be fraud and is a criminal offense.

Just to be clear, you own 250 properties? I find it hard to believe that you would risk a 9 figure portfolio for $300k

I am not saying that getting a 1m payout on a destroyed property is easy. What I am saying is that AirBNB or VRBO aren't going to cover it. You need to have the correct insurance for a STR. That is a type of commercial insurance and not a simple homeowners policy.

Regarding the little things, yes that is what AirCover is for. I have had 3 claims. One for $100 for stolen stuff, one for $250 for a broken futon and a $1000 payout for a broken window (VRBO).

All of those payed out in about 2 days. All I did was send proof of the damage and repair bill.

We are talking about foregoing the correct STR insurance for homeowners expecting it to payout for major guest damage.

I think this calls for another patented day of Mike's Research Plan.

I will do my best to call 6 major insurance companies (not brokers) and get the scoop. I will also call a few lenders to find out what they say regarding using homeowners insurance for commercial purposes.

I figure that should put it to rest. I will start another post like I did with the STR valuation research.

Haha, I am not sure why you are so invested in this. This is just an idea and actually, my insurance told me adding a guest covering premium to LTR insurance will cover all the STR issues. (of course not the silly bicycle ones haha) I think my agent knows what is right or wrong.

I manage 600 LTR for my work. So I work with a lot of insurance claims. Being an open mind always opened new opportunities for me even if it is a ridiculous idea! Insurance is definitely one of the parts that can be creative and save you a lot of money! The original insurance package wanted 2M and later became a 1.2M deal, just giving you an idea of how wild the industry is. 

Quote from @Brian Christinakis:

Let's not forget the liability piece that STR insurance provides in MUCH higher liability limits for incidents ON your property but also incidents off your property while your guests are staying there (like using a bike). Not to mention legal representation, loss of use coverage, etc.

It's not just about damage claims.

I am not sure even the liability gap is reasonable considering their difference in premium. I just can’t justify Proper’s overpriced packages. 

From my experience, Aircover has been covering loss of income if there were bookings for those days. 

I am not sure how much fight they can do in the court for cases like outside bicycle incidents but I think I will hire an actual attorney instead of relying on an insurance company’s lawyer if it ever happens haha.

I just don’t like how STR insurances are talking like they are the only one who will cover everything. In my view, regular home insurance is really no different, and adding the Aircover makes it better than any insurance I have seen.

I see that STR insurance can benefit people who can’t utilize Aircover though. Aircover definitely requires you to prove everything. 

Quote from @Michael Baum:

This is just dumb @Joel Oh. I am bit surprised that anyone who operates a STR would consider not having the correct insurance.

AirCover and VRBO's coverage is not insurance. It just isn't. It is a way to get some kind of assurance that any guest damages will be covered.

I would love to see how AirBNB would react if the whole house burned down due to a guest. 300-500k in rebuild costs. I seriously doubt it. They often don't cover a $1000 bill for obvious guest damage to furniture. Their are hundreds of stories about how AirBNB left owners out in the cold.

https://www.nbcbayarea.com/news/local/fire-prompts-1-million...

There is just one article where AirBNB seems to have skirted it's 1m guarantee. Whole house burned to the ground, likely due to guests smoking on the deck. Took nearly 2 years and help from the local NBC station to get some kind of resolution which is confidential. We have no idea what the payout was. They did get immediate payout from their STR insurance policy.

To everyone reading this - This is not something you want to do. Don't rely on AirBNB and VRBO to cover ANY kind of damage let alone major house damage due to guests.

Get a correct STR policy even if it is an extra $1000 a year (that is about what we pay) over a standard home owners policy.

This is the textbook definition of penny wise and pound foolish.

I think you misunderstood it a little bit. Regular home owner's insurance will always pay for guest's damage to the house. I am not speaking about removing regular home insurance and 100% relying on the Aircover. I think STR Insurance successfully drew many misunderstood pictures that regular insurance will not cover guest's damage to the house. The only difference between STR insurance and LTR insurance is STR insurance will have a higher ceiling, which is normal considering their higher premium, and they will cover irregular items like flea damage, furniture damage or bike accidents which never fully cover the cost of insurance increase if you ever claim them.

Also, any insurance claim for a burnt house will take a minimum of 2 months of investigation and it can go to a long *** court case depending on the situation. No insurance company will give you a million-dollar check on the spot.t. Even getting a new roof or windows often takes a month to two. Also the worst, your premium will likely triple for the rest of your life. 

My point is Aircover has perfect coverage for small claims that would not normally go to an insurance claim such as smoke damage, furniture damage, small accidents… I never failed to get covered for over 50+ claims I placed so far. 

I see many people saying oh it is just $100 but as I said it adds up pretty fast and in reality, it is way more than a $100 difference as the price of insurance is going up very high. I just closed a $1.2 million dollar insurance deal and every dollar really matters. Yes, it is just $1,200 per unit but if you have 250 units, it is a $300,000 difference per year. Definitely something to think about in my opinion.