Just when I thought I was out....

Laura2592
Level 10
Frederick, MD

Just when I thought I was out....

We are selling our ABB. We close May 20.

 

Talks with the accountant have made the hubs insane about paying capital gains (which are ridiculous in our state, taxed like income on top of the federal 15%). He wants to do a 1031 exchange which means we reinvest in another property. We made a lowball offer on a tiny farmhouse on 3 acres 10 mins from home. Cute, boringly updated (all new stuff-- it was a derelict property a few years ago and brought back from the dead) but workable, great views. They accepted which surprised the heck out of me.

 

We ran rental comps. We can make a decent return on it with the right tenant. Then my husband did a whole analysis (with spreadsheets!) on ABB potential earnings. TWICE what the rent would bring. Of course he wants to do that now. I mean we have the furniture....and we have a cleaner here who does our house. So he contacted her and got quotes, did a whole pricing strategy.

 

I don't even want to think about this. He has not done most of the interaction with the guests. I see his point, I see the potential earnings but at what cost to my sanity? He argues that we would be much more hands off because of a more reliable cleaner (we had a lot of trouble with the last one due to health issues and there wasn't a great labor market near our cottage), less personal interest in staying in the place, and less of a commute to go back and forth should we need to. I get it but just NO. He says "let's list on other platforms!" 

 

We may need therapy to overcome this. I am ready to pull the plug on the sale. Help with your sage wisdom, fellow hosts.

 

 

44 Replies 44
Basha0
Level 10
Penngrove, CA

As much as I have loved your stories your mental health is worth more than any income from short term rentals. Bite the bullet and pay the capital gains. There must be a way to invest without the pain. 

Sandra126
Level 10
Daylesford, Australia

I sold, got out, paid massive capital gains but to be fair,  such is the tax system. Your call. Life is more relaxing.

Stephanie
Community Manager
Community Manager
London, United Kingdom

I miss your hats @Sandra126 !!

-----

 

Please follow the Community Guidelines 

I've been waiting for a building permit for my next project for two whole years now, I will get back to hosting eventually. But it's relaxing in between... hats are still around. @Stephanie 

Branka-and-Silvia0
Level 10
Zagreb, Croatia

@Laura2592If I would open a new Airbnb it would be in the same building/house where I live but in a separate apartment or in a house across the street.

Now it is some 15 min by car (or more in the rush hour) and driving back and forth and waiting for the guests is a waste of time and money and more stressful.

 

I would never host in a room of my own apartment or in another town. I know many hosts are forced to do it for financial reasons but I would avoid it if I could.

 

 

@Branka-and-Sylvia0 I am the same , I always tell the guest before arrival that I must have an ETA plus a text on the day if there is any variation of arrival time by more than an hour and a 'heads up' ten minutes before arrival and not to arrive without letting me know. This is in my rules.I tell them that I do not like to keep people waiting especially if it is dark or cold, to get into the house.I am super strict before people arrive but by the time they do they are familar with communicating with me and the fact I am around  After that I disappear unless needed. I hate hate hate sitting waiting. I live about six or seven streets away but cannot sit around all day waiting on someone elses arbitrary sense of time so I tell them up front , basically ,let me know. the only people I have pity on is mums of babies because I  know that random stops while travelling are necessary unpredictable and unavoidable. The solution to this seems to be they let me know when they leave home and then when they are a few minutes away . This way the house is warm or cool and they can come in straight away. my check in time is 2. oclock  but if someone tells me they will arrive at 4 and then at 2 they text and say , well we are here now , I am annoyed basically because they are messing with my time . I am not a 24 hour concierge.Of course they never know but it puts a strain on hosting and  takes extra time. So yes , I agree an Airbnb that is not in your house should be close by but I do not think the guests need to know where you live so I would have another in the same area but not too close. H

 

@Helen744  I'm curious why you don't do self check-in? your listing is a stand alone cottage. 

I'm actually going to enclose our outdoor veranda, put in a mini kitchen and turn our house listing into "self-contained" and i will make it self check-in too. It's such a pain waiting for guests.

@Gillian166, I have never favoured it, but initially we went with lockboxes but only for those who we had hosted before. We also had to change locks a few too many times because of giving out too many keys . We have three doors but two keys ,so we give out only one set of keys . Our lockbox was forced open  by ,we think the guests.We give the key only to the person who has booked and tell them specifically where to hang it as they leave. We have vintage doors that we do not want cut and we prefer that people come and go via the front door. If I am comfortable with the guest then I can leave the key 'at my discretion' During covid  there was also a 'rental amnesty ' and people were not allowed to be 'thrown out' of their homes. Some Airbnbs suffered from people just moving in and taking over . That was here in Victoria and in my suburb in Ballarat so since then ,things have changed , and they will not in my opinion ever go back to the 'free and easy ' status that once existed with us trusting random strangers. H

@Helen744  that "rental amnesty" wasn't always true, we asked for covid rent relief in Sydney, and instead got a kick out notice. The owner claimed she was moving back, which was a lie. 3 months later she rented it out again. Anyway, turned out fine, we missed the big Avalon lockdown by about 4 days. 

We have a keypad entry, I don't give guests keys. I give them a little bit of cardboard with the code, tied with a ribbon and a cute wooden key... and after the 4th one of those went missing I stopped doing that too. now i write the code on a card and tell them to take a photo of it. 

As a guest I highly value self check-in. If I'm travelling I don't like the pressure of committing to an arrival time, and if we are tired from a day of travel it can be a challenge to have a conversation with a hovering host. 

@Gillian166 I hear you Gillian but I lived through covid in the most locked down state in Australia , where people were virtually locked in housing commission units and locked into or out of our biggest cities and went thru checkpoints between my city and Melbourne . Our population has soared in the last six months . The extent of our social ills generated by covid cannot be easily dismissed or considered'back to normal' Early on we as a family would discuss how people expected everything to'go back to normal'. This is not ever going to happen . In our house we promote 'normal' and ordinairy.also polite.As I have said before we can make exceptions at our discretion. We do not generally cater for 'fly by night guests . Rental amnestys manifested very clearly here and were typified in a one month period by a new for lease sign and piles of old furniture on the side of the road. some AIRbnb owners notably a lovely lady who lives in the street I lived in had an Airbnb which during lockdown she turned into a long term lease,the driveway was covered with oil seeping into and killing everything in the flower beds . the residents had lots of different tenants coming and going . lots of out of control parties . On one particular evening my son and I took one of our 'allowable ' walks just as a body came thru the front windows. This was a stand alone house in a quiet spot backed by a canal and opposite a school. The owner who was distraught sold the house as soon as she was able but the tenants still had plenty of time.So I will do what I do . H

Huma0
Level 10
London, United Kingdom

@Helen744 

 

I have a similar approach RE check in. Although I host in my own home and work from home, so am here most of the time, I also hate waiting around for guests to arrive because I've always got something else I could be getting on with. The guests are not paying me an hourly fee, so they don't get the right to leave me waiting around for hours. My check in is any time from 3-9pm, but I let guests know they must specify an ETA in advance. I don't mind if they end up running late, as long as they let me know, so I can get on with other things rather than have to hover near the door. 

 

Personally, I prefer to check in guests in person. There are quite a few things to show or explain to them (if they are very tired, of course I try to speed this up) but also I want to get a sense of who they are and if they are going to be self sufficient or need more assistance from me. And, if there are red flags, it's best to clarify misunderstandings or tackle problems sooner rather than later. Of course, my guests will be sharing my home with me and I think most appreciate the welcome and the orientation. 

 

I do understand why @Gillian166 and others would prefer self check in, especially when staying in a stand alone listing. However, a locksmith told me that most home insurance policies here would be voided if I used a lock box or key pad. You need to have a British Standard Lock. I don't know if policies are similar in Australia or not, but a keypad definitely seems safer to me than a lock box. Also, with a keypad, you can change the code, which reduces the risk of guests turning into squatters.

Lorna170
Level 10
Swannanoa, NC

@Laura2592  I was never happier than when I pulled a particular property and no longer rented it as an STR.

 

Regarding your new proposed property -- we opened our cabin when it was one of 3 available in the immediate area, and one out of 84 in our unincorporated township.  The first year was horrible as our rental agency underpriced it.  I took it away from them, figured out my bills, added a hot tub and advertised at 4X the rate of similar properties.  I struck gold.

 

Tax laws change all the time... if you like the property you are considering, go LTR until you are ready for STR.  Just be aware of one thing.  While an LTR is kind of set it and forget it, you may be very dismayed by the condition of the property as you change tenants.  STRs are an ongoing logistical "nightmare" at times, but you do have full control of how the property is being treated.  

 

Do consider visiting the forum whatever your decision; we would miss your humour and advice.  And I am still waiting for that coffee table book ...do you need some stories?  I've got a few beauties.  All the best!

John2406
Level 10
Swansea, United Kingdom

@Laura2592 Forgetting for a few moments, the shall I /shan't I possibilities, I believe that everyone on the Community  enter pages would miss you and your posts if you did decide to bow out, but there are always ways around obstacles, so ease don't be despondent whichever route you decide to go down.

 

For many years I let properties as LTRs (still have one with a long term Tenant), but LTRs can come with their own problems, one if which is one doesn't get to inspect one's property as often as wished, whilst the negative aspect of that, is that one sometimes doesn't find out there's something wrong until anything up to 6mo this has elapsed after the problem/fault, etc occurred!

 

Primarily because of the latter, and because of what the Tenant had done, and failed to report what had happened, I ended up having to not only have s completely new bathroom, but a new floor to it as well, as it had completely rotted through (water had been allowed to come over the top of the bath, and neither of the tenants' had tried to mop it up!)

 

At the time (2012), I had the option of (once those tenants' vacated the property) of either selling the place (not what I wanted to do), leaving the place empty (not a viable option), re-letting the place to more reliable tenants (didn't want to take the risk) or holiday letting  - the latter proving to be the most attractive of the options, primarily because after every changeover, I'd be able to check the condition of the place, and should anything need attention, it could have it moreorless straight away (I have a very handy handyman, who has done a lot of work for me over the years, and who is most reliable as well).

 

Back in 2012, I was a lot younger, but in 2015 we we t independant of Agencies etc, and were full nearly all of the time, with direct bookings.

All went well until in about 2018, and quite unexpectedly, I found myself in hospital, having suffered a pulmonary embolism!

 

I don't know who was more surprised, .myself or my wife, although before that, I had run out property singlehandedly (other than having a Company clean our ace and change all of the bedding etc. Everything else, I did).

 

Being in hospital the day before Guests' were due to arrive, wasn't much use when my wife didn't know where anything was in the property, and she'd never had any interest in the place, so between my writing down all that had to be done, S we as where everything was, we both had a very steep learning curve that weekend, but fortunately all went well, whilst when I'd been discharged from the hospital, it was from then on that I always had help from my wife at every changeover (she was however also the full-time carer for her handicapped sister, so couldn't help me too much, or for too long!)

 

And then, just over 12months later, the Covid-19 pandemic hit the world, and with it, holiday lettings had to stop.

 

During the closed period however, I had time to think what best to do when everything started up again, and along the way (and at some stage), a very good friend offered help, the end result if which was, that when we reopened last year, I had a Co-Host, and not just any Co-Host, but I e who is 18yrs younger than me, far more active, and who has kindly taken off my hands, the largest amount of the physical work, as well as, to a certain extent, much of the mental aspect of everything.

 

Being 75yrs old, I still have entry of go in me, but not so much with carrying heavy bags of laundry up 3 flights of stairs, so I'm very grateful for all the assistance I can get.

 

The reason I'm saying all of the above is because trying to do everything on one's own,  does take a lot out of one, so with respect, I would suggest that before your husband assumes you would be able to set up as a Host elsewhere, he should do exactly what you have previously done, so that he can assess the reality of being a Host or Super-Host, and only  then decide what would be the best way to procede.

 

I don't know the way things go in the US, but here in the UK, there's a maximum length someone can stay before the property is deemed to be a Tenancy (ie "any single holiday let must not be for longer than 31 continuous days") and as anyone who has been a Landlord as opposed to a Holiday Home Owner will know, there's a world of difference between the two when it comes to Taxation as well as what one can claim for or against! 

 

Out of choice, and despite having "quiet" periods, Holiday letting to Guests is - I feel and believe - a way of creating a peaceful and relaxing place for Guests to stay, as well as for them to discover everything we have almost on our doorstep here.

 

What's more, the lovely  comments Guests leave for us more than make up for all the hours all if us put in to ensure everything will be "just right" for their stay.

 

@Laura2592  - by all means do have a rest from everything, and do please recharge your batteries - for as long as you like - but your husband does need to not only recognise everything you put into making your place so successful, but he needs to both start being a main part of holiday letting, but to forget all about spreadsheets and profitability until one year after his involvement, to see how he feels about it all then!

 

Thank you for everything, and whatever you decide to do, I know you'll make a success of it!

X

Mike-And-Jane0
Top Contributor
England, United Kingdom

@John2406 I enjoyed your post. The only misconception is that a tenancy is deemed in the UK if the rental is over 31 days. I agree that lettings over 31 days don't count in the 105 day Furnished Holiday Let requirement but that doesn't then make them tenancies.

@Laura2592 From investment point, for our STR market, we only make 2x or less. Considering the cost, sometimes, LTR will make more sense. We stay in STR rental is only because we want to keep the house nicer and sometimes we could use them for our vacations or retirement later. Airbnb sometimes is stressful. I think might be we just ignore the guest reviews. Just do what we can do. Anyway, I hope you stay here, like your posts a lot.