New Host

[Emily2144]

Hi!

My husband and I are new hosts. Our listing is not yet live as we still need to furnish our cabin. I am wondering mostly about insurance coverage/liability coverage advice and tax documentation. I want to make sure we do everything right. 

Thanks!

Emily & Justin Forsyth

[Lodge102]

Hello Emily & Justin,

Welcome to the world of hosting! It's fantastic that you're taking the step to share your cabin with others. Getting things right from the get-go is not just commendable; it's smart. Let's break down your concerns into bite-sized, digestible advice, shall we?

Insurance Coverage & Liability

First off, diving into the deep end of insurance might not be everyone's cup of tea, but it's crucial. You'll want to look into a specific type of insurance called "commercial liability insurance" tailored for short-term rentals. This goes beyond the scope of your typical homeowner's insurance and covers you for the unique risks associated with hosting guests. It's like an invisible safety net for the trapeze artist that is a new host.

Airbnb offers a Host Protection Insurance program, which provides primary liability coverage up to $1 million USD per occurrence. It's designed to protect against third party claims of property damage or bodily injury. However, it's not a catch-all; reviewing the policy details to understand what is and isn't covered is essential. For instance, it may not cover personal property, shared spaces, or certain types of accidents.

For a more tailored suit of armor, considering additional coverage through a third-party insurance provider that specializes in vacation rentals might be wise. This can cover gaps and give you peace of mind, knowing your specific needs are addressed.

Tax Documentation

Ah, taxes - the inevitable guest that shows up every year without fail. As hosts, you're stepping into the realm of income generation, which means tax implications. The key here is to keep meticulous records of all your earnings and expenses related to your Airbnb operation. This includes, but is not limited to, cleaning fees, home repairs, utility costs, and any amenities or supplies you provide to guests.

In the U.S., if you rent out your property for more than 14 days a year, you'll need to report this income to the IRS. However, the expenses associated with hosting can often be deducted. Think of it as the universe's way of giving you a small pat on the back for your efforts.

For specifics, consulting with a tax professional who has experience with short-term rentals is invaluable. They can help navigate the complexities of tax laws and ensure you're taking advantage of all applicable deductions and credits.

Final Touches

Remember, while starting your hosting journey, ensuring you're well-protected and informed on the financial front is just part of the adventure. Furnishing your cabin with love, care, and attention to detail will make it a welcoming retreat for your guests.

And if you ever find yourself in need of more in-depth advice, our premium service is just a wink and a nudge away. We're here to make sure your hosting journey is not just compliant, but also celebrated.

Best of luck, Emily & Justin! Here's to a journey filled with delightful guests, stellar reviews, and the joy of sharing your special space with the world. Don't hesitate to reach out if you need more guidance - we're here to help every step of the way.

Cheers to your new adventure!

Lodge Compliance

[Joan2709 · Accepted solution]

Hi @Emily2144 

Lots of great advice from @Lodge102 !  Kudos to you for wanting to make sure you have all the facts before jumping into Hosting! Many new Hosts don't do this and end up with all kinds of headaches and problems. Many new Hosts don't realize operating a STR is NOT passive income as many believe. It involves alot of work! Here are some other things to consider:

Mortgage

If you have a mortgage, be sure you check with your mortgage company to see if STRs are even permitted.

HOA

If your cabin is governed by an HOA, be sure to check with them as many don't allow STRs, have certain restrictions if you do rent out (30day min, parking restrictions, etc.) or will try to prevent you from operating at all.

Neighbors

Might want to consider your neighbors if they are close and if they will be helpful if you don't live nearby. Good neighbors will be a blessing, but some will not be happy about your Airbnb. Keep this in mind.

Cleaners & Maintenance

If you don't live in the area, you need to get your cleaning and maintenance lined up BEFORE publishing the listing. Good cleaners are very hard to come by and they will be your eyes and ears on the property. Maintenance is important to prevent problems before they happen which can lead to negative reviews. 

Snow Removal/Landscaping

If you live in an area that gets snow, you'll need to figure out snow removal for driveway and ensure guests can access the property. Landscaping is a must as well. Be sure you have these services in place before listing the property.

Airbnb Superhost Ambassador Program

Airbnb has a program to help new Hosts when they first get started. They will help guide you until you get your first booking, but after that they don't continue assisting. 

New Host Learning Curve - What Are Co Hosts?

There are lots of "minefields" for new Hosts regarding how to use the platforms (Airbnb, Vrbo, etc.) and what protections to put in place on the listing. There are also many areas like pricing, Calendar and availability, how to avoid scams, effective guest communication and how to use smart home devices that new Hosts are not aware of. You want to maximize your first 3-4 weeks while Airbnb gives you the "new boost" in search ranking. You can use an experienced Co-Host until you get the hang of it, or ongoing to free up your time. Some Co-Hosts provide one-on-one coaching, or you can invite them to be a Co-Host on the property. Whatever you do, DON'T allow anyone else to be named as Primary Host/Owner on your account. Most large property managment companies insist on being named as "owner" on your account and any reviews go with them if you terminate the agreement. An experienced Co-Host is a much better option in my opinion.

Feel free to send me a direct message if you had further questions. Wishing you much success on your Hosting journey!