Seeking Advice on Transitioning from Owner-Occupied B&B to Full Short-Term Rental

[Lance166]

Hello Airbnb community!

I’m considering transitioning my current owner-occupied Bed and Breakfast (3 bed, 2 bath) to a full Short-Term Rental operation by renting out my entire property as a 5 bed, 3 bath home. I’d love to hear from anyone who has made a similar transition or has insights into the potential impacts and challenges.

Here are my main questions and concerns: Any help with items are appreciated!

1. Property Taxes: Will changing from an owner-occupied B&B to a full short-term rental significantly increase my assessed property value or property tax rate?

2. Tax Implications: How significant is the loss of primary residence tax benefits, such as the capital gains exclusion or homestead exemptions?

3. Insurance Costs: What kind of increases should I expect in insurance costs when switching to a short-term rental policy? Any recommendations for good insurance providers that cater to short-term rentals?

4. Business and Registration Costs: Beyond the initial registration fees and paperwork, are there any ongoing costs or surprise fees I should prepare for?

5. Other Downsides: Are there any downsides I might not be considering, such as guest management issues, stricter regulations, or hidden operational challenges?

6. Maximizing Revenue: For those of you who’ve increased your rental capacity, did the income from renting the entire property (vs. a portion) offset the additional costs and risks?

7. Legal/Regulatory Considerations: Have you had issues with zoning, licensing, or other legal hurdles after making a similar change?

Any advice, resources, or personal experiences you can share would be incredibly helpful. Thank you so much for your time and expertise!

[Emilie]

Hi @Lance166, 

What an exciting project! ⭐

Whereabouts is your B&B based exactly? If it is in the USA, you might find the following article quite useful: Responsible hosting in the United States

In addition, here are a few pages that are quite helpful to browse ahead of hosting on Airbnb -I hope they answer some of your questions:

• How do you get started as an Airbnb host.
• Get started on Airbnb
• What it's like to host

I appreciate these aren't directly linked to transitioning from a B&B to a short term rental, however as they cover how to get started on the platform I do hope you will find them useful. 🙂

Thanks,

Emilie

[Lance166]

Hi Emilie-

Thanks for your note. I should have put in a bit more information. I've been a super host on Airbnb for 3 going on 4 years now.  I'm specifically referencing the type of permit that the local government issues and the tax changes that come along with it.

Thank you for your links however.

Lance

[Helen3]

If you contact your local government they can tell you about any STR restrictions in your location. In the US some areas also have local taxes either collected through Airbnb or which you collect and pay directly . @Lance166 

your accountant can advise on tax matters

in the UK there are also regulations you need to meet such as fire and building regulations but not sure how this works where you are. 

you can speak to an insurance broker re STR insurance costs .

you would need to do a profit and loss budget for your current operating costs and projected operating costs and income to get an idea of how much profitable changing to the new model is likely to be.