I couldn’t file schedule C expense type things like profit and loss like I do on my writing business. It’s just a rental like any other.
Schedule E allows for deducting expenses. I took full advantage.
It does. I took a few things off. But nothing like on my other business, some of which cross over (like utilities).
Not complaining. I don’t want a C for this after all. You don’t want your mortgage company to see you are doing Air in the case of a refi.
I agree that this whole situation sounds like a mess.
First thing I would do is make sure that this won’t jeopardize your relationship. Try just living together first to see if the whole situation is even going to work.
If you decide to go forward you need to figure out your actual costs to bring into the equation. What % of this space is part of your whole property. If 1/3, then 1/3 of your mortgage and utilities needs to be factored into underlying costs. And then, since you’re providing for the fixed expenses, will she then cover all of the other expenses like cleaning supplies, food, amenities, etc? Because yes, you do need to make enough to cover all of your fixed costs, but this arrangement seems to look like you’re making passive income while she’s planning to take on the active income portion. But if your fixed costs appear to be more than a reasonable month at 50%, then this is where you’ll be able to show it.
So while it appears that she may be getting greedy with the 50/50 split, STR can be very profitable when compared to an LTR if done right. So if you’re currently LTRing it, you could easily make more money with just 50% of the money just sitting there and letting her do the work.
You need to be upfront with your feelings. And you need to be clear in expectations. If she wants 50% then she has to do all the shopping, cleaning, communicating, and taking on the irregular expenses. If you do any repairs/maintenance then you should receive fair compensation. You could discuss a split of 60/40 or 70/30, but she takes the full cleaning fee (which would then probably make it 50/50), but would then compensate you more for longer stays and her more for short stays (which also mean more work for her).
I know that with the Air cohost platform, I am signed up to do everything. The percentages are 10-20%, but if I agree to do every aspect of hosting, I expect the full percentage AND the cleaning fee. Which in some cases could easily be 50% of the money on especially short reservations. Honestly I think in many cases the 20% is ridiculous if I am literally doing everything from cleaning to maintenance, shopping, and check-in. But again, that’s where the cleaning fee is a huge factor and on 1-2 days stays I would make sure would bring me up to 50% of the money.
Another thing to remember is that the cleaning fee is in addition to the nightly fee.
So, get some quotes form cleaners and set your cleaning fee accordingly. Subsequently, the cleaning might be a break-even, in-out. Then separate the management fee from that and give a percentage for that.
She gave up her lease = she gave up her income. To live with you! Don’t be an asshole.
Name calling is not allowed on the forum. Please refrain.
Running a STR is no bed of roses!
You need to be available- usually 24 hours a day when you have guests, and responding to enquires with in a an hour.
Cleaning properly takes hours - for me 2 entire houses - 4 hours for one and 5 hours for the other and that does not include gardens and pool.
The world is now run on reviews…and you can’t afford a bad day.
For all the relationship guru’s… we’ve lived together for nearly a year. She’s had a house she was under a lease contract with and used it for airbnb because she was never there. Giving up her lease was just the last “official” step to say she’s moving in with me.
I have a friend who is my “co-host” for when I go out of town or if an emergency were to arise (like me being in the hospital). She gets 40-60% of the total for each booking. She also does the cleaning.
Jug… just curious… she was leasing a house and doing Air on it? Did her landlord know?
I think if you are the owner here, YOU decide what will and will not happen with YOUR home… You will decide who gets what, if any, of the profits. You two are not married yet. If and when that happens… well then you are in a different circumstance.
I don’t like how she’s come in and made demands of you like this. I personally would separate her contribution to expenses from the running of the Airbnb. Or, determine a fair market value for what she proposes to do with the Air and pay an hourly rate.
How about this. You are supplying the house, she is supplying the labor, booking, cleaning, etc. (and furniture). You set up a ‘Lake House’ account and each put in some money. All revenue from the rentals goes into the account. All expenses are paid from the account. On a regular schedule you each take an equal percentage out of the account, like a dividend. There’s your 50 - 50 split. If she outsources her job it comes out of her share.
But why? Why not figure out what outside help would expect to be paid, without investing in the property, and start from there. Unless they have agreed that they are working together for their future, but the original post didn’t sound that way.
This is a tough one as in essence you’re going into business with your girlfriend. My recommendation would be that you trial using her furniture and her doing a significant proportion of the hosting work for a 50/50 split (or maybe 60/40 split in your favour).
a) there’s no point in you spending money on furniture unnecessarily when those funds can be working harder in an investment account
b) a trial can help you see if it’s going to work out without having to say an outright no.
You will need to set the parameters clearly at the outset;’ we’re trialling this for three months. I have x y z concerns and so before I can definitely say yes I’d like to see how it will work in practice. In three months time we will sit down again, look at our profits and decide whether this is working out. ’
The good thing about the trial is it will quickly give you evidence as to whether your concerns are founded (in particular the idea that hosting isn’t much work), and gives you both a position to renegotiate.
@Jughead, you sound frustrated, so I hope that your choice of words and the points you’ve made are only indicative of an incident and not something that is festering.
I see this as 2 separate issues:
- a business relationship with another person (business - keep it business, at least until you’re married)
- her living with you - should she pay you to live there? (personal)
What you decide on point #2 is up to you. I see this forum as trying to help with #1, although I’m sure there are a lot of armchair psychologists that would love to help with that, too.
I have 2 suggestions:
a. figure out how much you want to make on the lake house as a long-term rental. Make it fair to yourself - don’t end up feeling like you haven’t charged enough or you’ll get resentful. Then rent it to your girlfriend for that amount as a monthly rental. If it’s worth more in the summer and less in the winter than charge her accordingly.
Then, let her do what she wants with it. She can put her furniture in, she can charge what she wants, do the cleaning, run her business. You still get your monthly rental no matter what she does. It separates the two businesses - yours as a property owner renting long term, and hers as a short-term rental manager.
b. If you still want to go with a percentage, I would do a 70 (owner) / 30 (manager) split plus she gets paid by the hour for whatever cleaning she does - a fair amount. Believe me it adds up!
My armchair psychologist side is concerned with this statement if you’re working together for the benefit of each other, as a loving couple should. I’m not taking sides, it’s obvious that this is a bone of contention between you. But whatever you furnish it with will definitely get some wear n’ tear on it and will need to be replaced at some point.
In this scenario I think that, as the owner, you should provide the furniture - so purchase the furniture from her (if it is suitable for the house). It then becomes yours, should you end up going your separate ways. In case you do, what you pay and the amount she saves from not having to store it will help to pay for new furniture when she moves out.
Has GF agreed to consider/accept/abide by consensus or a suggestion here? If not, you’re sort of in the same place you started out, yes?
She is not the problem here. You are. You’re not doing her any favors. She is moving in with you, which is supposed to mean that you are sharing a life together. She is an experienced host, and it sounds to me like you’re not. She is giving you a nod by allowing you to have 50% of the proceeds of her endeavor in your property. You should be thanking her. Since you don’t want to see it that way, I hope she’s moving on to someone who appreciates her as an equal.
I have to say I can’t agree with your comments.
‘allowing him to have 50% of the proceeds’ on a place that he already owns…really.
Yes she might be opening his eyes to the opportunity which is what a caring partner would do, that doesn’t mean that they shouldn’t talk about who is contributing what to any future business arrangements. He is contributing the property and all the associated costs that go with it. Then any utilities, tax, cleaning fees, insurances etc have to be accounted for.
Only then can then sit down and talk about how his partner should be compensated, for what she will be doing. I would definitely also get quotes from a couple of nearby superhosts/hosts with good ratings/reviews to do a comparison.
I can’t say I disagree with you on your points. However, he came here to have strangers litigate their relationship. I find that odd, to say the least.