Hi, I am looking at listing my house on Airbnb. I followed Airbnb steps for listing ie I have furnished the house with everything I think guests would need, started photography etc. Then I saw the step about following local government guidelines, which AirBnB do not make prominent or provide much info about, but appears to be a major issue. I am in Shrevport Lousiana. According to the local laws, I have to fill out a bunch of online forms, pay a $1400 aplication fee, send a detailed plan drawing of the property, attend a public hearing and also get liscenced by the Dept of Finance (a separate process that nobody seems to know, not even the dept, what is involved). Yet there are many many listings in Shreveport, have they all gone through this process? Is this normal for it to be so expensive and difficult, because I would not have decided to list with Airbnb if Id known, would have been easier just to make it a normal rental.
I am in MA where little was required until about 18 months ago. No we must register, AIrbnb collects occupancy tax for us, and we are supposed to have certain level of insurance (very pricey). However it is very foggy as to who is making any effort to enforce these rules. Town/cities in MA can also have their own procedures and taxes. If you search Airbnb listings in your area, I expect that many are “flying under the radar”, but there is a risk if anything happens to your guests. In our state stays of over 31 days are not subject to the tax and are treated like regular rentals, but can still go through Airbnb. Much depends on who pays attention and has an interest. Established BnBs or hotels might wield some clout. Some municipalities are more savvy about wringing out every possible fee. You application fee is hefty, but if you anticipate many years of hosting, it might be worth the investment. Hopefully others with more similar requirements will provide further assistance on this site.
Thanks Christine, I appreciate your detailed reply
Yes it’s a pretty normal process (where I am anyway). Our license fees are much cheaper than the $1400 you quoted but the fines are horrible if you don’t have one. (Something like $500 per day).
Anyone who is going to advertise their place online needs to b e sure that they are in line with the local requirements because if they try to go under the radar that won’t work forever - the local authorities will find them. (Or a rival rental will shop them).
We had all sorts of bonkers requirements (a land line for example) that I argued about with the inspector who agreed that it was crazy so let me off but nevertheless, there are plenty of hoops to jump through.
The fee is offset against your profits for tax reasons, as is the STR insurance which is another hefty expense. (Regular homeowners’ insurance won’t do).
Also, as Christine says, hosts have to pay TOT (Transient Occupancy Tax) to the local authorities.
Once you have your license and insurance in place though, it’s just a case of renewing them so it’s a one-time performance you have to do and nothing that other businesses don’t have to do when they’re starting up.
Do remember though that every country, state, county or city has different regulations. Airbnb can’t have much about these things on the website as all areas are different.
Thanks a lot for your reply Jaquo. I thought Airbnb covered the insurance, at least that is the impression they give?
Anytime one wants to set up a business, of any kind, it seems like one of the first steps to take would be to find out what you need to do to comply with local regulations. To do otherwise seems like putting the cart before the horse.
I’m not sure why you would assume that this is something Airbnb should have to tell you.
One of my daughters wants to open her own Montessori daycare. She has a Montessori teacher’s license, and asked the landlord of the property she lives on if she could set up a yurt in which to house the daycare. She has researched how much a yurt would cost, etc, but she also knows that there are all sorts of licensing regulations and bureaucratic hoops she has to jump through, some local, some to do with the Montessori organization, all of which she is working on now.
She didn’t go buy a yurt, Montessori teaching supplies and set it all up, and certainly isn’t going to do so until she researches and completes all the necessary paperwork, finds out how much all of that will cost her, or if it’s even a viable plan.
Thing is, AirBnb makes the process look easy on their website, to encourage as many people as possible to list. They need to be upfront about some of the major obstacles, otherwise it’s the equivalent of hiding details in the fine print. Maybe you think I should read the fine print, but it is still a little deceptive to do that in the first place.
It doesn’t really. Yes, in some instances some things can be covered but you’ll still need your own insurance. If you read about the Airbnb guarantee it invariably says that they ‘may cover…’
Many new hosts believe that every broken glass or stained pillow case is a reason to try to claim from Airbnb but it doesn’t work that way. In certain circumstances I’ve heard that hosts have been reimbursed for damage but that’s never been anyone I know (and I know a lot of hosts). Just two examples off the top of my head a) it doesn’t cover deliberate damage or b) damage done by pets. (Pretty different examples I know but they were just the ones I thought of).
Get your own STR insurance and work with your insurance agent to get the policy that right for you but also be sure to include amounts for wear and tear when you’re doing your sums to determine your nightly rate.
But don’t let these thing put you off! Hosting is a fabulous thing to do, you make money and meet people from all over the world.
Not really Joe, its the same setting up any business. Remember that Airbnb is an advertising platform and credit card handler, that’s all. It’s not up to them to teach hosts about the business in the way that franchisees are trained.
Well, most big businesses operate like that. You see an ad for a new car, and the price on the ad seems like a good deal, but there are little asterisks in the text that correspond to caveats written in infintisimally small print at the bottom of the page.
What you have to realize is that Airbnb isn’t your ‘partner’. They really don’t care whether a host’s business succeeds or not, which is nowhere more evident than in their insultingly low “price tips”, which savvy hosts pay zero attention to.
Airbnb would have you price your place at an amount that would barely pay for the toilet paper, soap, and utilities a guest consumes. All they care about is their bottom line in the form of the service fees they collect. And their attitude is that hosts are expendable- there’s always more who want to sign up.
Never expect Airbnb to have your back. Hosts are pretty much on their own, which is one reason forums like this are so useful- hosts helping other hosts.
@JoeC, I know nothing about Louisiana hosting permits, because I host in Ohio.
In my jurisdiction in Ohio, there are big differences between hosting a licensed bed and breakfast and a short-term rental (such as an Airbnb). The licensing requirements for a B&B are stringent and enforced. In my jurisdiction, there are almost no requirements for STR. All we have to do to run an Airbnb here is have a business license (easily obtained for about $25) and declare the income on tax returns. We aren’t subject to B&B licensing, inspections, etc. We don’t have to collect and remit sales tax or occupancy tax.
I suggest you do all the research you can to ensure that the requirements you’ve identified apply to STR/Airbnb and not just to actual licensed B&Bs—assuming that there is a difference between the two in your jurisdiction.
Be sure to do research on your city/township, county (parish?), and state. If Louisiana is like Ohio, the regulations vary by city, township, and county. Here, I started by reading zoning regulations. I even searched through township meeting minutes to identify any pertinent discussions. And I looked for business regulations, planning regs, and probably a few other topics. I periodically check again for any regs that might have changed.
It is totally your responsibility to find and follow all the pertinent regulations.
Even if Airbnb wanted to (which they don’t), they wouldn’t be able to keep track of all the regulatory requirements and changes in every municipality around the world. It is up to the business owner to know the local rules.
Airbnb strategically attempts to take no responsibility, as it is not only costly but subjects them to noncompliance consequences.
This is part of a bigger discussion about how much responsibility platforms have for their users’ statements and actions. Airbnb and others have gradually been forced to take on a greater policing role to be allowed to operate, in Airbnb’s case by, for example, providing host information to municipalities or collecting lodging taxes.
Local governments have a very long experience with long term rentals. I would expect for the newer sector of STR business that regulations, which currently range from no-holds-barred to very strict, will eventually settle at a more standardized middle ground, while taking into account potential harmful impact on housing availability and neighborhood quality of life.
That’s the impression they give. AirBnB is ALL about impressions, not so much about actually doing something other than letting a guest book and paying you once they check in.
Their “million dollar host guarantee” is NOT insurance, and it’s useless. Getting compensated for guest damage is, as the stories posted in this forum will tell you, hit or miss, and usually miss. It’s not insurance, and you’re at the mercy of some contractor employee in the Philippines who may understand English, but not business nor AirBnB’s rules.
My advice is to slog through reading Air’s Terms and Conditions. You will find many things there you need to know, and many hosts never read them, so if they have a problem, don’t handle it properly, and then get screwed by Air.
I’m lucky, in that my local government doesn’t require permits, but they DO want to collect sales tax and room tax (which supports our local visitor bureau, of which I’m a member).
So my advice is before you start doing all the paperwork is to get copies of everybody’s rules, laws, ordinances, regulations and do what 98% of hosts never do: READ THEM. All the way through. Take notes.
I made a binder. Printed out copies of the most important stuff, highlighted it, made a list of questions and got them answered. Created a bookmarks folder for all the Air related URLs I found.
The other thing is timing. Air gives new listings top placement in searches for the first couple of weeks, so you don’t want to waste it. You want to open at time of the year when the short term rental market is busy, with few places available. You want to be absolutely ready, super clean, all spiffed up, because when you have few reviews as a new listing you want to get as many reviews as you can, so you don’t want to do months and maybe not even full weeks (depending on what is normal in your market) for the first month or so, so you can get a bunch of 5 star reviews (and be sure to read info about reviews on this forum).
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Hi Everyone, thanks very much for all your considered replies on this topic. It is much appreciated