NEW HOST, Need major HELP with transaction fees

Regulations/Tax Issues
1

I’m new to hosting at Airbnb. Knew some acquaintances that needed help financing their properties so I pitched the idea of short-term rentals thru Airbnb. The project was a success, for the holiday, Airbnb was usually very prompt with the support, so I decided to expand this further and get other relatives into vacation rentals. Its been a nightmare, since then

Now, with my first listing, the payout method was set up directly to the owner and I set myself a Co-host. The owner’s bank is in the USA (we are in El Salvador, Central America), so there’s no issue with the payouts. No additional fees.

With the other listings, owners wanted me to handle every single step, so I set up my bank as a payout. Got the papers, SWIFT code, intermediary bank ID, intermediary bank address, etc., I also included my personal bank account in El Salvador. Got the notification that a payout was on its way, the Payout Method went to ‘Default’, but never noticed any of those transfer tests where a company deposits $1 to check. Contacted support, and was told all was fine. 1 day before the funds were supposed to arrive, I got a Funds Reversal Email. No message about an error. I contacted Airbnb and no real help.

I added the method again, making sure to also include as main the Intermediary Bank Beneficiary’s Bank Account ID, while adding in additional information my personal bank account. Again, 1 day before funds arrive, I get the same Funds Reversal. So, I spent 1 month not receiving the money. I contacted Airbnb and they send me screenshots of Payment Method Default, telling me that’s how its supposed to look…which it had.

So, I decided to use a different bank entirely. Always in El Salvador. I provide the SWIFT code, Verify with my bank they use Wells Fargo and others as intermediaries, and if wire is thru an affiliate bank, they even waiver any comissions. However, when I finally get the money transferred, there was a $20 deduction by Bank of America. The funds were being transferred all the way from Airbnb UK LTD-- half the world away. Then that money got transferred to Worldpay and then finally to my bank where I get another $5 deduction.

El Salvador uses USD as its main currency, we’re located less than 2000 miles from Texas/California (Airbnb HQ in San Francisco) and the SWIFT code helps identify the bank/intermediary bank, yet payment was made from overseas. In my other listing, this never happened. Aren’t funds in America released by Airbnb USA? I need help to solve this, because support has only been jerking me around.

I feel cheated. Airbnb seems to lack transparency.
Thanks.

2

Sorry you are having difficulties.

However as a general point it is never a good idea for co-host to set up a listing for a host under their own profile and receive payments directly for two reasons.

  1. it is not good for the host as it means the co-host builds up reviews and ratings under their own profile. If the host then decides to use another co-host or host themselves they lose all the good will developed for their listing. Which is highly unfair to the host. And means the co-host is not working in the best interest of their client.

  2. It will make things difficult when demonstrating income when assessing tax. You only want to be liable for income less expenses generated from your work as a co-host.

I think you would be better suspending this listing, while you work with Airbnb to resolve the issue.

Before you do this work with the host to set the listing up under their profile under their name with their payment going to them and the co-host payment going to you.

3

I’m a US host with US bank, so I can’t be of much help with the details of how banking is set up.

It’s clear from Airbnb’s payment terms that El Salvador falls into the “Other countries” that get payment through Airbnb UK. It doesn’t matter that you’re geographically closer to the US, Airbnb probably chose to run their payments through UK for tax or other economic reasons.
https://www.airbnb.com/terms/payments_terms

Perhaps you can comb through those terms to see if there’s a gem that will help navigate this mess. From section 24 it sounds like Airbnb UK payments may go through additional payment services.

1 Like
4

Believe me, the closest thing that compares to introducing Airbnb to my family, is like the first shock the cavemen must’ve experienced when first encountering fire… I sat down, explained how Airbnb works, benefits, compared listings around the area, set up an account for the owner and added the listing (took all the photos and made some videos, too). Added myself as Co-host, and owner was primary. Used owner’s bank account. 1 week into the project, I’d be getting calls/messages, to please remove Owner’s contact info, as they didn’t want to deal anything with this (only make sure they got the money hahaha). Not even setting myself as the Primary Host was enough, went to the length of adding on the Listing Notes, that I was the main PoC (along with my phone number). I’ve been in charge of all guest support, supplies, issue resolutions, along with the onsite PoC.

My second “client” didn’t want to deal at all with the process, didn’t even want to use their bank account so they could receive the money. Their only request was for a specific cut. I did inform him about the insurances Airbnb provides, what to expect about prices and the competition in the area. This property, though, doesn’t have as much movement as I wish, even when folks can check my profile and see the properties that I manage, sometimes I still get asked if an specific property has been rented before. If they could easily see the reviews for my main property, that usually have shout-outs for good communication. So I’ve actually experienced the opposite of what you’ve described. It’s hard to build up my rep, when the raving reviews are locked to the listing.

Thanks, btw, for your suggestions here and on the other forum. PayPal a few years ago, was still something that was giving issues when trying to link to an international bank, and even tried their Xoom money transfer, but it was only capable of sending money from the US to ES. I’ll see if anything has changed. Hopefully it’ll be a better alternative.

5

Thanks for sharing that link. I guess you’re right. Never thought this could be the case, not only because of the geographical proximity, but because of the constant exchange of funds between both countries, the cooperation between banks (Citibank at one point even owned one of ES’s largest banks), and how we use the USD as main currency. Thought the SWIFT code was supposed to help route the money to one of my bank’s affiliates.

I’ll definitely will take a closer look at that link and see if it can help solve this situation.

6

$5 will be taken out each time if it is deposited directly into a bank account. That is clearly stated in the Terms of Service. That’s why I chose to have it deposited to my PayPal account for free.

7

One thing that might help the transaction fees, is under the payment settings you can set a minimum payout, so you can wait until you get $1,000 accrued before they send you the payment. So you can find a happy medium between the fees charged and your cash flow needs.

8

What? I have never seen this, or maybe I have not noticed I need to go compare payouts with bank statements. where in the TOS can this be found?

RR