Call us crazy

 

 

We are starting a short-term rental business!

 

 

When my parents passed away earlier in 2021, they gifted the house to me. Well, not fully gifted; I was given the option to take over their mortgage. 

We have had so many precious memories at the lake house; for 22 years, my parents lived there and worked on creating the most beautiful oasis. My nephews love fishing, kayaking, ice fishing, and I am sure at some point my niece will want to stay, and my kids will go for a vacation. I can see meeting my grandbabies there and playing at the beach in the summer months. So I thought, how am I going to keep this house? 

I could rent it, but that completely defeats the purpose of keeping it. We wouldn’t be able to stay when someone else is living there.

I reached out to a realtor recommended by a dear friend and talked through ideas with her.

We could sell the home.

Rent it out long term

Or…

Do a short-term rental. Like Airbnb, VRBO sites like that. 

She stressed that if it was possible to keep the home at least for a few years, she highly suggested it. Too many times, she helped sell a family home after death only to have the family regret selling. 

I thought… Well… let’s look into the short-term.

I talked with my husband about it, and we both got excited that maybe… just maybe, this would cover the expenses of the house annually! Then the home can be enjoyed by all our family (and other families) without it being a financial burden. Not to mention the tax deductions we would then have since it would be a business. 

We made this final decision, all in, a few months later after we both dug into researching all about short-term rental’s pros and cons.

I feel like months down the road, I’ll have another post telling all, but like having your first child, it doesn’t matter how much you research the topic or how much advice you are given; we are not going to know what it is like to have an Airbnb, VRBO, or any sort-term rental until we dive in ourselves.

 

 

Midlife crisis?

 

I’m in my late 40’s so call it a midlife crisis, but I’m excited to have this new adventure! It is almost like God lined this all up. Funny, when you look retrospectively, you see how He can orchestrate plans. Put people in your life at the right time, open some doors, and close others. But that’s an entirely different post! I thought I would document all along the way. The nitty-gritty, good and bad, all of it. Just in case… someone else may want to give it a try too.

This is our lake home in Michigan, isn’t it the most beautiful vacation home ever?! Yes, I am biased.

 

 

The beginning

 

 

In the beginning, my husband and I did SO MUCH research. We found Facebook groups to network with others in short-term rental businesses. Also spent many hours researching different sites advertising the rentals, even had a call with a short-term rental guru to see about coaching. The coaching would be well over $2,000, and we didn’t really want to invest that when we needed to invest in other things like bedding and furniture/decor. Beware of scammers portraying they are experts, and for a “small fee” (small fee my butt some were $10,000), they would teach you everything you needed to know to have a successful rental. All the while, they have none. 

 

 

During this research phase, a well-known entrepreneur I follow on Instagram  Jesse Lee, spoke about taxes, entrepreneurship, and how important it is to have an LLC and an excellent tax strategist. Remember how I said God lines up the path? This is an example. We decided to book a call with Prime Corporate Services and see if this was something we should do.The call was fantastic and really made us feel better about getting into this new business. We had everything we needed tax and legality-wise handled by other people. THIS was a good investment because the last thing we need to do is mess up and not have our ducks in a row with the IRS. Starting our own business, with a dream of working for ourselves one day, from wherever, is a dream that we are excited about and even through excitement want to be sure things are handled right.

 

Start an LLC

 

We decided on forming one in Nebraska for my other network marketing companies and sales rep endeavors I have and, at the time, my in-home daycare and another for the house in Michigan. Our Nebraska LLC is our umbrella LLC. This just means all other LLCs will lead back to the Nebraska one. We learned for every state you have a short-term rental (Airbnb, VRBO), you need an LLC in that state.  An LLC doesn’t cost much, and it shifts all liability from your personal to the business. Meaning, if we were to get sued for an accident on our property, our individual home and finances wouldn’t be in consideration. 

It was super helpful to use this service! They got the documents ready, approved our name with the state, and told us what was required in Nebraska and Michigan to finalize the LLC. Every state is different, so it’s important to know what’s required.

 

Nebraska

 

Nebraska required me to put an ad in a prominent newspaper once a week for 2 weeks, announcing our LLC as a new business. I chose the Lincoln Journal. They were great to deal with, we were able to do everything through email, and the cost was a little under $30. After the ad ran for the time required, the paper sent me an affidavit stating that process was complete. Next, I had to file that with the State of Nebraska. Again, I was able to do this over the internet on their site. It was about $25, if I remember right. Michigan had no additional requirements. Easy peasy

Registered Agent

 

It is best to have a registered agent; this is where all mail goes to. They will get the IRS communication and filter through any junk mail. Otherwise, it would all come to our home address, and we may end up missing an important deadline for our taxes. There is a monthly fee for this service but it is very minimal. It sounds like a lot, but it really wasn’t difficult at all, especially with the help from Prime Corporate services. Their staff was super helpful by phone and email; they even looked over my ad to ensure it was correct and required.

Bank account

 

Next we needed to open up an actual business account. We personally chose a different bank than where we do all our personal banking to keep a division between the two. Since an LLC is a pass-through entity, we can move or take money at any time from our business account without penalty. Still, I felt the division would be easier for me to keep track of in our financials. We went with a bank that is very friendly with businesses, they love supporting a new start up and there are no fees to start, none for monthly and our checks were even free. Be sure to ask all the possible regulations and fees a bank requires. There are banks that will nickel and dime you for everything!

 

Who is going to do all the management when we live 1,000 miles away?

 

 

Evolve

When it comes to hosting and advertising a short-term rental, the options are do it all yourself or hire a management company. We were recommended a management company called Evolve by a realtor. This was a great okay to start! We booked a free call with them and got a lot of the details answered we were looking for. This management company comes to take professional pictures of the property! The images are what “sells” the experience. They also have one million in liability and $3,000 in damage protection on every booking. This is on top of the Insurance we will have ourselves through our own policy. Evolve will  handle ALL the booking communication and arranging cleaners and maintenance. The only problem with this company is they didn’t currently have cleaners in our area. If we could find cleaners, they would still communicate with them. Part of successful bookings is SmartRates. This monitors competitors rates and changes ours up and down by a little bit to be competitive.

Buymoretime

 

                The next management company we looked into was a newer (18 months) management company called Buymoretime. I found this on one of the Facebook Groups we joined. This outfit would do EVERYTHING for us. Even order supplies when needed for a small fee, train our cleaners to be 5star, hire maintenance when required, and advertise our home. The only thing they didn’t do was cover the photoshoot. That isn’t a huge deal; we could always hire someone professionally. Their fee was a little better overall. Instead of a percentage per guest stay, it was a flat fee once a month and the first month is free! Both of these options had no contracted time we had to agree to; we could end the business relationship with them at any time. 

Private individual

 

The last option we possibly have is someone locally who already has an Airbnb themselves that would take over our property for a fee. There is not much information on this option yet as we are talking details, but we do know that we are NOT doing this all on our own. The customer service needed for guests, check-ins, check-outs just itself is a lot to keep up with. The idea is to have the business run itself.

I’ll keep you posted on which option we decide. 

After we did our due diligence of learning, researching, and investigating, we knew it was time to start clearing the personal things from my parent’s home. This posed a more considerable feat than I imagined. 

 

 

What’s next…