If you were in my shoes, short term rental side income question.

arakboss · Jul 30, 2021

The vast majority of this doesn't apply to what I am trying to accomplish at my place but there are nuggets that I can take away.

arakboss · Jul 30, 2021

ma96782 said:
Check about a business lic. and increased insurance coverage.

Rrrrright......no need to point of the "dangers" of what you're planning to do.

Aloha, Mark

PS.....a can remember that time when we (on this forum) were talking about investing in a "rentable property." I injected my $0.02 about the dangers and I added that I had never tried it because I had seen the "problems."

I got a remark/response about not ever climbing Mt. Everest but giving advice about mountain climbing.

Rrrright......so, then COVID hit soon after.

I just hope, that the commentator and the guy (if he bought the rental property) are still in good shape with their investments. Yeah.....having a tenant not paying the rent (and cannot be evicted) can be a REAL drain on the finances.

Yeah, yeah......you're talking about a RENTAL on a per day basis......it's different.

So then......as for me?
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I definitely would avoid the long term rental game for those fears and more. A big benefit of keeping your rental period under a 7 day average stay is the way the IRS views the business. With a long term rental the IRS generally views that income as passive income (unless you qualify as a "Real Estate Professional"). Losses from passive activity can only be deducted against passive income. With short term rentals under 7 days or 30 days if sigificant services are provided, losses can be deducted against W2 income. In other words I can deduct losses against my and my wife's income. That could help take the sting out of a loss for the year. I expect I could lose money in year one and two but I am hoping for a profit by no later than year three.

Certaindeaf · Jul 30, 2021

arakboss said:
I might offer some dates where the entire property is exclusive use for cabin rental. Then I can compare demand for shared use of property vs exclusive use. It's 2.25 acres so guest are going to know that each other is there. I have spent many nights at Battleground Lake where they have small cabins right next to tent and trailer sites. Windy Cove loop B in Winchester Bay has about two dozen sites crammed in a less than two acre space. We stayed there the weekend before the 4th of July and it was pretty well filled up.

I've stayed in those cabins, it was pretty cool.

arakboss · Jul 30, 2021

Certaindeaf said:
I've stayed in those cabins, it was pretty cool.

Ignore those questions I thought you were talking about the self service Forest Service cabins. I think they have somebody clean the Battleground Lake cabins between guest.