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How to Cash In on Short-Term Rentals Like Airbnb, VRBO

Published: Friday, May 12, 2017 @ 2:36 PM

You can make some serious money renting out your home if you don’t mind strangers singing in your shower. But the finances of hosting on Airbnb and VRBO can be tricky.

Before cashing in on your space, learn about the market, expenses and taxes you’ll encounter.

Think like a small-business owner

Hosts are entrepreneurs. They must rent their home legally, compete in a crowded marketplace and choose a smart listing price. Here’s how to pull that off:

Create an attractive listing

Research how to make your property stand out among local hotels and other rentals. The internet is full of guides to creating the perfect listing, and Airbnb offers a “toolkit” on the subject.

To summarize some of the most important advice: Post enticing photos. “Images are what sell properties,” says Scott Shatford, co-founder and CEO of Airdna, a service that provides rental data and analytics to hosts. “Whatever you’re writing about yourself, it doesn’t mean anything unless you have beautiful images.”

Shatford recommends landscape-oriented photos that show the space as clean, well-decorated and full of potential. “What you’re trying to sell is what you can do in an Airbnb rather than a hotel room,” he says. So make sure to include pictures of the well-stocked game room, for example, or the shops and restaurants around the corner.

Pick the most enticing shot for the primary image, the one people see when scanning local listings. “Having that one picture that makes someone click on it is really the most important thing you can do,” Shatford says.

Make sure the price is right

“A bunch of people are kind of guessing the value of their home,” says Michael Quinn, brand manager at Wheelhouse, which makes software that analyzes data and local demand to set nightly prices automatically for hosts’ rental properties. Many of the hosts he’s talked to set their prices too low in an attempt to undercut the competition. But, Quinn says, “you should be getting what your home is worth.” Plus, a cheap listing can turn off potential guests who wonder, “What’s the catch?”

Airbnb has a Smart Pricing tool, which, according to its website, “lets you set your prices to automatically go up or down based on changes in demand for listings like yours.” You can turn to tools such as Wheelhouse and Airdna to help determine the best price to list. Or, set your own prices with a few tips in mind, from Shatford’s blog, rentingyourplace.com:

  • Compare your property with similar rentals in the area to gauge about how much to charge each night
  • Charge a little less than the competition until you’ve racked up a few positive reviews
  • Anticipate local events that bring in out-of-towners, such as conferences, marathons and music festivals. Hike up the nightly rate during those events

Plan to spend money

“I wish I would have known of all the expenses associated with renting a home,” says Sally Kane, who rents her West Virginia home through VRBO, Craigslist and a local rental agency. With so many guests, you’ll have to shell out more for cleaning and property upkeep than you would for one family.

“Rental properties suffer a lot of wear and tear,” Kane says. “I must frequently replace towels, linens, comforters, dishware, pots and pans, deck furniture and other items that become worn with heavy use.” She adds higher utility bills, as well as frequent cleaning and lawn services to the list of renter expenses.

Plan to pay Airbnb and VRBO, too. Airbnb charges hosts a service fee of about 3% for each reservation subtotal. The majority of hosts using VRBO choose to pay a flat rate of $399 per year, but they also have the option of paying an 8% commission per booking instead.

Document rental expenses, income for taxes

If you rent out a home for 14 days or fewer throughout the year and live there the rest of the time, the IRS doesn’t require you to pay tax on that income. Rent for more than 14 days, and it does.

You can likely deduct expenses such as those towel replacements and cleaning services. But organization is key. Alexis Sitka, who rents part of her family’s house in Fort Myers, Florida, tracks her expenses in a spreadsheet and keeps receipts in an envelope. She even has a separate bank account for Airbnb transactions.

The websites of Airbnb and VRBO suggest hiring a tax expert. The following resources may be helpful as well:

Once you’ve sorted out the money matters, you’re ready to rent and make that extra income.

You may even enjoy meeting those strangers who used all your shampoo. Sitka and her husband enjoy exchanging travel tips with their guests. “Some of the people we’ve met have become friends on social media,” she says. “It’s fun to stay in touch.”

Laura McMullen is a staff writer at NerdWallet, a personal finance website. Email: lmcmullen@nerdwallet.com. Twitter: @lauraemcmullen.

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Toddler toys, decorative pillows, and water bottles among the latest product recalls 

Published: Friday, April 20, 2018 @ 2:41 PM

Toddler toys, decorative pillows, and water bottles among the latest product recalls

Children’s xylophones, water bottles sold at Costco, and 21 styles of decorative pillows are among the latest recalls announced by the Consumer Product Safety Commission. 

The Petit Collage musical jumbo wooden xylophones made by Wild & Wolf are under recall because the ball on the end of the stick can detach and pose a choking hazard. 

There is one report of the ball separating and another report of a loose ball, but no injuries.

They were sold at Barnes & Noble, Urban Outfitters and other retailers.

Don’t let your child use the toy and contact Wild & Wolf at 855-215-5879 to receive a free replacement beater stick. 

Reduce Hydro Pro Water bottles are being recalled over lead paint. 

They were sold in two packs with a dog and lamb design printed on the outside.

No one has been hurt, but the pink paint on the outside of the bear bottles contain levels of toxic lead that exceed federal standards.

Don’t use the recalled bottles and contact Base Brands at 833-600-2887 or return them to place of purchase for a full refund or replacement bottle. 

Decorative pillows by Primark are being recalled because they may catch on fire. 

No one has been hurt, but don’t use the cushions which come in 21 shapes, sizes and colors, click here for full product codes and descriptions. 

Contact Primark at 855-215-5829 or return the pillows to the store for a full refund. 

One million Square D safety switches are under recall because the could shock or electrocute users, although no injuries have been reported.

The power may stay on when in the “OFF” position on several catalog numbers of the general duty switches made by Schneider Electric. 

Contact Schneider Electric at 877-672-1953 or click here to find out how to inspect the switch, receive free service support, and a replacement switch. 

Pressure washer surface cleaners by Briggs and Stratton are being recalled because  the spray bar can fly off and cause an injury. 

One person reported needing sutures on a cut to the knee after being struck by the bar.    There are four other reports of the bars detaching from the central hub. 

3000 PSI Briggs and Stratton and Crafsman branded surface cleaners are involved in the recall.

Stop using the cleaners and Contact Briggs and Stratton at 877-370-7505 to receive a free replacement. 

RELATED: Recent Recalls from CPSC 

Jo-Ann Stores are recalling string light sets which can break and cut you.

Two people have  been cut by the decorative glass jars in the Jo-Ann’s Makers Holiday 10-count LED string lights. 

Don’t use the lights and contact Jo-Ann stores at 888-739-4120 for a full refund. 

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Polaris is recalling Ranger XP recreational off-highway vehicles and Phoenix 200 all-terrain vehicles due to injury and crash concerns.

Multiple model numbers of the 2016 and 2017 Ranger XP ROVs have seat belt brackets that can separate from the frame. No injuries have been reported.

All model year 2014 through 2017 Phoenix ATVs are being recalled because of nine reports of a damaged throttle limiter, with one minor injury.

Stop using the ROVs and ATVs and contact Polaris at 800-765-2747 for a free repair.

For more on these and other recalls visit CPSC.gov.

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Local students learn how to combat scams, fraud

Published: Wednesday, April 18, 2018 @ 1:08 PM

Students in the Miami Valley are learning to recognize fraud and scams, and finding out how they can protect themselves from these potential money pitfalls.

Several schools in our area teach a free consumer life skills and financial literacy curriculum called FoolProof. 

The goal of the web-based, interactive coursework is to teach a healthy dose of skepticism in a scam-filled world.

Related: "Shimming” is the latest threat to shoppers

Kettering, Xenia, Franklin, Stebbins, Greenville and Lebanon high schools offer FoolProof classes.

News Center 7 consumer reporter Rachel Murray will find out more about what the students learn and what they can teach us about avoiding scams and fraud. 

Watch tonight on WHIO-TV at 5pm.

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Audit-proofing your taxes 

Published: Wednesday, April 11, 2018 @ 11:29 AM

Audit-proofing your taxes

First, the good news.  The IRS is auditing fewer taxpayers.  

In fact, audits are at an all-time low. You can’t completely audit-proof your tax returns, but there are ways to make your chance of an IRS investigation less likely. 
Failing to report taxable income and cryptocurrency income, are among Kiplinger’s Personal Finance magazine’s list of audit red flags.

Math errors, sizeable donations, home office deductions and deductions of unreimbursed business expenses, for example, commuting costs and clothing, are also going to raise eyebrows at the IRS.

RELATED: IRS ID theft prevention steps appear to be working

One of the biggest red flags is income.

The more money you make the more likely you’ll be scrutinized by the IRS, according to Kiplinger’s Personal Finance magazine.  

If you make $200,00 or more, there is a one in 80 chance of an audit, and if you make more than $1 million your odds are one in 25, according to Clark Howard’s website, Clark.com.

News Center 7 consumer reporter Rachel Murray will have insight from a local tax preparer about ways to audit-proof your tax return tonight on WHIO-TV at 5.

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‘Shimming’ has emerged as the latest threat to shoppers

Published: Tuesday, April 10, 2018 @ 1:58 PM

Shimming has emerged as the latest threat to shoppers

There’s a growing threat to your credit and debit card information, and you might not be aware of it.

It’s called “shimming.” 

New Recalls: power banks, PAW PATROL hats and more

 Scammers insert paper-thin devices into credit card chip readers that can copy your data. 

The information can’t be used to make a chip card clone, but it can be used to create a traditional mag-stripe card, which could be used to fraudulently make purchases or withdraw cash, according to Creditcards.com.

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