Where do we grow from here: Renting out rooms
CAPE CORAL, Fla. – More people in Southwest Florida are making thousands of extra dollars a year, simply by hosting guests.
You may have heard of websites like Airbnb or HomeAway. They are websites that allow you place your home or a room inside your home, for rent. Renting out a home as a vacation rental has always been popular in certain parts of our area, but now with these sites, the trend is exploding.
Why People Rent Out Rooms
“Of course we do have free beer but we do have a tip jar,” joked retired tavern owner Joan Tribulas.
When Tribulas retired to Cape Coral from the Philadelphia area, she first tried to make some extra money by having a roommate, but that did not work out. Then one day, she stumbled onto an ad online.
“I was on the internet and all of a sudden this Airbnb popped up on the right hand side and I thought what’s this? Rooms rent anywhere in the world. So I went into the site, and I liked it and I signed up.”
And the rest is history. For years now, Tribulas has rented out her extra two bedrooms with one shared bathroom for around $50 a night.
The Financial Gains
“I add in a cleaning fee and then I also add in if there’s extra people…In season I don’t have a room for rent. Um, my place is booked solid from December all the way through March, okay? And I usually don’t have a room for rent. So it’s booked all the time,” she told us.
The extra cash she brings in, makes a difference.
“As of today as of this year, I have– my income has been over $9,000 on Airbnb,” she told us.
The Financial Costs
Tribulas does not want anyone to forget how much money you may have to put into your rental.
“This is not for everyone you know,” she explained. “…You have to make sure you have to make sure you have extra sheets, extra towels. I supply my people with anything they need for the beach. It’s out in the garage. I have chairs, umbrellas, uh toys for the kids.”
She said all the extras do add up. Tribulas also makes sure to provide some sort of breakfast or comforts of home, for her guests.
“I often wonder if I’m breaking even or if I’m making a lot of money at this because it depends on who comes here and how they treat me, you might get invited to dinner with wine,” she explained.
Don’t forget the taxes
What many people may not know is that when you rent out a room or a home, you should be paying taxes on the money you make.
“There’s no way of getting around it because Airbnb sends you documentation every year of what you made or you can take it off online under your account. So you know you have to claim all this. But then again on the other side of the picture, it’s very, very good for write-offs,” explained Tribulas. “Because I can write off my meats, my cheeses, my soaps, my laundry, um– you know there’s many things you can write off.”
But the things you cannot write off include paying your Tourist Development Tax, or TDT, and the state’s sales tax. Anyone renting out a room or a home for less than six months should be paying both of the taxes.
We talked to the governments of Punta Gorda, Cape Coral, Lee County, Fort Myers and Sanibel and all the communities say they are trying to monitor home rental sites like Airbnb to see who is renting, but not paying taxes. If they find someone breaking the rules, each municipality tries to educate the homeowner about the taxes.
In Lee County, they have sent out 5,093 educational letters to people over the last four years who they think should have been paying their TDT taxes but were not.
Airbnb may start to make collecting those taxes easier. An email went out to people in our area stating that on Dec. 1 the company will start collecting the “occupancy” tax and turning it over to local governments. We went online to see what the company meant by occupancy tax and found that it could mean “sales tax” or the “tourist development tax.”
Who is Using Sites Like Airbnb?
“It makes it more personal,” said Marla Montgomery of staying inside someone’s home versus staying at a hotel.
Montgomery, visiting from Mt. Dora, Florida says she originally looked at the home sharing site because of her daughter.
“My daughter had used Airbnb and said you might want to look it up. So I looked it up and I started cruising through and just reading about all the different homes,” she recalled. “I thought I could pick one that was more my personality and I would have a place to sleep.”
Along with more personality in her room, she discovered a big discount in price. Already spending almost $700 for a five-day art class in town, adding another $100 a night on a hotel seemed too costly. Spending about half of that amount by booking with Tribulas made sense. She also decided that she liked the idea of giving her money to small businesses owners.
“I am supporting an artist in New York. I am supporting Joan here, personally. Who am I supporting when I check into the Holiday Inn? Corporate. I don’t know these people,” she said.
Is Renting Out a Room Safe?
“Because of my background, I was born and raised in the tavern business, I’ve toughened up a lot,” said Tribulas.
She explained that Airbnb has safety checks in place.
“Usually there is a reference on Airbnb for the people who come to your home and if you don’t want the booking you do not have to accept it. So it’s entirely up to you and you can email back and forth on Airbnb provided that you do not give out any of your personal information, your phone number, your email– they have to book first. Okay? So it’s– and I feel as thought it’s basically fairly safe. I’ve heard horror stories from people but I’ve had the most wonderful people from all over the entire world come here.”
Her renter Marla Montgomery feels the same way.
“Read the reviews,” she suggested before booking a room. “I write reviews on places I stay, on restaurants I go to, so read the reviews… I do my research and then I trust that it is going to be okay. You know when you check into [a hotel], they say it’s clean, but I don’t know that they don’t have bed bugs. They’re probably more apt to have something I could catch there because they go through so many volumes of people compared to Joan’s bedroom.”
Another aspect to consider is keeping your belongings safe when renting out to strangers. Tribulas said Airbnb tries to help with that.
“If you list your rooms or your home on Airbnb, they give you up to a million dollars of coverage for damage and theft,” she said.
But Tribulas also has a word of caution. If you get someone who is booking with you for the second time and you both choose not to go through Airbnb, you will not be covered by the site’s insurance policy.
“There is a policy that you can buy for your home and it will run you approximately $3,000 a year… I decided to carry it because I was sued so many times in the bar and restaurant business in Pennsylvania and I would like to protect my assets today,” she explained.
Other Rules and Regulations
Besides the taxes, before you decide to put your home or a room to rent on a website, you may want to contact your HOA or local government to see if you are even allowed to participate in short-term rentals.
For example, on Sanibel, rules and regulations regarding short-term rentals have been in place for years. Depending on what part of the island you live on, you may not be able to rent out your home for less than six months.
In Fort Myers, a recent interpretation of the city’s ordinance means no residential home can rent for less than 30 days, but that interpretation is being challenged.