All Forum Posts by: Chase Hoover

My business is an S-Corp.  My wife recently quit her job and joined my business full-time.  We are married filing jointly.  Currently my payroll is set up where we each receive a (very modest) salary.  Are we over-complicating this?  Both salaries are direct-deposited into the same bank account.  Is there an argument for just setting one salary?

@Daniel Dietz Thanks for the detailed response.  This is the type of structure I am planning to pursue with private partners and your explanation helps to clarify the setup.  Specifically the part where you pay your partner back 100% of their investment BEFORE splitting profits.  I would love to see a sample of the 2-page document explaining the arrangement.  Would you be willing to share an example of one, of course with any sensitive info removed?

You have an extended family member, friend, or other connection that has some cash in the bank.  They have mentioned wanting to invest in something besides the stock market, but have no experience or desire to actively control real estate.  They know you are a real estate investor and they have shown interest in investing in one of your projects.

What sort of investment would you pitch them on, and how would you clearly explain how they make a return on their investment?

@Ken Boone I'll clarify, all of our reviews so far (60+) have been mostly 5 stars, so it hasn't really affected the quality of the listing at all.  It's mostly just people feeling like they need to comment on it.  Which actually isn't a bad thing for us, because if people are reading our reviews prior to booking they will know that the wifi won't be great (even though it is clearly stated in the listing).  We've had near 100% occupancy since we launched as well, so it doesn't seem to be scaring people away either.  We'll see how it goes once COVID calms down.  We have had a handful of repeat guests already, and tons more saying they're planning to make it a yearly trip.

We launched 4 river cabins earlier this year that are way back in the mountains.  We went with HughesNet giving us 25mbps with a router extending to all 4 cabins (they're pretty close together).  My wife and I lived there for a couple of months as we were renovating the cabins and it worked fine for us running our management business, though it was definitely slower than what we're used to and streaming tv/videos was not possible.  

Since we launched, I'd say 75% of the reviews or private feedback we've gotten from guests on Airbnb have mentioned the wifi being very slow, although we make it as clear as possible in the listing, check-in instructions, and house binders that the wifi is only useful for checking email and light browsing and we encourage guests to unplug and enjoy their time in nature.  Unfortunately, that is just not the reality these days and if it's not on Insta, it didn't happen.  The families with young kids actually love it because it keeps the kids off the screens, but the younger couples on a "getaway" always say something.

We're letting it ride for now but may look into a T-Mobile hotspot as they just added a new tower nearby.  The HughesNet installer recommended maybe getting a second satellite dish and service to add more bandwidth, but I'm not really interested in getting deeper with HughesNet if I can find another solution.

Are there any brokers out there that are specializing in Airbnb / short-term rental properties? I have seen a few specializing specifically in traditional B&B inns. These brokers also act as consultants for current and want-to-be innkeepers by hosting seminars, providing "inn tune-up" one on one consulting, and speaking at conferences. They obviously cater towards retirees and older generations wanting to buy an inn as a retirement project. There seems to be a growing demand from investors seeking to get into the STR market as it continues to grow. If anyone is specializing in this niche I'd love to hear about your experience.

I did a similar deal earlier this year.  My partner and I structured our partnership 50/50.  We each put up half of the down payment.  He then bought the materials for the renovation and I performed the labor.  There was a slight difference in cost vs labor value which we squared up after renovations as a note payable from the business.  I manage the property ongoing for a 10% fee.

@Emanuele Pani the TDT office told me "unless Airbnb has your login information, there is no way they would be able to pay TDT taxes on your behalf."  Looking at the total taxes collected on the Airbnb gross earnings page they do not add up to 13%, but of course they do not give me any sort of breakdown.  I'm waiting on calls back from "supervisors" from both Airbnb and TDT, so we'll see what they have to say.

Palm Beach County Airbnb-ers:  I checked my Airbnb listings this morning and under "Automatic Tax Collection" I now see "Accommodations Tax (Palm Beach)".  Before, it only showed "Sales & Use Tax (Florida)" and "Sales & Use Tax (Palm Beach)".  

Obviously we have been responsible for collecting and remitting TDT tax monthly on our gross earnings.  I called the TDT office and asked if TDT collection and remittance was now being done by Airbnb because it says this on their platform and they laughed at me.  

I chatted Airbnb customer support (since you can no longer get anyone on the phone there), and after a 45 minute conversation still couldn't get a straight answer.  Literally, two back to back messages from them read:

Accommodation Tax and Tourism Development Tax is the same.

TDT Tax is not a collected tax by Airbnb.

I'm pulling my hair out and have already thrown my phone across the room.  Does anyone have any idea what's going on?  I don't want to keep forking over 6% month after month if it's already being collected and remitted by Airbnb.

That definitely sounds like the path of least resistance, thanks