If you happen to have an extra bedroom in your house or you’re away from home a lot, you may have considered putting your home on Airbnb. It seems simple enough and there are people who swear by it. We’ve all heard of someone who was able to finance a vacation or a mortgage solely on their Airbnb profits. It’s a great idea, but maybe cool those jets for a second before jumping right in and welcoming strangers from the internet into your home.
Yes, there are a lot of preparations that need to be made for your house or room to be Airbnb-ready. Plus, the nicer your space is, the better reviews you’ll get the and more money you can make. Before you go full hotel concierge though, there are a few things you should probably look at financially. It’s nowhere near as much fun as picking out throw pillows, but hey, not everything in life is.
Yeah, gross, we know. But if you don’t look into your tax situation, sooner or later that’s going to come back to bite you. The profit you make from renting your house out is income, so that means you need to pay taxes on it, just like you would on any other money you make. The types of tax you pay on your rental depends on the services you provide to your renters. If you’re just offering the space, your profit is rental income. If you’re offering more though, your bnb may, in fact, count as a business and be subject to different taxes. This page by TurboTax can help you figure out what kind of taxes you need to pay and how to report them.
Get some. Sure, there are people out there who will tell you how they’ve only ever had delightful people stay at their place, but there are just as many horror stories out there. Even if no one ends up having a house-trashing banger at your place while you’re away, accidents happen. Make sure you know what your home insurance covers (probably not renters) and then go from there. You can also purchase home protection insurance through the Airbnb website.
Your responsibilities as a host
Airbnb isn’t just about providing a space for someone to sleep. As a host, you also have hospitality and responsibility standards you must meet for your guests. These standards include meeting safety requirements, child-proofing, providing adequate climate control, managing occupancy limits and providing information to your guests about all of the above. You might also need to get permissions from a landlord, neighbours or a property manager.
Other rules or permit requirements
All that and we still haven’t even talked about the government yet. There might be certain rules and restrictions from your local government that dictate how (or if) you run your bnb. Again, the Airbnb website has some comprehensive pages on local regulations for Ontario, Montreal and Quebec. If you’re not in one of those regions, be sure to check out the rules in your area.
Remember: Airbnb may be a really cool way to make money and travel on the cheap, but you need to protect your home and yourself. When in doubt, click around the Airbnb FAQ for help. Then you can get back to selecting those throw pillows.