STR's to be Taxed as Commercial Property

[Terrel L. Shields]

Short-term rentals now taxed as commercial properties in Jackson County

Jackson County has reclassified short-term rentals as commercial property. This means some property owners are surprised to see a significant increase in the amount they will pay in taxes this year.

www.kshb.com

 

[Dublin ohio]

Short-term rentals now taxed as commercial properties in Jackson County

Jackson County has reclassified short-term rentals as commercial property. This means some property owners are surprised to see a significant increase in the amount they will pay in taxes this year.

www.kshb.com

That should be interesting. So what happens if someone buys a SFR that is used as an str but decides to owner occupy.............................

 

[Fernando]

Poor STRs. Everyone hates them.
In Barcelona, the natives hate the tourists and blame STRs in the shortage of affordable housing and increasing rents.
STRs provide shelter and helps tourists and social mobility.

 

[Terrel L. Shields]

STRs provide shelter and helps tourists and social mobility.

That's what motels and hotels are for

 

[Tom D]

That's what motels and hotels are for

I though motels were for the local hookers.

 

[Terrel L. Shields]

I though motels were for the local hookers.

I lived out of motels for 20 years when in the oil patch. The first hotel I saw what were obviously hookers was the Fairmont in Dallas at a convention. They were dressed to the 9s and taking pix of each other to text to their clients. There was a Mercedes-Benz convention going on. The hookers in the oil patch hung out at the truck stops. Rock Springs, WY was notorious. Never encountered them in Evanston, WY. The competition from free BYU college girls on weekends was too fierce. They all flocked to Evanston to party since Utah had state stores, no bars, and so they all ended up at the closest bar in Wyoming and that was Evanston.

 

[J Grant]

States and municipalities should go hard after the STR and really outlaw them. They have driven up residential prices out of reach of owner-occupants and locals - a quarter or more of the listings I see on MLS when pulling comps talk about the income or potential of using the property for an Air BNB

 

[Terrel L. Shields]

potential of using the property for an Air BNB

To me I see a saturation of that market. I appraised a property 9,000 SF last year. It was not for sale...yet. They listed $1.9 million and sold for 1.55 million. I was 'off' by about 12%. I think the reason they sold was because they developed a more valuable property nearby that had 2 duplexes, a 4,000 SF house, a caretaker's house, and about 10 RV spaces (which they intended to expand.) It was far more rentable than the $3,500 a night they were getting out of the "big house." But a high number of homes surround this lake that are either VRBO or AirBnB.

I doubt they were doing much more than breaking even. The place was 8 bed and 8 bath and designed for multiple families with a theater and indoor pool as well as a boat dock. OTOH, they bought the 15-year-old property for $475,000 in 2018. They came out pretty good. On the market about six months.

There are 73 Airbnb listings around Grand Lake, Oklahoma. 23 VRBO's. Never mind there are dozens of resorts, cabins, and motels there.

 

[alebrewer]

Lots of news currently about STR's displacing residents in touristy areas in Spain/Portugal. I think some of the glitter may be wearing off these things...

 

[Gobears81]

a quarter or more of the listings I see on MLS when pulling comps talk about the income or potential of using the property for an Air BNB

Maybe I'm early in predicting this, but seeing some evidence unrelated to STRs which suggests that we could be at the top of the cycle.

STRs get fantastic rates, but I could stay at a nice hotel and have plenty left over at those levels. Nothing cures excess like a recession - and those brokers that are talking about the $250/ night gross income might have to modify their pitch when owners have to cut their rates in half.