I often align with creative people. In the past, I wondered why, because I didn’t feel like I had any discernible art-form. Then, one day, while interviewing a guest on Up In Your Business, I realized that business itself is creative and that problem solving with others, in the frame of business, is my art-form.
So, it’s no surprise, when I recently found myself in possession of two empty rental properties, that my creative juices went to work. Rather than fix up these two places for long-term rental units with all the long-term wear-and-tear, why not check out the burgeoning short-term rental business (i.e. Airbnb)? In the short-term scenario, renters barely even unpack before they’re gone again and, instead of getting a monthly fee, you get a nightly fee, which is about 50% higher.
My brain went to work. “Are the rules different for short-term verses long-term rental income and what constitutes long-term rental in Little Rock, Arkansas?”
Just as I was refurbishing my rental property and contemplating my new business model and guest amenities, an email from my neighborhood association arrived with a meeting date to discuss the growing short-term rental trend sweeping the WORLD. Kismet!
This is what I learned:
- Short-term rental in Little Rock, Arkansas is defined as being under 30 days.
- Long-term rental is filed on your income taxes.
- Short-term rental falls under the hotel and restaurant business with an additional city tax for the Visitor’s Bureau. But, if you list your rental property through a reputable site, like Airbnb, they will hold out these taxes and pay your city for you.
- Airbnb wants to be successful in all ways, so they even self-insure your property should a fire happen while one of their users is staying there.
But there are social concerns and property values to consider and no one really knows, yet, what they might be.
For instance, in the French Quarter of New Orleans (which is an anomaly), almost all long-term rental properties are now short-term. Great for the visitor and visitor information center, but not necessarily great for a neighborhood whose residents want to live there permanently.
According to the chairperson at our neighborhood meeting: for now, this is a runaway train bound for who knows where.
I hear the whistle blowing and, for now, think I’ll get on board.