Can I use AirBnB to pay my mortgage?

[mmdia82]

I (35) am just about to close on my first apartment and I will be living in it alone. It's a 3 bed (two doubles and a box room) in an area that is popular with tourists pretty much all year round. I can just about afford to pay my mortgage out off my salary but it would be nice to have another stream of income coming in.

It looks like my mortgage is going to be €990. I checked on AirBnb, and it's not uncommon for a place that can sleep 5-6 adults to go for €400-500/night... in other words I could pay my mortgage by renting my place out for 2-3 nights a month around bank holidays and during other major events.

I quite often go home to my parents or visit friends in other parts of the country on such weekends anyway, so it wouldn't really inconvenience me and might actually be something that prompts me to keep my place up nicely.

So, I am wondering about downsides:

• What are the tax implications?
• How likely is it that my place is going to get completely trashed?
• Any others I haven't thought of

Appreciate any advice you have on this.

 

[emily2019]

@mmdia82 Yes you can do this and people do do it. I've a neighbour who has a campervan and his trips in Ireland are dictated by whether or not he has an Airbnb booking that weekend or not. If he does then he and his partner head for a campsite somewhere paying €20 a night to park while his house is rented out at €200 a night. It's a good hack as they like to head off in the camper an anyway in summer

Couple of things to think of
-your entire house needs to be spotless like 5 star hotel spotless or you will get bad reviews. That means a hell of a lot more cleaning that you might normally do. It means cleaning out all your kitchen drawers way more often than you normally would, it means dusting all the skirting boards more often and so on. These are not small jobs so you will find yourself spending hours and hours cleaning. If you get a cleaner that costs and knocks your profits but it would be deductible from them for tax purposes
- Insurance can be got for Airbnbs but be mindful the policy will be a 12 month one and it costs more than landlord insurance. I dont know the cost but reckon it would be north of €700 a year

 

[killalljewishpeople2934]

@emily2019 Thats a great post

 

[renny562000]

@mmdia82 Honestly if you can barely afford the mortgage, you need to rethink getting such a large mortgage.

I also thought the banks would make sure you are can afford it.

As for AirBnB, be more tax efficient to rent out a room (tax free up to 14k).

 

[mmdia82]

@renny562000 I would rather not share my apartment.

 

[renny562000]

@mmdia82 Fair enough, I probably wouldn't either.

 

[thanksmom]

@mmdia82 Tax is around 50% of income.
Air b n b may report you to revenue automatically depending on number of nights, income etc.

In terms of trashed you can be picky but its a risk.
You also just have general won't clean up and you need to preclean before tenant arrives.

You may have rules against short term let in you apartment legal documents. The neighbours will soon cop on and protest after one party event. In apartments the management have strong vague powers.

How do you intend petting visitors in, will you have to hang around until they show up late or not at all? What happens if they don't leave on time etc? Can you give them gate code and can you automate entry with keypad or have a lick box for key?

What happens if something small is broken like plates, coffee machine, tv remote lost etc?

What happens if they get sick on the carpet.

What if you are home and they arrive back at 3am and party.

This is actually a part time job.

I would suggest start small and only book a few weekends and play it by ear. It may not be worth the hassle factor.

 

[babrowngyal]

@mmdia82 Tax has been mentioned.
In terms of the place getting trashed - would you consider renting the two doubles as rooms occasionally (for events etc) and stay in the box room those nights? It would probably lessen the amount you could get, but for the piece of mind, ease of checking people in and out etc, it might be worth it.
Another factor is whether the development rules allow whatever avenue you take.

 

[resjudicata]

@mmdia82 I think Airbnb have insurance built in so you don’t need to worry about additional insurance, it’s a great way to meet new interesting people too. Not financial advice.

 

[aussiedon]

@mmdia82 You'll have to pay tax on your airbnb income. If you have a my revenue account you can do it there.

 

[emily2019]

@mmdia82 Yes you can do this and people do do it. I've a neighbour who has a campervan and his trips in Ireland are dictated by whether or not he has an Airbnb booking that weekend or not. If he does then he and his partner head for a campsite somewhere paying €20 a night to park while his house is rented out at €200 a night. It's a good hack as they like to head off in the camper an anyway in summer

Couple of things to think of
-your entire house needs to be spotless like 5 star hotel spotless or you will get bad reviews. That means a hell of a lot more cleaning that you might normally do. It means cleaning out all your kitchen drawers way more often than you normally would, it means dusting all the skirting boards more often and so on. These are not small jobs so you will find yourself spending hours and hours cleaning. If you get a cleaner that costs and knocks your profits but it would be deductible from them for tax purposes
- Insurance can be got for Airbnbs but be mindful the policy will be a 12 month one and it costs more than landlord insurance. I dont know the cost but reckon it would be north of €700 a year

 

[freemason2012]

@mmdia82 I’d recommend guest ready as a management company. They take ~18% but make sure the place is spotless before and after the guests. They do all the back and forths, letting the guests in and dealing with any problems. We used our 90 days over the summer once and found them really worth it. They also took professional photos for the listing which I’m sure helped get better rates.

 

[stacid88]

@mmdia82 You’ll be hammered on tax. Airbnb share their data with Revenue (at least they have before) so don’t go into this expecting not to pay. The year I did Airbnb, I filed my tax incorrectly and Revenue took it again by reducing my tax credits. It was a head scratcher to get sorted.
If you don’t want a longer term roomie but still fancy a bit of pocket money, try looking for students coming to do a semester abroad. Interview for one who wants to go travelling to see the country every weekend

 

[fortress]

@mmdia82 Former Airbnb customer support here:

Depends on where it is. If it’s a place where people goes to party, don’t do it.

If it’s a place where people go to see stuff, could be a good option, BUT if you live there, are you going to be emptying all your stuff all the time?

When you rent whole house on Airbnb you expect it to be empty, not with the owners stuff in the toilet, wardrobes, kitchen, etc.

What about your computer, video games, cooking stuff. Do you mind people touching all that? Maybe even taking it with them?

If you are a minimalist, could be an option, but wouldn’t recommend it.

 

[lordson_devasia]

@mmdia82 Feck Air BnB. Rent it a room or buy a smaller apartment.

 

[mmdia82]

@lordson_devasia I don't want to rent a room out.

 

[mmdia82]

@twinklesamir No, I'll be doing weekend lets during which I myself will be gone away - I won't be renting a room to anyone.

 

[twinklesamir]

@mmdia82 So you want to rent your rooms out on the weekend, got it.

 

[mmdia82]

@twinklesamir Is there a point to you being pedantic here or...? What I'm asking is clear to everyone else on the thread.

 

[twinklesamir]

@mmdia82 Its clear to me now also as per my previous comment.