'DIY' Renting … There May Be Surprises

Renting by Yourself… There May Be Surprises

How often people ask me about renting their condo-hotel units on their own. All they want to know if they legally can do it. But it is extremely rare when they ask if they should do it.

So, even if they can, and they do just that, what is going to happen?

Let’s go from the beginning. The whole idea is that if they rent themselves, then they would not to split with the Rental Management company, and in condo-hotels they take a serious chunk of what they get in rentals. Owners get 45% in Oceanside Inn, or 43.65% in Plaza Resort…

Renting on your own is very tempting. There are several issues here.

1.    People rarely rent themselves better than the Front Desk. Overall result is often not great.

2.    There are serious issue with maintaining the unit, and providing the supplies. Front desk will not help people who rent from you, and you need to be able to respond to every emergency that happens there.

3.    Front Desk follows the laws, and so very often owners do not. And that can cost dearly.

Today I am only discussing the last item on our menu.

In Daytona Beach Area (and maybe in the rest of the State of Florida) if the rent is for less than 6 months and 1 day, it is a short term rental. And this is not just the terminology issue. Long term rentals, short term rentals…

If it is a long term rental, there is no tax involved. Long term rental of residential properties is not taxed. Short term is. So there is a sales tax of 6.5%. But this is not all. You also have to pay 6.5% bed tax, which goes to the County. Front desk collects all that and then sends the money to the Florida Department of Revenue (Sales Tax), and 6.5% to the County.

And if they come to you, this may be a big surprise.

Avoid surprises.