Wondering what financial relief options are available for STR owners and managers in this turbulent time?
Then you will definitely want to listen to this TDG podcast with CPA Holly Webb. In addition to her work as a CPA in California, Holly is a vacation rental owner, so she knows all too well the difficult situation in which we find ourselves—not just at zero revenue, but at negative revenue.
Her knowledgeable Facebook posts about the CARES Act were a beacon in the storm and I couldn’t wait to have her on the podcast.
Also joining in is Tyann Marcink, a multi-property owner in Missouri who has been through the application process for many of the available relief options. (In fact, she got some good news about one of those applications in the midst of our recording!)
You don’t have to chart these choppy waters alone.
We covered a lot of ground in our 50-minute chat. Here are some of the highlights, timestamps if you’re following along with the audio, and relevant links to government agencies:
COVID-19 Financial Relief Options for Vacation Rental Professionals
Paid sick and family medical leave for W2 workers and self-employed individuals. Businesses, LLCs, partnerships, management companies, support cleaners can apply for this on their 2020 taxes.
[8:45] CARES Act
There are several parts to the complicated CARES Act, but in our conversation, we focused on the ones that can benefit STR owners:
Economic Injury Disaster Loans (EDIL) to help small business owners apply for low-interest loans, with some qualifying for up-front advances that don’t need repayment.
The Paycheck Protection Program (PPP) is another option for small businesses that will allow them to continue to pay employees (cleaners, maintenance, or anyone else you are paying on a W2). If you are able to retain your full staff and payroll, you may qualify for loan forgiveness.
[28:30] Forbearance on your Mortgage.
Contact your bank to learn more about the possibility of forbearance, which can include postponing monthly mortgage payments (principal & interest) for up to three months, with possible extension beyond that. This is not without a cost, so be sure to crunch the numbers with your banker so you know exactly what you are signing up for.
[38:12] Small Business Loans/HELOC
You can apply directly for a small business loan or a HELOC (Home Equity Line of Credit) with your bank. This can take time (and a lot of paperwork) and is not immediate, but it could provide some much-needed relief over the long term.
[40:52] Car Loans
Car lenders are providing relief, as well. Call and ask for forbearance for your car loan and postpone your payments. Again, do be sure you understand the financial impacts of postponing payments.
[41:00] Property Expenses
What can be turned off at your property, or put on seasonal hold, to help you save on monthly expense (e.g. WiFi, cable, landscaping, garbage pick up, etc.)?
[41:37] Property Taxes
If, like me, you pay a premium in property taxes for running a STR, now is the time to start advocating for relief, especially if you’re under a government-mandated shutdown. Contact your assessor and ask them if there will be financial relief for property taxes. They are likely not thinking of the specific situation of vacation rental owners yet, but if they get enough calls they may start paying attention.
[43:48] Credit Card Payment Processor
Is your credit card processor refunding fees for the thousands of dollars worth of credits you have been processing? Best to review your statements to see if you have been refunded your fees. If not, contact your credit card processor.
[46:18] File an Insurance Claim
It might be that insurance companies won’t cover a pandemic, but it’s also possible the insurance commissioner will make payouts mandatory. Contact your STR insurance provider and add yourself to the list of those who want to be “in the know.” Take the time to read your insurance policy to see if you might be entitled to loss of rent coverage.
[49:50] Airbnb-Specific Relief. Airbnb has two relief options for hosts
This $250 Million initiative is to help hosts who suffered the financial burden of having their bookings canceled under Airbnb’s extenuating circumstances policy. This initiative is automatic for anyone who had cancelations prior to March 14, 2020 through May 31, 2020.
If you meet Airbnb’s required eligibility criteria, you will be invited to apply for a grant. This program will begin in April 2020.