If you live in Philadelphia and not under a rock, you know the Pope is visiting in a few months and bringing with him about 1.5-2 million visitors to the City of Brotherly Love. According to PlanPhilly, that number will likely be more like 3-4 million if other papal visits for Pope Francis are any indication. Mayor Nutter was quoted as saying, "This will be the largest event in the City of Philadelphia in modern history." And if the formulas are correct, the $418 MILLION economic impact will surely make that a true statement.
Philadelphians have jumped on that economic bandwagon and many are looking to rent out their places to the several million visitors who won't have a hotel room. In particular, most Philadelphians are using the new Airbnb site to list their homes. With this influx of rental options, Philly has had to make some major decisions about what these short-term listings mean and how to regulate them.
At the beginning of July, the city legalized Airbnb rentals, making Philly the largest US city to do so. With that legalization came taxation - an 8.5% hotel tax.
So if you too are looking to also host for the papal visit or are just looking to turn some annual income off of your spare space, here's what you need to know:
First off, make sure you are ALLOWED to rent out your space. If you own your home free and clear and its not a condo or in an HOA association, you don't have any legal impediments to renting out your space.
If you are a condo owner or part of an HOA (homeowners association), then you need to review the community regulations. Some buildings and neighborhoods do not allow units to be rented out.
If you are renting your space, you need to verify that your lease allows you to sublease your space. Don't try to just list it and hope for the best - if your landlord sees the listing (and some are trolling these sites!), you could find yourself apartment-less. Most leases allow subleasing with prior consent of the landlord - just read through your lease.
If you are in the legal right to rent out your place, Airbnb is a great place to do it. Like Uber, hosts can be rated so you know the space and the host are legit.
Unlike Craigslist, Airbnb does take a 3% charge of the transaction from the property owner, though the majority of their income comes from the traveler.
You can set up your listings however you want - place them for specific weekends only, like for the papal visit, or keep an open calendar and allow travelers to autobook for available dates.
Just remember that now the city of Philadelphia requires property owners to have a permit if they are going to rent out their space for more than 180 days a year, or a straight month. And with this comes a Philadelphia business license which is more taxation.
Speaking of which.... Now that Airbnb is a legal rental system in Philly, its also taxed. That 8.5% hotel tax is applied, regardless of length of stay. Also, don't forget to include this rent as income when federal tax filing comes around.
While most areas of the city can bring in enough nightly rental for the papal visit to make this taxation and the fees well worth it, do yourself a favor and break out a calculator before you list.
Best practices for listing your home on Airbnb are really similar to listing your home anywhere but with Airbnb there is more transparency for guests so making sure your profile and your home are the best is key.
- First off, take great photos. If you don't have a great camera and/or aren't good with one, hire a pro. A professional photographer costs about $75 - well worth it if you have steep competition. Take 2 hours to clean and 'stage' your home for the photos. Its not that much work and it will surely pay off.
- When listing the photos, don't make the first one a picture of Philly or of a brick facade. People are choosing your home because of its special interior or amazing patio/roof deck so make sure that's the first impression.
- The more information, the better. If all things are the same, the listing with the most information will win out. Travelers who use Airbnb want all the information at their finger tips. If they can make a more informed decision on your listing than another listing, yours will win out.
- When you host, set your place up as if you were a guest. Make sure your best, bleached, yummy-smelling towels are laid out. Provide complimentary shampoo and conditioner - and not out of your soap-scummy, daily container. Make your kitchen accessible - put out the coffee pot in an obvious spot along with the coffee. Leave detailed instructions in a booklet or print out if things need explaining. At the very least, leave a welcome note with your number.
- Lock up valuables. If you are doing this for just a weekend or a few throughout the year, then you probably have your usual stuff everywhere. Most of these items are ok to leave in their usual, concealed spot, but if you have valuables (Rx drugs, cash, expensive jewelry, laptops, etc) then take them with you or lock them up somewhere safe. If you have a closet somewhere you can lock up, this is best to store away stuff. Or invest in a small safe if you need to leave things in the space.
- Finally, but most importantly, check what your space is worth. For seasonal rentals in particular, look at other listings in your immediate neighborhood on the dates in question. If everyone else has a 2 bed apt listed at $200 a night and you were hoping for $400, you'll be awaiting a renter for a while.
For things like the papal visit, you may be able to get more if there are no other available listings or as we get closer to the date, but you still need to be competitive with your pricing. Unlike selling your home, with vacation listings you don't need to rent out, you can certainly try out a higher rental rate if you are only willing to leave for the right number. But if you are out of town anyway and you are trying to make whatever money you can, then make sure your space is going to get chosen with the right rental price. If you have the nicest apartment in the neighborhood, then price it at the same number or a tad higher than the next nicest - you want it to be an easy decision. If you have a small and dingy set up, then make sure its the cheapest thing out there so travelers with limited budgets will surely contact you.
Need some general idea of what your neighborhood is getting? Other than checking similar listings, read this helpful Philly mag write up from March.
Philadelphians have jumped on that economic bandwagon and many are looking to rent out their places to the several million visitors who won't have a hotel room. In particular, most Philadelphians are using the new Airbnb site to list their homes. With this influx of rental options, Philly has had to make some major decisions about what these short-term listings mean and how to regulate them.
At the beginning of July, the city legalized Airbnb rentals, making Philly the largest US city to do so. With that legalization came taxation - an 8.5% hotel tax.
So if you too are looking to also host for the papal visit or are just looking to turn some annual income off of your spare space, here's what you need to know:
If you are a condo owner or part of an HOA (homeowners association), then you need to review the community regulations. Some buildings and neighborhoods do not allow units to be rented out.
If you are renting your space, you need to verify that your lease allows you to sublease your space. Don't try to just list it and hope for the best - if your landlord sees the listing (and some are trolling these sites!), you could find yourself apartment-less. Most leases allow subleasing with prior consent of the landlord - just read through your lease.
Unlike Craigslist, Airbnb does take a 3% charge of the transaction from the property owner, though the majority of their income comes from the traveler.
You can set up your listings however you want - place them for specific weekends only, like for the papal visit, or keep an open calendar and allow travelers to autobook for available dates.
Just remember that now the city of Philadelphia requires property owners to have a permit if they are going to rent out their space for more than 180 days a year, or a straight month. And with this comes a Philadelphia business license which is more taxation.
While most areas of the city can bring in enough nightly rental for the papal visit to make this taxation and the fees well worth it, do yourself a favor and break out a calculator before you list.
- First off, take great photos. If you don't have a great camera and/or aren't good with one, hire a pro. A professional photographer costs about $75 - well worth it if you have steep competition. Take 2 hours to clean and 'stage' your home for the photos. Its not that much work and it will surely pay off.
- When listing the photos, don't make the first one a picture of Philly or of a brick facade. People are choosing your home because of its special interior or amazing patio/roof deck so make sure that's the first impression.
- The more information, the better. If all things are the same, the listing with the most information will win out. Travelers who use Airbnb want all the information at their finger tips. If they can make a more informed decision on your listing than another listing, yours will win out.
- When you host, set your place up as if you were a guest. Make sure your best, bleached, yummy-smelling towels are laid out. Provide complimentary shampoo and conditioner - and not out of your soap-scummy, daily container. Make your kitchen accessible - put out the coffee pot in an obvious spot along with the coffee. Leave detailed instructions in a booklet or print out if things need explaining. At the very least, leave a welcome note with your number.
- Lock up valuables. If you are doing this for just a weekend or a few throughout the year, then you probably have your usual stuff everywhere. Most of these items are ok to leave in their usual, concealed spot, but if you have valuables (Rx drugs, cash, expensive jewelry, laptops, etc) then take them with you or lock them up somewhere safe. If you have a closet somewhere you can lock up, this is best to store away stuff. Or invest in a small safe if you need to leave things in the space.
- Finally, but most importantly, check what your space is worth. For seasonal rentals in particular, look at other listings in your immediate neighborhood on the dates in question. If everyone else has a 2 bed apt listed at $200 a night and you were hoping for $400, you'll be awaiting a renter for a while.
For things like the papal visit, you may be able to get more if there are no other available listings or as we get closer to the date, but you still need to be competitive with your pricing. Unlike selling your home, with vacation listings you don't need to rent out, you can certainly try out a higher rental rate if you are only willing to leave for the right number. But if you are out of town anyway and you are trying to make whatever money you can, then make sure your space is going to get chosen with the right rental price. If you have the nicest apartment in the neighborhood, then price it at the same number or a tad higher than the next nicest - you want it to be an easy decision. If you have a small and dingy set up, then make sure its the cheapest thing out there so travelers with limited budgets will surely contact you.
Need some general idea of what your neighborhood is getting? Other than checking similar listings, read this helpful Philly mag write up from March.
As always, for more questions, please email me at meg.augustin@foxroach.com!
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