Hello, welcome back to another great episode. My name is Sarah Karakaian.

I'm Annette Grant, and together we are, Thanks for Visiting.

And this is the Hosting Hotline. If you wanna get your hosting questions answered here on the hosting hotline, go to hostinghotline.com. That is hostinghotline.com. You ask your question and we answer it every Tuesday here on the Thanks for Visiting podcast. And today we have a question from Renee.

Hi, my name's Renee. my husband and I own two long-term rentals and one Airbnb that's about nine months in, um, five stars. Um, Superhosts multiple times. Um, and I think a lot of that. Um, from the information I've got from, from your podcast, so thank you for that. Um, we are currently in contract on another property that is currently a short term rental, um, with lots of great reviews on VRBO and Airbnb and some direct booking, um, that they have. Um, my question is how do you handle future bookings? How do you get that to be transferred over? Um, we are going to do, uh, a few up- updates and upgrades to the property when there isn't any guests, um, in-between bookings. So I didn't know if you had some suggestions on how to handle that, um, the transfer of, of, uh, bookings and, and platforms, so thank you.

Renee, thanks for being a listener. We are so honored that we have been a part of your short-term rental journey, and thanks for calling in. We love answering these questions. I guess my first question back to Renee, and of course we'll go over all the scenarios, but something I wanna let everyone know, our responses would be dependent on what the purchase agreement says, Renee, and, and I'm not sure if, and again, this could vary. I suppose state to state, but more often than not, you know, you haven't purchased a short-term rental. You purchased a home that is listed on short-term rentals, unless you are buying the business. If there's a website, an email list, a brand, social media, and in that case it probably wouldn't be a part of the purchase agreement. There would probably be another purchase agreement for the business that would be separate. But let's pretend you don't have any of that and you're just buying a straight up home property. And so anything that you do to get those reservations and bring them and bring them into you is gonna be something that you negotiate with the seller. And that's probably something that I know in retrospect, hindsight's 2020, you probably wouldn't have had that done before you get into contract with them. But, so these are, this is definitely a conversation you wanna have with them sooner rather than later. How, how you handle this. Are there expectations that they get to see the reservations through. If not, whose money does that belong to? Because the, the bookings came via their quote unquote brand. And I don't know if you're starting a new brand. Um, I mean there's so many things that you can work out with them. I've heard people 'cause 'cause what's something you also wanna know, Renee, is that technically listings follow the host. Listings do not follow the property. So if this home is on Airbnb, on VRBO, technically you cannot inherit those listings. You would start a new listing for the home under your management.

We think keeping it clean is the best. So if, if you are listening to this and you're thinking about buying a property from someone else and they're kind of touting how many reservations they have, how many five star reviews they have, that is great. But please do not think that that is going to be any part of your business moving forward. And I think a lot of real estate agents, I think a lot of hosts like to promote that. Um, I see it. Every single day on Zillow, that is not the case. So if you wanna start your business, clean, healthy.

Yeah.

The listing needs to be you, the reservations underneath you, because there is still so much gray area on who's gonna be cleaning your property. If it's someone else's reservation, who's gonna be messaging the guests? How are those funds going to be transferred from their account to your account? And we hope that that would go smoothly, but you never know. So I, and I heard you say that, I think they do have a direct bookings. You do need to make sure that that is transferred to you. You know, that's gonna be their domain name. You would probably, you're gonna need to start your own merchant processing account, whichever one that is. Because technically if those funds go to the them. They are their funds. They don't need to release them to you. You hope that they would, but I want you to get,

I would decide now.

Yeah.

And get all that in writing with the seller. And maybe that's something that you and your attorney could work out. I don't know that that's something that your realtor would assist you with. 'Cause again, it's, it's not really a part of property itself. It is. It is an extenuating way that they use the property. Uh, it is kind of like relating it to a long-term rental, like I've inherited tenants. But the difference with that is, is state law, at least for us, is when you sell a property, the lease follows the tenant. And so you have to, as the person buying the property, you have to honor the lease that's in place. It's not the same with short-term rentals. So Renee, there, there are a couple options, right? You could have the seller keep their Airbnb, their VRBO profiles live, their direct booking live, but blocks all the dates moving, you know, now that you're in contract. And that's the thing too, is like when you start blocking dates, 'cause nothing's sold until it's sold, right? But maybe they, you guys, everyone's feeling confident, they block dates except for the ones that they've already booked. You coordinate the cleanings and the guest experience behind the scenes and the guest stand, or the original reservation, which is less friction for the guest. But remember, that review is gonna go to the seller's profile, the seller's website. So those are things that you wanna keep in, in mind, or you could ask the can guest to cancel and rebook with you. And this would require a phone call to that guest. And I'd even recommend that you reach out to the OTAs first. So VRBO, Airbnb, and let them know, Hey, we're purchasing the property. There's all, and they're probably gonna want the seller to call anyway. 'Cause again, the, the reservations belong to the seller, but get the OTAs involved so that when you're calling the guests and asking them to go from one listing to another listing, you have the OTAs blessing that you can do this 'cause remember, technically according to Airbnb's terms and conditions and VERBOs, we cannot ask the guests to cancel. So you wanna get them involved to help coordinate all of that. Um, but then you could do that or there have been times when Airbnb and VRBO help facilitate that transition. They'll move the reservation. Now, it depends which support agent you get, but they can help move the reservation from the seller's listing to your listing, and you probably wanna offer a small discount for them rebooking with you for the back and forth for the friction when it comes to asking the, the guests to jump through these hoops and do all these things. Well, it's not, it isn't, you know, it's not much on their end. It's still mentally taxing for them to know that, hey, their stay is kind of in jeopardy. They don't feel like they're on solid ground here.

So the biggest piece of advice we could offer is, number one, understanding all of the current reservations and how they have been moving forward. Like, is the calendar pulled down? Like is everything blocked out and really understanding. Exactly when the reservations are taking place, what that revenue is from said reservation. And the last thing I do that's, I'm gonna let you know, can get complicated is the taxes there.

Mm-hmm.

You know, how are, how have the taxes been worked out behind the scenes on those reservations? Um. Because if Airbnb reports the income, they're probably, if you don't change the reservations, they're gonna report that those reservations back to the other host and then they're gonna be responsible for the taxes. And again, you know, are we talking about $5,000? Are we talking about $50,000? Right? So it really is understanding the total amount and the implication, and all of them are important no matter what the, um. What the total is, but really understanding what you're working with. You know, is this two reservations, is this 20 reservations? Are they daily getting more reservations and making this compounding what you need to deal with. So just have to be really thoughtful and make sure everything is in writing.

Yeah, and signed by both parties. There was one transaction that I never saw through Renee that actually fell out, but what I represented, I was representing the buyer. The seller had a great listing, great reviews, all that stuff. But you know, this wasn't her last short term rental. Like she wanted to do this in the future, so she didn't, you can't transfer your listing over anyway, or you know, your account, your Airbnb account anyway. But long story short, what they agreed to do was they did not have bookings way into the future. So that made it easier. So had there been bookings 4 or 5, 6, 7, 8 months out, that's a different conversation. But what they agreed to do is that she would see the reservations through, I think it was gonna be like two or three months in the future, and earn 20% commission by being like the co-host, see them through, and then once they were, and so earn 20%, uh, of that and then, yeah, they would've had to help their bookkeeper and their CPA help them untangle those reservations and make sure that was really clean. Who was responsible for that revenue, for that income? Because that's the thing too, people will tout that these properties are these quote unquote active short-term rentals and like we're fully booked, we're all these things. And it's like, well, sure, but I don't get those benefits 'cause I'm not buying the brand or I'm not buying this this. Do you have an email list? Because that's different. Do you have a social media list that's different? Do you have a website that I get to buy and inherit and, and use as my own. That's different. But if it's a simple home that's, that has happened to be listed on Airbnb, all those accolades don't come to you. You're gonna have to work hard just like anyone else to restart that business up. Does that answer your question, Renee? She's like, it's complicated. Well, and if we had Renee here on the podcast, but there we could definitely work out some scenarios, but since we have a little, little information maybe. Again, maybe she's buying the business. I'm not, we're not sure. But it just sounds like it's a property that happens to be active.

Yeah.

And listed on short-term rental websites.

Yep. But again, everything in writing and really understand, see behind the scenes, have them show you the calendar, have you show, have them show you the reservations. Um, you wanna make sure that you're in the know once it becomes your property.

Yes. And if, Renee, if you have any follow up questions, you. Feel free to email us. hi@thanksforvisiting.com. Let us know how it goes. And with that, I am Sarah Karakaian.

I'm Annette Grant, and together we are. Thanks for Visiting.