Happy hump day, folks! How do you like our new fall look? In today’s required reading recommendation, I insist you take 10 minutes to read this Curbed article, “Upstate Buyers Are Too Rich For Airbnb.”
Here’s a teaser “Before, it was like regular people Airbnb-ing to make their second home work,” Leslie Foti, an agent at Coldwell Banker Village Green Realty, was quoted as saying. “Now everyone that’s buying a house here is rich. They’re like, ewww.”
Alright, let’s get into it.
On the itinerary today:
- Colorado’s new tax proposal for short-term rentals
- Homebuyers bearish on pandemic boomtowns
- RedAwning to provide homes for Hyatt’s Homes & Hideaways
Rules For Rentals
Colorado Wants to Tax Rentals Like Hotels
If passed, starting January 1, 2026, short-term rental units will be classified as either a residential real property or a lodging property based on its use the previous year. How a unit is classified would have a big impact on taxes owners ultimately pay.
Here’s how it would work:
- Residential real property: If during the previous property tax year, the total number of days that a short-term rental unit was leased for short-term stays was less than or equal to 90 days, then the short-term rental unit is classified as residential real property.
- Lodging property: If, during the previous property tax year, the total number of days that a short-term rental unit was leased for short-term stays was greater than 90 days, then the short-term rental unit is classified as lodging property.
- The distinction matters: The Summit Alliance of Vacation Rental Managers, which represents property owners, said that the current property tax assessment rate for residential is 6.765% after a $15,000 deduction The current lodging tax assessment proposal rate is 27.9% after a $30,000 deduction — a substantial increase.
Cedar Smells of New Money
Austin startup Cedar, which provides a platform for the residential construction industry, has raised $3 million in venture funding. Cedar’s platform uses AI-based algorithms and a blend of public and proprietary data to produce building designs. It forecasts a property’s financial prospects. The funding round was led by Caffeinated Capital with participation from Tishman Speyer Ventures.
Jurny Integrates With Vrbo
AI-powered property management solution Jurny has integrated with Vrbo, offering guest communication and reservation management. The Los Angeles-based startup also streamlines with various booking and communication channels including Airbnb, and Booking.com.
From Boomtowns to Beartowns?
Vacation home sales in the United States have plummeted by nearly 75% compared to their peak three years ago due to a severe shortage of available properties. That has caused a significant correction in the second-home market, Reuters reported.
- Data from mortgage services firms reveals that in areas like Hilton Head Island, South Carolina, and Lake Havasu City, Arizona, sales have dwindled, despite sustained high demand.
- According to data from the National Association of Realtors (NAR), the share of secondary homes in the housing market dropped to 16% as of August, down from a peak of 22% in January 2022, although it remains slightly above the 14% average from late 2015 through the first half of 2020.
- The second-home market is primarily driven by wealthier buyers less sensitive to rising interest rates and persistent high home prices, but the limited inventory continues to be a hindrance.
RedAwning Partners With Hyatt’s Homes and Hideaways
RedAwning will be the accommodation provider to Hyatt’s new short-term rental platform Homes & Hideaways.
Tim Choate, CEO of RedAwning noted that this strategy benefits property owners, managers, and guests alike. RedAwning’s portfolio of properties and its distribution channels is aimed at onboarding for both the Hyatt team and the hosts and property managers joining Homes & Hideaways.
Srividya Kalyanaraman writes the Short-term Rental Report. Reach out to her with tips, comments and feedback at email@example.com