From taxes to platform changes and a volatile economy, Long Island’s Airbnb landlords face a barrage of challenges that could break many financially.
What’s happening now? How might these factors compound to erase profits? What can you do to stay ahead?
Airbnb Announces More Changes
Some Airbnb landlords have already been complaining that their bookings and income has dropped significantly.
It’s not clear whether this is due to the overall economy or the 23% increase in new competing listings that the platform has put up in the past two years.
Still, coverage by the Long Island Business Network reveals the company’s founder has plans to try and attract millions more listings, while trying to bring prices for guests down. Including pressuring hosts into getting rid of cleaning fees.
Unless there is a big uptick in travel, then hosts may see their income drop off even further in the near future.
Interest Rates
The Dallas Fed now forecasts that recent interest rate hikes will reduce home values by 20%. So not only are Airbnb investors seeing less income, which also impacts values, but they may soon find themselves owing more on their properties than they are worth.
New data released by banks in the third quarter of the year, and published by DistressedPro shows the highest level of business, auto loan, and credit card debt in default in at least two years.
Suggesting that many have used credit to cover the impact of inflation, but are running out of credit, and cannot catch up.
Rising Property Taxes
Along with other new taxes, and rising taxes, many Long Islanders are finding their property tax bills are higher this year.
Bloomberg reports that San Francisco is bracing for a loss of $200M in property tax revenues due to layoffs, office vacancies surging to over 30%, a lack of income from commercial properties.
Similar trends are certainly happening in NY. It seems most likely that taxing authorities will simply pass those losses on to residential property owners, and make up the money from them. Rather than being creative, or seizing the opportunity to finally due away with this tax.
Now is the time to challenge your property taxes. Many Airbnb landlords could potentially free up hundreds, thousands, and much more each year by doing this. Which can make all the difference between staying afloat and not.