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[00:00:00] Sarah: Hello, welcome back for another great episode. My name is Sarah Karakaian.
[00:00:04] Annette: I’m Annette Grant. And together we’re–
[00:00:05] Both Annette & Sarah: Thanks for Visiting.
[00:00:06] Sarah: And this is the–
[00:00:07] Both Annette & Sarah: Hosting Hotline.
[00:00:08] Sarah: If you want to get your hosting question answered here on the hotline, all you have to do is go to hostinghotline.com, record your question, and help thousands of other hosts with your same challenge.
[00:00:19] Annette: This week we have a question from Whitney who has a question about parent-child listings, but with a twist.
[00:00:25] Questions: Hi, ladies. I’m asking if I can create a parent listing for two homes that are next door to each other. I own one of them and my neighbors own the other. I’m also the co-host for their house. I would like to create a parent listing to accept large groups that can stay in both homes, but I’m also aware that there may be tax consequences and maybe something else I’m missing by accepting a booking for both homes at once.
[00:01:01] I’m wondering if there’s a way to create a parent listing and accept inquiries and then when they do come in to book both, direct them to each individual listing. I’m not sure if that’s the best way to go about it or if I’m out of luck, so any insight would be really helpful. Thank you.
[00:01:21] Sarah: Whitney, great question. And with all transparency, Annette and I have never done a parent-child with two different properties owned by different people. But we’re going to chat out loud about some concerns and some ideas, and hopefully get you on the right track.
[00:01:41] Annette: And you are never out of luck. And hosts out there, you are never out of luck also. That’s the positive spin on it. Sarah said it when we were chatting. When there’s a will, there’s a way. Let’s make the parent-child happen. I think first, Whitney, great idea.
[00:01:57] Sarah: Let’s explain what parent-child is first, Annette.
[00:01:59] Annette: Yeah, we do–
[00:01:59] Sarah: Just in case.
[00:02:00] Annette: Yeah.
[00:02:00] Sarah: Do you want to go? I’ll do it. Okay, listeners.
[00:02:03] Annette: Then direct them to our YouTube video about this.
[00:02:04] Sarah: Yes. So we actually have two resources. Listeners, if you are not sure what a parent child listing is, podcast Episode 232. We also have a YouTube video that explains it visually for you, and we’ll link those resources in the show notes. But essentially, it’s where you can combine– the idea came from if you have a large home and you wanted to sell the home as a four-bedroom home and as a two-bedroom home separately, and you would lock off the two bedrooms if someone purchased the home as a two-bedroom home and unlock it for them if they’re purchasing all four bedrooms.
[00:02:40] The confusion immediately seeps into people, like, wait a minute. So are you selling the other two bedrooms to someone else? No, no, no. The rooms aren’t available. So that way the cleaning costs come down.
[00:02:50] If there’s two people or three people searching for a two-bedroom apartment, your property that has a four-bedroom now shows up, and you can do some really cool stuff with your calendar too, where you can make them both available by different price points to gear people towards booking the entire property, but have that two-bedroom or that smaller– it doesn’t have to be two and four-bedrooms, but have that smaller option be an option.
[00:03:12] Or let’s say you have a multi-family. You’ve got a fourplex, and you want to make two of the units one. And then that could be a parent-child listing. So you have each individual unit its own listing. And then like Whitney’s saying here, you’d have a listing that actually includes both those units, but Whitney’s thinking even bigger.
[00:03:30] Annette: Right. And I want to give just a little bit narrative to exactly why this is advantageous for you. We do it, and then a lot of our members in our membership do it. They’re seeing great success. And here’s why you would want to do it. Number one, maybe a Monday through Thursday, it’s more likely that smaller groups or individuals are traveling.
[00:03:49] They’re still really interested in your space, but they don’t need all of your space. That’s one of the ways that it can be used, Monday through Thursday, just giving you more options. We know a lot of our members are having success in their off season. Also, if they have a beach or mountain home, bringing the bedroom countdown so those work from home people passing through, that nightly rate is much more desirable, and they’re searching for maybe a one or two-bedroom opposed to a four plus.
[00:04:18] So it’s definitely worth a shot. Some of our members are having crazy success with it in tunes of thousands and thousands of dollars that they would not have brought in. So please definitely, check out our video. If you haven’t subscribed to our YouTube channel, hit Subscribe button. But let’s help Whitney with this particular parent-child, two different roofs, because normally it’s under one roof.
[00:04:43] Sarah: And the two different roofs doesn’t trip me up because, actually, Whitney, I have previous clients who built little cabins. They sell their cabins like that where they’re each individual listings or you can book two cabins or all three cabins. It’s the different ownership that, you’re right, you need to ask additional questions around. Annette has some ideas for you.
[00:05:06] Annette: The first idea, which is quite frankly going to be the most work in the beginning, but I think would be less work in the end, is, Whitney, creating an actual listing and an account for the two properties. So a brand new Airbnb account, and then a brand new bank account. That way all of the money is going into one of your business accounts.
[00:05:29] This is where Relay, who we use would be great for this. It would be easy. You can sign up online both of the parties, but you would have to form an LLC for that. But again, I have no idea how popular you think this is going to be, what the demand could be in your area. You could absolutely slay this, and it would be worth it. So that is one thing of actually just making sure all those reservations are going under a brand new account. It keeps it very clean for taxation purposes for LLC, and you might just have to say, hey, have some documents drawn up.
[00:06:01] We’re going to split these reservations 50-50. Even maybe your neighbor’s house is a little smaller, a little bigger than yours. You definitely need to, whether you do it any of the ways that we talk about, have some written agreement where you both have signed the way that the money is going to be distributed into your personal accounts, and then tax wise.
[00:06:21] Sarah: We don’t know where you’re hosting, Whitney, so I would also ask your city, your municipality, and make sure there’s nothing there that you need to be aware of. If you’re licensed, there’s no restrictions on your license that wouldn’t allow you to do this. And just make sure there– because Annette and I, we’re not sure what that would look like for you.
[00:06:40] And then when it comes to taxation, that’s where Annette is saying if you were to have, whether it’s an Airbnb account or, Whitney, if you use a PMS and then aggregate to different OTAs, that could be an option. You could, like you said, Whitney, have an account or have a listing that is for both, and then have the guest book separately. My only question there is then, how do we get a reputation built?
[00:07:03] Annette: Right. Any reviews. If you do that split where they have to book on the separate homes, you’re never really going to have any reviews on that. So we don’t know how much traction you’ll get, and we don’t know if you have a direct booking site. And your social media and direct booking site, you could be marketing both of the properties there to get traction.
[00:07:25] Sarah: Going back, though, to– Annette actually alluded this for just a moment, Whitney. I do want to make sure that all of this is worth it, because I would say too– and you can find that out, Whitney, by using any of the data resources we have out there that are available to us, whether it’s Price Labs and their marketplace data, STR Insights, Key Data, AirDNA, is what you’re wanting to do something that people want and need.
[00:07:51] Annette: Yeah. “Worth it.” And obviously you need to quantify what worth it is, but we’ve had success with some properties, and there have been other properties that were not successful.
[00:08:02] Sarah: Right.
[00:08:02] Annette: So we do have to be clear. We were talking about an unsuccessful parent-child listing right before this because it was a fourplex, and there wasn’t any common space really that was large enough for everyone. So I also want to make sure you’re being very clear with everyone.
[00:08:18] Let’s say all of a sudden you go from sleeping eight to 16. Being clear. I don’t know if all of a sudden you’re going to put a 16-person table or enough couches, so you’re going to want to make sure that they understand that common space might not accommodate everyone, but I definitely think, see what the demand is out there, what is your competition?
[00:08:39] And also, you could try it for three months. I say give it three months, see how it goes. If it starts going well, then you could do my idea of opening up the bank account, separate account, but it’s worth a shot to put it out there. See if anybody even bites on it, but do some research ahead of time.
[00:08:53] Sarah: One last idea. You could, like you said, Whitney, have the a listing, maybe not a whole account, that is both properties have that money being directed to– if you do trust accounting, Whitney. I don’t know what kind of co-hosting you do. If all the money’s already going to you anyway, and then having that agreement with your client and the homeowner of the second home.
[00:09:17] Again, it’s like, how is that going to be distributed, both the expenses and the proceeds from those reservations. And like you said, are there any tax implications? So I would also not only consult with your attorney, I would have both you and your owner just call your insurance company, explain what you want to do, see if they have any reservations, but it’s worth exploring. And Whitney, if you do explore and decide what to do, would you keep us posted?
[00:09:40] Annette: Yeah. Follow up with us. And if you aren’t doing parent-child, Whitney, on the current properties, I encourage you to parent-child the independent properties. That might be another revenue stream for you. So good luck. We’re excited for you. Way to crush it on your own property and then helping your neighbor out, is wonderful.
[00:09:59] Sarah: And being creative. Especially in today’s climate, you do have to think differently and think bigger and root it all in data. With that, I’m Sarah Karakaian.
[00:10:07] Annette: I’m Annette Grant. And together we’re–
[00:10:11] Both Annette & Sarah: Thanks for Visiting.
[00:10:11] Sarah: Talk to you next time.
