You filed all of the paperwork, paid the fee, met with the inspector and now you’re ready to take care of business and get legit. About a week after the inspection, you’ll receive a printed permit in the mail. This must be posted onsite at all times, so find a frame and a visible yet inconspicuous place to hang it.
Surprise, you’re now a business
One of the finer details of Portland’s Accessory Short-Term Rental (ASTR) law requires each property owner to become a business owner, too. To do this, determine the type of corporation that you will be starting.
Limited Liability Corporations (LLC) are fairly easy to establish and work well for married, joint property owners but consult with your lawyer or accountant to make sure you are establishing the most advantageous type of organization for your particular needs. Once you have decided your approach, draw up a basic operating agreement that works for the state of Oregon (sample text can be found online). Make sure that the provisions of the document are appropriate for your specific needs and feel free to engage outside legal counsel to ensure all bases are covered.
Register your business
After you have drafted your Operating Agreement, there are several governmental entities you must register the organization with in order to get compliant:
- Start with the IRS – this gives you the new tax ID number for rental earnings and is free
- Register with Oregon’s Secretary of State – $100 registration fee
- Register your ASTR with the City of Portland – free to register
- If you have been operating before July 2014 or are using other property rental tools, you will need to file a Transient Lodging Registration form – free to scan and email or fax
Open a separate bank account
Once you have a copy of your signed, printed Operating Agreement and your Employer ID number issued by the IRS, it’s time to open your bank account, another requirement of Portland’s ASTR law. The easiest way to do this is to work with your existing bank or credit union which will probably require you to seed the account with an opening investment. Remember to pay yourself back for all of these startup costs out of your future Airbnb revenue.
Link your Airbnb account to your new business bank account for direct deposits, and use the funds in this account to pay utilities and supplies. Monthly draws can be taken from this business account to your personal account in order to pay for more major expenses like mortgage and taxes.
Keep a guest log book
Begin using a logbook to track guests as required by ASTR law. This logbook should be available for inspection by BDS without notice so it must be kept up-to-date and should include:
- Dates of stay
- Room assigned
- Guest’s names
- Home addresses
- License plate numbers if traveling by car
After all of this is complete and you are fully compliant with the law, step back, breathe a sigh of relief and focus on your guest’s experience because after all the paperwork is over, that’s what really matters anyway.
Share your experiences or questions in the comments section below.