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Short term rentals by a company

Which are the benefits of getting into AirBnb and other short term rental platforms?

Short term rentals by a company

Which are the benefits of getting into AirBnb and other short term rental platforms?

Pros – Cons

The right question that a successful host should ask is

What are my options when my income increases?

As income increases so do expenses. The demand for additional/new services rise, taxation passes to a higher rate and the manager sees the decrease of his/her actual profits. Management of the rental becomes a daily and demanding task.

This is when insurance matters come into play, as well as paid services from third parties, VAT issues and insurance against all liability.

The conclusion is that it becomes obligatory to form a company that can manage not only the income and expenses but also the taxes and the payment of the manager/s. You need to have a long term plan in order to understand the actual profit from short term rentals and online platforms like Airbnb, Homeaway, Booking etc.

Here you can find such a calculation example, but please take into consideration that calculations are simplified for a rough and quick approach.

You can see here a more detailed calculation example ..

Procedure – Legislation

The procedure regarding the platforms of the Short Term Rental Registry and online reservation platforms such as AirBnb and Homeaway remains the same.

You can see here the 5 basic steps in order to get into the short term rental business.

First however, you should make a financial plan with the help of an experienced advisor – accountant who shall consider all the financial data in order to lead you to the right decisions.

To find out more on the advantages and on how to start a company you can visit the complete IKE guide by KRS

  • Planning

    It is very important from the beginning to make an accurate estimation of the income and expenses so as to proceed to all the right actions and achieve the lowest possible taxation but also maximize the income of the property.

  • Forming a company

    Forming a company today is a matter of just a few minutes or days. Of course there are some necessary steps to take, such as selecting a registered office, opening a bank account or hiring personnel.

  • Initial expenses and tasks

    After the formation and while the company is running, all initial renovation, equipment and supplies expenses will pass through the company. Then the procedure of short term rental will follow and you can see it here (link)

Procedure – Legislation

The procedure regarding the platforms of the Short Term Rental Registry and online reservation platforms such as AirBnb and Homeaway remains the same.

You can see here the 5 basic steps in order to get into the short term rental business.

First however, you should make a financial plan with the help of an experienced advisor – accountant who shall consider all the financial data in order to lead you to the right decisions.

To find out more on the advantages and on how to start a company you can visit the complete IKE guide by KRS

  • Planning

    It is very important from the beginning to make an accurate estimation of the income and expenses so as to proceed to all the right actions and achieve the lowest possible taxation but also maximize the income of the property.

  • Forming a company

    Forming a company today is a matter of just a few minutes or days. Of course there are some necessary steps to take, such as selecting a registered office, opening a bank account or hiring personnel.

  • Initial expenses and tasks

    After the formation and while the company is running, all initial renovation, equipment and supplies expenses will pass through the company. Then the procedure of short term rental will follow and you can see it here (link)

Obligations

At this point we have to mention that you have to take into consideration the obligation of book keeping by an experienced and specialized accountant, the payments of EFKA (Single Social Security Entity), VAT and FMY (payroll tax), the payment of the manager, the tax advance payment of 50% as well as other details before you start your business activity with short term rentals and online platforms like Airbnb, Booking HomeAway.

All the other obligations concerning the short term rental of residential property  remain the same.

Taxation

Provided there is a sole proprietorship or in case the owner chooses to provide additional services other that bed linen (for e.g. cleaning, food etc) the income will be taxed as follows:

0 – 20.000€ 22%
20.001€ – 30.000€ 29%
30.001€ – 40.000€ 37%
40.001€ – 45%
  • When the short term rental activity is made through a company, income is calculated after deducting all expenses and the taxation rate is 29%regardless the amount.

 

Σχεδιασμός και Οργάνωση

Είναι σημαντικό από την αρχή να υπάρχει η κατάλληλη καθοδήγηση και να επιλεγεί ο κατάλληλος τύπος εταιρείας που θα καλύψει καλύτερα τις ανάγκες του επιχειρηματικού πλάνου. Στην συνέχεια θα πρέπει δρομολογηθούν οι απαραίτητες ενέργειες με πρώτη την διεκπεραίωση των διαδικασιών έναρξης.

Other Services

A company can offer additional services to that of bed linen. Besides cleaning, meals or sale of goods, the business activity can be expanded to the transport of visitors, the provision of specialized services, but also touristic activities such as organized excursions.

Tax Planning

With the proper taxation support, the right planning but also the right consulting services, a company can feel secure and protected against any changes or challenges it may face in the future.

Example on the Calculation of Income – Expenses from real estate property under the management of a company

We assume that the initial renovation expenses are 3,000.00€ and the equipment expenses are 2,000.00€

We consider an operation period that will cover the entire year and an average capacity of 20 days per month (67%).

With an average renting price of 70.00€ per day and monthly expenses of 250.00€ we should also calculate the following:

  • Accounting expenses
  • EFKA of the manager
  • Salary of the IKE administrator that will reduce our taxed profits
  • The utility bills that will be added to the expenses further reducing taxation.

Although the total annual income seems less, the actual profit after taking into account the results in a 3 year horizon is formed as follows:

Results of the 1st year: 5.839,34€
Results of the 2nd year: 9.389,34€
Results of the 3rd year: 9.389,34€
Total of 3years 24.618,01€


See here the same example for the case of managing the rental as a natural person.

Instructions, Tips, Articles

Read news, tips and instructions for short-term rental 

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