VACATION RENT YOUR CASA
When building or buying a home in Baja, one often fails to realize that unless it is a permanent move, there is a great amount of time that you will fail to occupy your new home.
This can be used to your advantage as you can turn your investment into a vacation rental. Obviously, you will need either somebody living on premises or a property manager. One of the key secrets is having a quality property manager. This person, or persons, can live on the property or separately. Their full-time presence on the premises is an extreme plus. With a successful vacation rental comes TV's, sound systems, quality appliances, that are all possible targets for thieves. Just like anywhere else there are break-ins.The opportunity for a couple to have a free place to live (your casita), utilities paid and an income, is a real positive to a number of expats. If you have a couple, or even one person living on your property, there is little likelihood of theft. If you construct a separate casita on the property, your guests will love it and not lose any privacy. They now have a personal concierge. This person can maintain your plants, pay your bills, purchase supplies, and keep you abreast about the goings-on in the area.
Vacation renting your home is a great source of income. If properly operated, all costs of maintenance, caretakers, taxes, etc., will be covered.
There are places to advertise for managers. For example, in the Todos Santos area there is the Western Onion. Try to do a suitable background check on your potential manager. The property manager can maintain the plants, pool, etc.. Obviously, their number one priority is the guests. Meeting and greeting and showing guests through the casa; directing them about the neighboring town, recommending restaurants/sights, arranging additional cleaning during guests' stay, are all part of their responsibility.
There are many online vacation rental sites. The three we use are, VRBO, Home Away, and Trip Advisor. Of course, having your own web site for a link is a real positive. Costs incurred to be featured on these sites is not cheap; however, with a couple of rentals you have recouped your investment.
The Mexican government is now charging 16% room tax. That takes the place of an income tax. You are allowed to deduct expenses (water, electricity, gas, etc.). You need to provide the government with a factura-a form of receipt. Many small repair people, property managers, etc., will require you pay them an additional 16%, as they have to declare that income to the government. In our area of Baja, there is an additional 3% local tax.
You don't have to declare your rental income to the IRS unless it exceeds $70,000 annually, as long as you are paying Mexican taxes.
Again, I am not an authority on US or Mexican taxes and they can change at any time. It is important you secure a skilled Mexican accountant to guide you and pay your taxes.
One needs a good contract that sets the ground-rules for your renters. A source for this is VRBO. In a rental agreement, you need to establish dates for arrivals and departures, deposit rules, cancellation policy, cleaning fees, taxes, security deposits, along with guests' responsibilities. Listed also should be amenities offered, furnishings and appliances included in the rental and all descriptions of your home needs to be outlined.
This is one of the subjects discussed in our monthly newsletter that is part of many offerings in Secrets Of Baja. There is an entire section devoted to contracts, information your guests need about traveling to Baja, etc. etc..
Now, all you need is a house to vacation-rent.