This Week’s News & Insights

Good morning,

Here's what's going on in the vacation rental world this week:

Airbnb quietly updated its payment terms, exposing hosts to increased risk and delayed payouts, Michael Jordan’s former Chicago mansion is now available for nightly bookings, and Airbnb is phasing out its Strict cancellation policy in favor of a more flexible model.

This week in STR regulations: Las Vegas STR owners have filed a federal lawsuit challenging the County's restrictive regulations, Los Angeles is ramping up enforcement after a fatality at an unregistered Airbnb, and a city on the Jersey Shore is eyeing a 3% local tax on all vacation rental bookings.

Lets dive in. 

NEWS

Headline Roundup

• 4 Ways Airbnb’s New Payment Terms Put Hosts at Risk (The Host Report)

• What the Big Beautiful Bill Means for Short-Term Rental Owners (The Host Report)

• Michael Jordan's Former Chicago Mansion Listed on Airbnb (NBC Chicago)

• Airbnb Eliminates Strict Cancellation Policy for Hosts (The Host Report)

• Casago Partners with Guesty for the Casago Franchise Network (Yahoo Finance)

• Streamline Announces Partnership with Casago (PR Newswire)

• New Owner of Reservations.com Is Incorporating New Business for Consumers (Travel Weekly)

• Oyo’s European Vacation Rental Brand “DanCenter” Expands STR Footprint in India (Skift)

• RateGain & Cloudbeds Team Up to Help Hosts Optimize 400+ Channels (RateGain)

INTERESTING INSIGHTS

The One Big Beautiful Bill (OBBB) was officially signed into law on July 4th. And for STR owners, one of the most important changes is the reinstatement of 100% bonus depreciation

Lets taking a quick step back to understand what makes the STR tax strategy so powerful:

The Short-Term Rental Tax Strategy

There’s a unique set of rules under Section 469 of the tax code that creates a major planning opportunity for STR owners. If:

• The average stay per guest is 7 days or less, and

• The owner materially participates in the rental activity (i.e., self-manages the property by spending 100+ hours and more than anyone else, or puts in 500+ hours of valid participation time)

In simple terms, if this criteria is met, any paper losses, like those created through depreciating the property, can be used to directly offset W-2 wages or business income. 

This has made STRs a strong strategy for high income earners looking to reduce their tax burden while investing in real estate.

What This Means in Practice

To illustrate how significant this change is, let’s walk through a simple example of 100% bonus depreciation vs only 40% bonus depreciation

Here’s how the numbers stack up:

As you can see, the reinstatement of 100% bonus depreciation more than doubles the available first year deduction and resulting tax savings in this scenario. For many investors, this opens the door to supercharging year one deductions and unlocking immediate cash flow and reinvestment potential.

But Watch Out for the Fine Print

One important detail in the bill is that 100% bonus depreciation only applies to property that was purchased and placed in service after January 19, 2025.

Read the full article Here, written by Gabriel Virdaru, CPA. Gabriel is the CEO of Fortuna CPA PLLC, a real estate focused tax advisory firm that works with high income earners to develop customized strategies aimed at reducing tax liability and accelerating wealth building.

MARKET INSIGHTS

Mortgage Rate Snapshot

Mortgage rates began rising last Wednesday after a two-week decline, driven by a stronger-than-expected jobs report that pushed bond yields higher. Rates have now increased for three straight business days but still sit below levels seen for most of May and June.

Regulations Update

• Las Vegas short-term rental owners have filed a federal lawsuit challenging Clark County's restrictive regulations, including a lottery system limiting licenses to just 1% of housing units and allowing warrantless property searches

• Los Angeles County is intensifying enforcement of its short-term rental ordinance following a recent fatality at an unregistered rental

• Manistee, Michigan has approved an ordinance capping non-exempt short-term rentals at 165 units citywide while requiring registration, inspections, and fees that could constrain new investments

• Ocean City, New Jersey is considering a 3% local tax on short-term rentals booked through platforms like Airbnb and Vrbo

• Annapolis, Maryland is proposing legislation to cap new short-term rental licenses on blocks where they exceed 10% of homes, potentially locking out future investors in historic areas while grandfathering existing operators

• Steamboat Springs, Colorado will review its strict short-term rental enforcement policy following community criticism over immediate court summonses and heavy fines without warnings

• Jamaica is considering legislation requiring Airbnb operators to register with the Jamaica Tourist Board, with hefty fines and possible imprisonment for non-compliance threatening international investors

See this weeks full regulations report here: (The Host Report)