So, You Want to Be an Innkeeper… Or at Least Rent Your Home to Vacationers

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By Susan Fogel

Renting your Mexican home or any home to vacationers is easy money, if you do it right and make your home inviting, keep it sparkling clean, and offer lovely, homey touches. Your little palace in paradise can be rented year-round.

But there are rules in Mexico about renting your home. The biggest rule is that you, the owner must be registered with SAT; you must report your income and PAY TAXES on that income.

Last year, immigration officers conducted a raid on some vacation homes in Todos Santos. The owners were not registered with Immigration or SAT (Mexican IRS), yet they boldly advertised their properties on popular vacation rental sites like VRBO and HomeAway. Immigration officials are “net-savvy”, and they only had to compare rental listings online with SAT records. In several situations, the guests were turned out of their lodgings. This was extreme, but it certainly got the attention of the scofflaws.

I had a vacation rental for many years. I was registered with SAT, paid taxes, and still made a tidy profit. And I paid taxes on that income in the Old Country, as well.

So here are things that you must do to have a legal rental in Baja Sur

  1. Get an RFC and CURP. These are tax I.D. numbers.
  2. Register your activities with SAT.
  3. Register your activities with Immigration.
  4. Get an accountant to file your monthly and annual taxes

So we have the unpleasant, but necessary, government details out of the way. Think back to your most pleasant stay in a B & B or vacation home. What made it special? Those things are the details you want to include in your rental property. Now consider one of the disappointing places that you have stayed. What was wrong with them?

In our travels, My Beloved and I have experienced the best and worse that innkeepers offered. We stayed in a pricey place in Sayulita (near Puerto Vallarta) that offered one each of a bath towel, wash cloth, and beach towel for the WEEK! And we stayed in places where the big, fluffy towels were refreshed daily, as were the crisp white sheets.

We have been charged for drinking water, and in other places were delighted to find a tray of freshly brewed coffee and still-warm pastries on the table in front of our door. The good and the bad places charged about the same rate.

When it comes to renting a home, guests are expected to make their own meals, and most of them rent homes with the idea of cooking “at home” once or twice during their stay. Most of them want to make coffee in the morning and enjoy a glass of wine in the evening. And they know that food is at their own expense. However guests do expect to find plenty of toilet paper, paper towels, dish soap, bath soap, coffee filters, and at least enough bottled water to hold them for a day or two. And this should be provided at NO EXTRA CHARGE. This is a cost of doing business and goes a long way towards referrals from your guests.

I had an owner that wanted me to help her rent her home, but she did not want the guests to use her master bedroom or hairdryer. These kinds of restrictions are ridiculous. She had to change her tune or I would not provide rental services to her. She did. And she enjoyed the income.

So, putting restrictions on the use of your home or adding extra costs for using the air conditioning or the spa or the internet do not make for a pleasant stay. This shouts “cheap”. In the words of a fellow traveler, “…takes some of the shine off the experience…”.

Consider this–you have no mortgage, your carrying costs are very low, your rent is almost pure profit. Why then would you nickel-and-dime your guests? And remember, the water, electricity, management fees, and toiletries that you provide are tax deductible.

What you should do is have a welcome letter. You can ask your guests to be conservative in their water use and to please not leave the AC on while they are out. I have appreciated a note like this in places that I have visited. I saw it as a gentle reminder that we are stewards of the earth. I also did the same for my guests. And by gently reminding them that we were on trucked water and that electricity was very expensive, they were careful not to leave the house before turning off the AC.

Things that drove me crazy in vacation homes:

  1. Not enough towels
  2. Poorly equipped kitchens
  3. Ropey or flat pillows
  4. No reading lights or bedside tables
  5. No beach chairs or beach bags
  6. Difficulty in paying for the stay

Things that I love:

  1. Plenty of towels
  2. Kitchens with enough pans and utensils to make a simple meal
  3. Extra pillows
  4. PayPal as the payment option

What we provided:

  1. SIX poufy bed pillows
  2. Complete kitchen with three different kinds of coffee makers
  3. Plenty of towels, and special, dark washcloths for removing makeup
  4. Beach chairs and toys
  5. Soap, toiletries, paper goods and tissues, and breakfast fixings for one day
  6. PayPal as the payment option

We lived on the property. Our favorite guests were those that got up early and went diving or fishing or otherwise disappeared. They returned at five, showered and went out for dinner, and repeated this for the entire stay. Maybe once or twice we would share coffee in the morning or a drink in the evening.

Then there were the guests that came for a long stay, stripped off their clothes and never put them on again until they went home. And they never left our property!

Renting your property to vacationers, as I said, is easy money. And if you live on the premises or nearby, you will make friends with many of them. Some of our guests told us before they arrived they would like to cook for us! Others brought us gifts from their part of the world. And two different guests adopted dogs and took them home to Canada and the USA.

I always asked my guests to write a review on the VRBO or HomeAway site where they found us. Good reviews are money in the bank and mean repeat bookings. And many of my first time guests said it was the reviews that made them decide to stay with us.

Make it easy for your guests to pay for their stay. Use PayPal. Yes, there is a cost, but it is minimal, and you are protected by PayPal, and all of your records for taxes are on your account page.

Have fun, make it fun for your guests, enjoy the money!

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