Last year, Brown County homeowners were able to bring in $432,000 by renting space in their homes to tourists through Airbnb.
Airbnb is a website that allows people to rent out rooms in their houses or their entire homes to guests. Hosts can be found all over the world.
Brown County ranked No. 11 out of Indiana’s 92 counties for income from Airbnb in 2018, according to a report released last month. Income figures don’t just include rooms in private homes, but also some bed-and-breakfast and hotel rooms that also are marketed through the site.
Airbnb hosts across the state brought in more than $30 million of extra income while welcoming more than 300,000 guests to Indiana.
[sc:text-divider text-divider-title=”Story continues below gallery” ]Airbnb is just one of several sites marketing such rentals; VRBO and HomeAway are others.
The Airbnb option is encouraging some Brown County homeowners to get into a market once owned only by hotels, inns and bed-and-breakfasts.
Mari and Mike Miller opened an Airbnb in their Nashville home in October 2017, renting out rooms that their twin daughters used to occupy before they left for college.
The couple decided to go for it after staying in an Airbnb in Franklin, Tennessee. They stayed in the first floor of a detached garage.
“We just thought it was such a cool experience. The guy was talking about how much money he makes on it,” she said.
“We were just kind of looking at the space and thinking, ‘Wow. We could probably do that in our house.’”
The money the Millers earn goes toward paying student loan debt for their daughters as they try to find jobs in their fields of study.
“It was just a no-brainer. They (Airbnb) do all of the work and only take 3 percent. They deposit it into our account. It was just so easy,” Miller said.
The rental space is on one side of the couple’s home. Guests enter through their attached garage and then the laundry room.
“That’s the only downfall: We have to schedule doing our own laundry. Sometimes we have to block a night if we really need to get something done,” Miller said. “… In October, I swear we would have been booked every single night if I hadn’t blocked some time out.”
The only alteration the couple did to their home before opening was to install an exterior steel door between their kitchen and the rental space. The door is soundproof and allows them to carry on with their daily lives even with guests there.
It’s always been a dream of Miller’s to have a bed and breakfast, so having an Airbnb in her home is a “mini step” to that, she said.
How does it work?
As long as the owners of the home stay in the home when they invite guests into it, no additional approvals are needed in most areas of Brown County in order to become an Airbnb rental, according to Chris Ritzmann, {span}the county planning director.
That is considered a “home stay.”
A home stay is only allowed in a home where the owner lives and rents out no more than two guest rooms to a maximum of four guests.
For in-town Nashville properties, home stays are only allowed with a special exception in residential zoning districts, Ritzmann said. The Brown County Board of Zoning appeals grants those special exceptions.
Ritzmann’s planning and zoning office has 19 registered home stays on file. However, the actual number of home stays is probably larger than that because they don’t require an approval process in all areas, she said.
Home stays are different from tourist homes, which have to be individually approved by the board of zoning appeals. Up to 10 guests can stay in an entire tourist home without the owner being on site.
As of Dec. 31, there were 218 approved tourist homes and bed-and-breakfasts in the county, Ritzmann said.
Zoning inspector Chuck Braden spends “quite a lot of time” investigating Airnbnb listings to keep “property owners honest,” Ritzmann said.
Airbnb owners are supposed to pay the county’s 5-percent innkeepers tax and state sales tax, just like hotels, inns, bed-and-breakfasts and tourist homes.
“Airbnb is a marketing tool,” said Brown County Convention and Visitors Bureau Executive Director Jane Ellis. “Just because you say, ‘I have an Airbnb,’ it does not mean you don’t have to follow your local and state ordinances. That is one misconception.”
When the Millers decided to rent out their home, Airbnb told them that they would have to reach out to local and state government to make sure there were no additional steps that needed to be taken or taxes that had to be paid.
“The first thing I did was check with the plan commission upstairs,” said Miller, who also works as the county assessor. “Since we’re considered a home stay, we didn’t have to go through the process, the red tape of getting a tourist home designation because we live right there on the premises. We checked with town and they didn’t have anything.”
In 2018, the state legislature passed a bill which prohibits municipalities from passing outright bans on homeowners welcoming short-term paying guests.
Airbnb did require Miller to get business personal property insurance for furnishings and supplies. Airbnb also offers insurance to hosts.
Miller said that about 98 percent of the time, the couple is there to greet their guests when they arrive.
“I rely heavily on my gut instincts. I think I read people pretty well. There’s only been one group I wasn’t sure about. Sure enough, when they left, they left it in little less-than-desirable shape, but no damage or anything,” she said.
The Millers haven’t had rowdy guests, so there haven’t been issues with neighbors, either.
“They’ve been very understanding,” she said.
Airbnb requires guests to go through multiple security screenings when creating a profile to book rooms or homes, like scanning driver’s licenses and taking a photo that matches that license photo.
The screening process and meeting guests when they arrive is why Miller said she has never felt unsafe with strangers staying in her home.
“We love it. We absolutely love it. We can’t say anything negative about it,” she said.
Overall impact
The Brown County treasurer’s office, which collects taxes from tourist rentals, does not separate out Airbnb rentals from other types, so getting a read on how much tax money they’re bringing in compared to hotels, inns or tourist homes isn’t easy.
Many tourist homes that are marketed through local companies such as Hills O’Brown Vacation Rentals are also double-listed on Airbnb or VRBO, another nationwide vacation rental website.
The innkeepers tax funds the work of the Brown County Convention and Visitors Bureau, which markets Brown County to visitors. It is also a backup source of money to pay off the under-construction Maple Leaf Performing Arts Center, in case the venue does not make enough to pay its mortgage.
Brown County Convention and Visitors Commission President Kevin Ault said the CVC keeps an eye on Airbnbs along with the plan commission.
“Once we find out, we send them tax forms. Most of the ones are already legitimate innkeepers,” Ault said.
Brown County Treasurer Mary Smith said that when they find a rental that is not paying, “most of the time it is because people aren’t aware that there are rules involved when opening an Airbnb rental, not because they are trying to be dishonest,” she said.
Ellis and Ault said Airbnb has become another marketing platform for Brown County.
“It’s just one more mechanism, like Expedia.com or Hotels.com or any of those kinds of things. It’s one more avenue to rent rooms through,” Ault said.
Airbnb may also be another way to open more options for people to stay in Brown County, especially when the Maple Leaf Performing Arts Center opens later this year, Ellis said.
She estimates that currently, Brown County could sleep about 1,000 people including hotel rooms and tourist rentals.
“I think because our cabin industry is so strong here that it only makes sense,” she said.
“It’s a different philosophy. … If you look to the past, hostels, you think about people backpacking Europe and they pop into this house. It’s a little bit of that vibe.”
Patty Frensemeier, general manager of Hills O’Brown Vacation Rentals, said that some of their cabin owners have been keeping an eye on Airbnb listings, concerned about whether or not all of the properties listed are following the rules.
For instance, to get an official tourist home designation from the county, owners are required to get driveway permits, have their septic systems inspected and pay filing fees to notify neighbors of the tourist home before even requesting approval from the board of zoning appeals.
“There are 200 legal tourist homes in the community and we’re all sharing the guests; that’s great. But when you have 250 people sharing the guests, it does pull from those who have taken the time to do it the proper way,” Frensemeier said.
Once Hills O’Brown gets a different reservation system that syncs its rental calendar to the calendars on Airbnb and VRBO, Frensemeier would like to use those websites more to market her company’s rentals, she said.
Frensemeier is also the vice president of the CVC, which is in charge of collecting the innkeepers tax.
“On that board, that board is not responsible for legal and illegal,” she said.
“We are a tourist industry. Some people may just be happy to let the Airbnbs and VRBOs go because it’s bringing more tourism into the community and more people spending money,” she said.
Ault said that as long as Airbnbs are paying innkeepers tax, that’s all that matters. “I don’t know if we (the CVC) really care where the innkeepers tax is coming from as long as it’s legal,” he said.
He estimates that the CVC had come across around five or six illegal Airbnbs. “As soon as we see those, we just report them to planning and zoning. They come across them, too. Whoever finds them just addresses it,” he said.
‘It is the future’
Ault, who owns two Nashville hotels, said that Airbnb and VRBO are not changing the way he operates his properties. But he said he knows there are people who prefer Airbnbs over hotels.
“I have a couple of employees who just traveled to Chicago and they were going to stay at a hotel. The hotel was costing them some ridiculous amount of money. They found this Airbnb that was half the price. They said they get there, the place is really nice. It was somebody’s condo in downtown Chicago. They said, ‘We parked our car and never had to move it,’” he said.
Some may prefer Airbnbs over staying in a hotel depending on what experience they are after, Ellis said.
“There’s a movement — it’s probably from the millennials somewhat — but there’s more of a movement for an authentic experience. … It’s not about big and lavish, it’s about an experience,” she said.
When she went on vacation, she stayed at an Airbnb above a bakery, she said.
“I went in. I didn’t have to see the lady. I liked that. Some people don’t like that. We’ve had some places here where you can check in and you never see anyone. Over the years we’ve had complaints, but I think Airbnb brought that to light that this is an OK way to travel. It’s an affordable way to travel. But it’s not always about price,” Ellis said.
Ellis said Airbnbs are something to be embraced in the county.
“It’s the way of the future. You compare it to Uber,” she said.
“It’s a lot to understand, but it’s important because it is the future.”
Airbnbs could even help with the county’s affordable housing issue, she said.
“You’re a homeowner, maybe you think differently on how you purchase a house or what you do with your house to make ends meet,” she said, adding that renting out a room could be a way to help with mortgage payments.
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1. Marion (Indianapolis area): $14 million host income, 131,000 guest arrivals
2. St. Joseph (South Bend area): $5.3 million host income, 39,000 guest arrivals
3. Monroe (Bloomington area): $3.1 million host income, 28,000 guest arrivals
4. LaPorte: $2.3 million host income, 15,000 guest arrivals
5. Hamilton: $1.1 million host income, 11,000 guest arrivals
6. Tippecanoe: $1.1 million host income, 9,500 guest arrivals
7. Allen: $969,000 host income, 10,100 guest arrivals
8. Lake: $651,000 host income, 5,600 guest arrivals
9. Kosciusko: $611,000 host income, 4,900 guest arrivals
10. Porter: $603,000 host income, 5,400 guest arrivals
11. Brown: $432,000 host income, 3,400 guest arrivals
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