All over the world, local and national governments have taken relief measures to help big and small businesses survive the coronavirus COVID-19 crisis. The travel industry counts among the earliest and hardest-hit sectors. Vacation rental managers, Airbnb property management companies, ancillary services such as cleaning companies and independent cleaners have all been hit and need to take action to take advantage of such measures.
Rental Scale-Up interviewed James Von Der Lieth, the founder of VRM Empire. Thanks to his double background in accounting and in vacation rentals, he is uniquely positioned to explain how small US vacation rental industry members can apply for these measures.
This interview was first broadcasted live in our private Facebook group. Join our newsletter to get your private access to the group and see what other readers are saying about the crisis.
James Von Der Lieth (VRM Empire) on taking advantage of the US stimulus
As mentioned in this video, James has written two great articles about the topic:
- How Self Employed and SMBs Can Take Advantage of Forgivable U.S Stimulus Loans
- $2 Trillion U.S Stimulus Set to Help VRM’s, STR Cleaners, Home Owners and Airbnb Hosts
Transcript of the video:
Thibault:
Dear Rental-Scale-Up members. Thank you for joining this live stream. Today. I’m joined by James Von Der Lieth James is from VRM Empire. James comes to us with a great background. Not only is he a short term rental owner like none of us, but also vacation rental skills with a background in accounting, specifically accounting software. And today we’ll be talking about how people, especially US property managers can take advantage of the US $2 trillion stimulus package..And even if you’re not in the US actually it’s going to be interesting because they are sort of similar packages around. So that’s a quick intro. James is this a fair intro of yourself?
James:
Thanks for having me on Thibault and for that great introduction. I’m excited to share some knowledge with your readers.
Thibault:
What’s fascinating is that you are also an amazing writer and on your website VRM Empire. You’ve started the blog with lots of great content on and I think the obstacle I’ve shared with you in a group is how people can take advantage from the US plan. And I know there’s been details published again today and on, on more details on the hospital work and you wrote another blog post. We don’t put the, we do. How can people take advantage of this?
James:
Yeah. This is such an exciting program. I think given the time we’re at in the US and all across the world with the coronavirus and how it’s really affecting vacation rental managers. Last week when the stimulus bill was passed, there was good cause for excitement for essentially, you know, forgivable loans for small businesses. But what we also heard is that Airbnb had been lobbying for gig economy workers, freelancers, people like cleaners that are, you know, freelancers, all these people in the industry to actually be able to be eligible for these loans. And until yesterday when the treasury put out this document explaining more in detail how the laws gonna be put into place in the US there the details are still murky and we weren’t sure, but now looking at the details and coming through this five-page document they’ve put out, it just seems like a no brainer for anyone in the short term rental or vacation rental space in the US to apply for. And hopefully, it will set a trend across the world as much as it can to, to help other people in other countries.
Thibault:
And what’d you saying again? Reading the articles was interesting because it was really well put, you said anyone can benefit from it, but actually kind of depends on whether you have a company, you’re a big company or if we’re going to host and you reach them, it’s pretty well. Can you maybe in a few words, I did pick the different situations that people are in.
James:
Yeah, absolutely. So any small business or self-employed person or even contractor that’s negatively affected by the coronavirus crisis is eligible to apply. It’s free to apply. There are no SBA loans. And they can go on, you know, it’s apply through an SBA lender in the US
Thibault:
So it seems, it seems pretty easy to benefit from the old days. Do you think I mean you’ve probably had a practice, you know, your background of, of the small, a piece of legislation? I think that’s the word in the US Institute processes. I guess like any illustration or our government in Tennessee sometimes can be a bit slow. Do you think they could have some special processes? Have they announced anything around speaking of the processes, for example?
James:
Yeah, the secretary of the treasury has announced they’re, you know, trying to cut as much red tape as possible. And it’s going to be, all these loans are going to be going through that. The typical SBA, which stands for small business administration loan system in the US so there is some concern that the demand for these loans and the unprecedented amount of funds that are gonna be available is going to overload the system for these banks and that it’s going to take a while. So, you know, one of the main takeaways for anyone in the vacation rental industry that’s gonna apply for one of these is don’t count on these funds coming tomorrow. It’s going to take some time, but you want to get in line as soon as possible. And what they’ve announced yesterday is that they’re hoping by April 3rd which is Friday, small businesses will be able to apply and then April 10th self-employed and contractors will be able to apply. And they’ve also put out an application, a sample application, so you can go on and have it in the article. You can look at it and you can make sure you’re prepared so that on the start date you can secure your place in line and hopefully be able to get benefit from this program.
Thibault:
Yeah, that’s pretty great. Three or four, as you said, so people can take the time. Well maybe they’re going to be, there’s gonna be another load, so it’s better to get started early, I guess on the process and be ready to fill in data in nine in the fall. So it’s also for, as you said earlier, independent, independent people. I guess the, to me, the one very clear for people who maybe had been a for 18 you know, several Airbnb apartments on the sides of more or less, whether they will be able to benefit from these kinds of things.
James:
Yeah. it’s complicated because the one big thing to keep in mind for any of these loans is you have to be 100% honest about your answers. If you’re not honest, the US government can come after you after the fact. And you know, basically, it’s perjury. It’s a big crime to lie on an application. So as long as you have a legal business that’s, you know, operating within the following laws, I believe that’s one of the questions on the SBA loan is your business following the laws. So if you’re in a rental arbitrager and you’re illegally renting out properties and apartment buildings and it’s not technically allowed and you’re skirting the rules, you probably don’t want to add even more trouble to your, to your plate and get in trouble. The US government for forging a wrong. So yeah, that’s, that’s really the takeaway is businesses that are ethical, doing the right things that are following the laws will be able to apply for this.
James:
And the other big takeaway is the reason it’s really a no-risk to apply is even if you are approved for the loan, you don’t have to take it. And there are no penalties for not taking it. There are no application fees. So it’s really just a great deal. There’s the part that’s still a little bit unclear is how people that don’t have employees, how much of this loan they’ll be. That would be forgivable. But even if the whole thing an off chance, the whole thing’s not forgivable. It’s still such a low-interest rate of 0.5% and it’s not doing until two years. So it’s basically free money you can get and worst-case half the pay it back two years at a very, very low-interest rate.
Thibault:
Thanks for the details. How would you, how could you go on this overview and other points I want you to touch upon is that this probably also some intro for managers around the world, but just in the U S to right now go to the local association of property managers. You, you are sharing something happening in the US right. Some people have banded together to get some money returned from local governments. Can you say a bit more about that?
James:
Yeah, so this is a recent trend that we’re keeping an eye on. Actually one of our readers reached out and let me know that 250 of his local vacation rental managers and Airbnb hosts came together, put out a letter to local governments asking licenses back there during the $50 license fee. Each back, immediately the government said, yeah, we understand it’s a tough time. They gave it back, which totaled about $80,000. And as I looked into it, this is sort of happening grassroots all over the world. There are different cases of it where there are so many different fees like business licenses or property, increased property taxes for investment properties that if, if local VRMs across the road when a band together in their markets to go lobby local governments for refunds on these items, it’s a really good idea right now, especially during the thick of this.
Thibault:
That’s great advice. So this is great advice. Again, we use thanks for your time. It goes again, you are presenting this great mix of skills, no accounting, you know, the, you know, our industry pretty well. And you can explain things pretty thoroughly as you could see. So what’s the best way for people to reach out to you if they want to know more?
James:
So the best way right now is to check out our website at VRMempire.com everything’s on there. You can sign up for a free STR newsletter that we’re sending out daily at this time. And also, all my contact information is on there. So I look forward to hearing from some of you guys.
Thibault:
So James, again, once again, sorry. Thank you for your time. We all doing this from home, so you can imagine it’s always a very interesting experience, but as usual, we are all in there and we’re all trying to help each other out. So go to VRM Empire for more content and I see everybody pretty soon. Thank you again, James. Bye.
