This Woman’s Retirement Years Are a Nightmare Thanks to Airbnb

Photo by Melinda Crow

Ellen inherited her modest lake house in Texas from her mother. It had always been her plan to retire there in the quiet neighborhood that stretches along an almost hidden piece of the shore of Lake Whitney.

She eventually did just that, only it’s no longer the quiet neighborhood or quiet retirement she envisioned.

Vacation rentals pre-dated Airbnb

The first rumblings of neighborhood troubles started more than a decade ago, as vacation rentals gained a foothold around the lake. The first vacation rental house on Ellen’s street was not an Airbnb listing. It was managed by a small company from Plano (a suburb of Dallas) that started managing and advertising short-term rental properties around Lake Whitney long before Airbnb ever launched. The neighbors near the rental had problems with the renters of that home from the very beginning.

The property owner left the country, assuming that the management company would take care of everything. They kept the money flowing with weekend rentals throughout the summer and cleaned and maintained the pool and grounds.

It was not enough. The neighbors complained of trash, noise, vehicles parked on neighboring properties, and even outright trespassing as the renters crossed the yards of non-rentals trying to get access to the water. After a year in which the property grossed more than $70,000, netting the owner over $50,000 and the management company a tidy sum of their own, the neighbors essentially gave the property owner enough grief that she stopped renting it and sold the house.

The neighborhood breathed a collective sigh of relief.

Enter Airbnb and Ellen

Fast forward to 2016 when Ellen’s next-door neighbors decided that the house where they once lived, but now rarely used once their children outgrew weekends at the lake, would make an ideal Airbnb listing. They posted professional photos and the money began to pour in. And then the parties started.

If you’ve never lived at a lake, you may not realize that they sometimes attract a party crowd. While some people visit lakes to fish or participate in water sports, others arrive with kegs and carloads of friends with only one plan in mind. Par-tay!

At first, Ellen had calm words with her neighbors

Then the neighbor on the other side of Ellen’s property decided that he was not getting enough use from his lake home, either. He rented it himself for a bit, then eventually sold it last year to a couple from out of state whose sole intention was renting it on Airbnb.

Short-term rental properties are an ideal investment if you’ve got the money to get started. They provide business income that is taxed by the federal government as rental income, thereby avoiding the self-employment tax associated with running a business. In many cases, they are overlooked by local property tax authorities, who may not even realize that they are in fact, commercial operations. Some owners (including one of Ellen’s neighbors) even claim homestead exemptions to further lower the property tax.

Airbnb recently began collecting and remitting the 6% state hotel tax required on rentals in Texas, but that leaves most local hotel taxing authorities struggling to locate these properties to enforce collection. In a few cases, management companies handle the hotel taxes, but other property owners we talked to simply ignore the local laws, stating that they don’t apply to them because they aren’t a “hotel.”

Endless summer parties

So now Ellen is sandwiched between two commercial properties rented with very little oversight, frequently to large loud groups that exceed the capacity shown in the rental listing.

During summer, one group moves in for weekends, only to be replaced by another group moving in for a weekday vacay. In case you think that the quiet returns when fall arrives, think again. The lake is a mere 35 miles from the Baylor University campus. The ability to throw a kegger far from campus is too easy to resist. And guess what? Off-season rates begin just as school begins.

For a little over $200 per night, these houses are an ideal party venue. Even though the listing clearly states that events are not allowed, one of the houses next door to Ellen was a wedding venue last summer. Bargain!

Although Ellen still carefully chooses her words, they are not always calm. She has had to install permanent barriers to prevent parking on her property. She initially put in temporary stakes, until she caught renters pulling them up so they could back their boat out of the rental driveway onto her lawn.

In the early days, she called the local sheriff’s office often, but after being told that no laws are being broken, she has all but quit calling. She lets the property owners know when their capacities are exceeded, which then nets the offenders a “thumbs down” on Airbnb. But that’s not a problem when you are renting with a group of party buddies. If one gets a bad reputation on the site, someone else creates an account for the next rental.

Instead, Ellen is the one getting the reputation. She is proud of being viewed as the “crazy lady” of the neighborhood.

I hope they all think I’m crazy. Maybe it will make them think twice before they get too wild. I’m thinking of bringing out voodoo dolls next.

The bigger the better

Ellen’s house is dwarfed by the two larger houses on either side of her property. She has always been fine with that. It keeps her taxes manageable. Except that now, even if she eventually finds that retirement life “between motels” is unbearable and wants to follow in her neighbors’ footsteps, her property is far less desirable as a short-term rental. Because the partiers tend to rent far larger properties in order to have plenty of space for everyone to flop as the party winds down, Ellen’s house would probably only rent to couples or small families — who would then be unhappy with the parties that surround the house they thought they rented for a quiet weekend.

There truly are no consequences for anyone but Ellen (and any other neighbor close enough to be affected by the noise.) One industrious neighbor decided to play nice with the partiers and now makes extra money renting out his Seadoos to them.

The renters are all but untouchable if they aren’t visibly breaking any laws.

The owners of the rentals are making money like there was a printing press in the garage, so they have no incentive to slow the flow of renters. The state comptroller’s website no longer lists hotel tax figures, but some quick math puts the net from either of Ellen’s neighboring rentals in the mid-five-figure range. Even if they opted to go up on their rates in an attempt to improve the clientele, the parties would simply grow larger so there would be enough people to cover the rental split among all the partiers.

The county has no desire to regulate something that brings visitors to the area who buy gas and groceries.

The state of Texas is getting their cut of the action now.

Real estate agents are happy. The market for large lake houses in the area has improved considerably.

As long as the activities are legal and don’t cause actionable damage to the rental property, Airbnb has zero incentive to control what renters do once they pay the rent.

The only other losers in the Airbnb game are small Mom and Pop lodging facilities, but that’s a whole other story.

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