Vacation rentals can be a great way to build long-term wealth at the coast, but they also create a lot of moving parts: reservations, platforms, cleaners, repairs, and different types of taxes.
Here are a few practical tips we share with Carolina Beach and Wilmington-area hosts.
1. Keep one dedicated bank account per rental business
Even if you only have one property, running all income and expenses through a dedicated account makes everything easier. You can still move money out to your personal account, but the rental account becomes the clean record of how the property is performing.
2. Capture every payout and fee from your platforms
Airbnb, VRBO, booking sites, and property managers often deposit net amounts after fees and taxes. Your bookkeeping should separate:
- Gross rent paid by the guest. - Platform or management fees. - Cleaning fees you pay or pass through. - Taxes collected and remitted.
That breakdown is helpful at tax time and makes it possible to compare platforms fairly.
3. Track occupancy tax separately from income tax
In coastal North Carolina, occupancy and sales taxes are separate from your federal and state income tax. Good bookkeeping will track:
- How much tax is collected from guests. - How much has been remitted to the appropriate agencies. - Any timing differences between collection and payment.
This keeps you from accidentally treating those amounts as income and gives you a clear paper trail if you are ever asked for documentation.
4. Don’t forget mileage and local expenses
Trips to the property, meetings with vendors, and local purchases for supplies can often be deductible business expenses when they are properly documented. A simple way to stay ahead is to keep these purchases on the same rental bank card whenever possible.
5. Use your numbers to answer real questions
Ultimately, the point of bookkeeping is not just compliance—it’s clarity. Clean, organized books help you answer questions like:
- Is this property truly cash-flow positive after everything? - Can I afford to upgrade furniture or amenities this year? - Does it make sense to add another property in Carolina Beach or Wilmington?
If you’d like help getting set up or having your current system reviewed, Coastal Accounting & Tax works with hosts across the local beaches.