Redweek Fees

[Don Springett]

I have been using Redweek to rent units out for around 20 years. Early on, I think the only option was to do it yourself other than listing so I collected the money, showed the renter verification that had the reservation, advised them they were responsible for the small tax. Recently I signed up for the full service and was thinking the $59.99 fee vs $39.99 was worth it and was a little miffed I missed the small print showing the $99 fee charge when the unit booked. I am now noticing odd weekly and room night values so on clicking on the weekly fees it shows a base rate plus a fee. For example, a $5200 WKORV added $493, a $8100 WKORV added $754, a $4200 WKV added $403, and a $2100 WKV added $214. Redweek has been responsive to my questions and they said they have always added fees for Verification and Protection and they disclosed this at the time of booking, but due to a Ca law, they are required to disclose fees. For most of those years where I collected myself, my price was their total price except for the tax, which is around $33 per night in Maui for a 2 BR (Owners still have to pay this tax even after paying the Redweek fees). This seems like a lot just to verify a listing and the work on Redweek part is the same whether it is a $10K listing or a $2K listing. Am I missing something or is Redweek significantly increasing profits? Any suggestions on alternatives. I have used TUG and MyResortNetwork in the past but both do not seem to be very active.

 

[jwalk03]

Redweek is significantly increasing their profits by charging fees to seller and buyer.

Personally I continue to do rentals the DIY way and refuse to pay Redweek these extras.

 

[dioxide45]

Redweek charges the renter about 9.5% as a booking fee for Verified & Protected (which is included in Full Service). This in part covers the merchant fees for the renter paying by credit card. It also covers administrative costs with collecting and remitting taxes to the states where they are doing that. Of course a big chunk of it is also their profit.

 

[tschwa2]

When redweek is required to collect tax, they do so. Usually when they do, you would be required to collect that tax and register with that state or county and submit the tax too but the state doesn't really have a way to track your rentals when you collect the fees yourself so it is a case of if they don't know they likely aren't going to spend any resources to find you and get those taxes from you.

 

[daviator]

When redweek is required to collect tax, they do so. Usually when they do, you would be required to collect that tax and register with that state or county and submit the tax too but the state doesn't really have a way to track your rentals when you collect the fees yourself so it is a case of if they don't know they likely aren't going to spend any resources to find you and get those taxes from you.

But the devil, as always, is in the details. Redweek does NOT collect and remit taxes that the owner is required to pay but Redweek is required to collect. I’m specifically speaking about GET and TAT in Hawaii, both of which are required to be paid by anyone renting tourist accommodations there, but there is no requirement that they be collected from the renter.

So Redweek does nothing and the owner may falsely believe that they have no liability. Some of the counties there have started staffing up enforcement and they may indeed start coming after owners who rent their ownerships to others.

I imagine there are other geographies which impose taxes on vacation rentals which Redweek may also not deal with. I don’t feel like they actually do much to justify the large fees they collect from both the owner and the renter.

When I’ve posted about this in the past, there are always owners who object and claim that Redweek takes care of all that. No, they do not, they never have. If they did, that would actually add a lot of value to their service, at least from my perspective.

 

[dioxide45]

But the devil, as always, is in the details. Redweek does NOT collect and remit taxes that the owner is required to pay but Redweek is required to collect. I’m specifically speaking about GET and TAT in Hawaii, both of which are required to be paid by anyone renting tourist accommodations there, but there is no requirement that they be collected from the renter.

So Redweek does nothing and the owner may falsely believe that they have no liability. Some of the counties there have started staffing up enforcement and they may indeed start coming after owners who rent their ownerships to others.

I imagine there are other geographies which impose taxes on vacation rentals which Redweek may also not deal with. I don’t feel like they actually do much to justify the large fees they collect from both the owner and the renter.

When I’ve posted about this in the past, there are always owners who object and claim that Redweek takes care of all that. No, they do not, they never have. If they did, that would actually add a lot of value to their service, at least from my perspective.

They get the fee if there are taxes to collect or not. I suspect they think the fee is justifiable because the owner doesn't have to deal with contracts or payments. Any Full Service Rental is also Verified and Protected and thus the renter gets charged the ~10% fee. The fee certainly goes to cover Redweek operations. $160 from the owner for a completed full service rental doesn't seem like all that much when Redweek is supposedly fielding all communications with potential renters, handling the contract, collecting payment and remitting taxes if applicable.

 

[rickandcindy23]

@daviator So you are saying Redweek lies by saying they collect taxes and remit to the local city/ county, similar to hotel taxes? Usually these taxes about 12-18% of the rental price.

I don't want to inquire about renting a week to find out. But you know this?

I ask because when I list my Disney Vacation Club 5-night stays on RW, there is a warning that I have to collect local taxes. I wouldn't have a clue how to do it. I rent some of my DVC myself but have RW verify/ protect some of the listings. That is why I verify/protect, to not get into trouble for not paying taxes.

 

[dioxide45]

@daviator So you are saying Redweek lies by saying they collect taxes and remit to the local city/ county, similar to hotel taxes? Usually these taxes about 12-18% of the rental price.

I don't want to inquire about renting a week to find out. But you know this?

I ask because when I list my Disney Vacation Club 5-night stays on RW, there is a warning that I have to collect local taxes. I wouldn't have a clue how to do it. I rent some of my DVC myself but have RW verify/ protect some of the listings. That is why I verify/protect, to not get into trouble for not paying taxes.

If Redweek is collecting the tax, they are remitting it. I think the situation @daviator is talking about those states where the owner is supposed to remit tax but Redweek doesn't collect it. In the case of Hawaii, I don't think the law requires that the renter pay it just that the owner remit it. So the taxes can either come from the renter or come out of the rental proceeds by the owner.

 

[daviator]

@daviator So you are saying Redweek lies by saying they collect taxes and remit to the local city/ county, similar to hotel taxes? Usually these taxes about 12-18% of the rental price.

I don't want to inquire about renting a week to find out. But you know this?

I ask because when I list my Disney Vacation Club 5-night stays on RW, there is a warning that I have to collect local taxes. I wouldn't have a clue how to do it. I rent some of my DVC myself but have RW verify/ protect some of the listings. That is why I verify/protect, to not get into trouble for not paying taxes.

I’m not saying they lie, I’m saying that they don’t do it unless it is a legal requirement that THEY do it.

if the law requires that the occupancy taxes be collected from the renter, I imagine they collect and remit those (but I’d want to see them put that in writing.)

But in places like Hawaii where the law merely requires the person renting out a dwelling unit to report and remit taxes on the rental amount, Redweek doesn’t do that. The law doesn’t require anything to be collected from the guest (although it doesn’t prohibit it, either) and Redweek leaves it to the owner to register with the state and county and report and pay the taxes. So Redweek isn’t doing anything illegal, they are just passing the buck back to the owner, who usually doesn’t know about the taxes or how to pay them.

The whole thing is messy and I feel like most owners would begrudgingly pay the taxes if someone – Redweek, for example – made it easy for them to do so. But nobody provides that service and I think many, if not most, owners in Hawaii who rent their units are breaking the law and setting themselves up for big fines if caught.

 

[daviator]

If Redweek is collecting the tax, they are remitting it. I think the situation @daviator is talking about those states where the owner is supposed to remit tax but Redweek doesn't collect it. In the case of Hawaii, I don't think the law requires that the renter pay it just that the owner remit it. So the taxes can either come from the renter or come out of the rental proceeds by the owner.

Exactly. And the owners assume that Redweek is taking care of all of those things, but in fact they are not. I am NOT accusing Redweek of lying, but I think that many owners think that a “full service listing” includes things that it actually does not.