One of the biggest hurdles with the Augusta Rule is figuring out how much rent to charge your business. If you price it too low, you’re leaving tax-free money on the table. Too high? You could risk an audit.
In this video, we break down:
Why Airbnb rates don’t cut it for business events
What kind of venues actually make good comparables
Why automated data sets often undercut your true value
And how our team does the legwork to find the sweet spot, fair market rent that favors you and holds up under scrutiny
We don’t guess. We don’t ask you to find comps. We handle it all, so you get every dollar you deserve, fully compliant and audit-ready.
Want custom comps and compliance documents done for you? Book your strategy call.
Transcript:
0:00
Once you commit to applying the Augusta
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rule, one of the common concerns is
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establishing the correct rental
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valuation for your events. Or more
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specifically, figuring out how much rent
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to charge takes a lot of work. Don’t
0:12
want to do it? Not going to do it. Well,
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good news. You don’t want to do it and
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you’re not going to do it. We do that.
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We do it with some nuance. You can try
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and go for the super high-end, but it’ll
0:22
probably backfire. In other words,
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little pigs get fat, big hogs get
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slaughtered. So, I probably wouldn’t do
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a hotel valuation that includes things
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like personal property, audio equipment,
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etc. I also wouldn’t go as low as
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Airbnb. We’re shooting for the sweet
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spot, which is what do event spaces go
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for? One of the things that people
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usually do is go out to Airbnb sites and
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look at what houses are renting for
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overnight. The problem with this is
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twofold. One, uh the business event that
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you’re hosting is not comparable to an
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overnight event at a residence. Uh two,
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the valuations are far lower than they
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could be for a business event. What you
1:00
actually need to look for is more like a
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convention center, a hotel minus all the
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other sundries that they might include
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to the rental. So it takes a little work
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to actually get that uh rental valuation
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or even like a wedding venue often. So
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in doing this, you can’t just go out and
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get a digital valuation. In fact, we
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tried to do this with the app initially,
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experimented with different data sets
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and just saw that we’d be selling
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ourselves short on the value. So, for
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example, my own home with the digital
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data was valued at $750 a night rental
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when in fact I have comparables from
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wedding venues locally that are 3,000 a
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day rental value. So the difference in
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valuation is so huge that it requires
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actual boots on the ground or actual,
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you know, phone calls or emails and and
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getting the data from the correct rental
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comparables so you can maximize the
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valuation. And that right there is one
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of the major selling points alone of
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what we’re doing. We’re going to
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maximize the rental valuation for your
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property and give you the maximum
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benefit that you can get under law. So
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we’re going to do the work. You’re not.
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Fair market value is subjective. We’re
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going to pick a value that favors you.
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Now, if the IRS wants to disagree,
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that’s their prerogative. Let them have
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at it. Why do I not mind that? Why does
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it not bother me? Because we’re going to
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have data to back it up, and we’re going
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to come up with it, not you. That is a
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major value ad.
