The arrival of Airbnb changed the rental market. It allowed people to easily make a few bucks out of their spare room. However, this quickly evolved and soon it became a viable way to run a business.
In fact, it has encroached on the hotel marketplace with around '49% of Airbnb users in 2016 using it as an alternative to hotels.'
Why? Because people get more out of their Airbnb for less cost than a traditional hotel room, '53% of travelers use Airbnb because of price'.
There is one thing though that we can all agree about Airbnb, it offers everyone an opportunity to make money from the property they own.
However, we wanted to assess whether it might be worth using a primarily long term rental property as a short term one in-between leases. Do the benefits outweigh the downsides?
In this article, we are going to outline these issues and (hopefully) help you decide whether or not this could be a good move for you.
Let’s start with wondering just why one might consider this?
The first and probably main reason is money. Filling short term vacancies in your property with high yielding Airbnb guests seems like a simple and easy way to make a little extra money from your property during periods it would otherwise not be earning, and potentially still costing you.
In the US, the average nightly rate for just a private room in a house is $70 (Houston) - $90 (Miami). That works out at up to $490 - $630 a week or $1960 - $2520 a month, for just 1 room in a house. A whole property would be much more valuable.
The second reason is ease. Airbnb has around 150 million users worldwide and has roughly 1.8 million bookings a night! Using Airbnb is an almost guaranteed way to get guests.
Managing an Airbnb Property is different from managing a long term rental property. What tenants expect is different, both in terms of engagement from the host or landlord and in the presentation of the property.
Here are a few of the key differences:
A lot of long term rentals come unfurnished. There are good reasons for this.
Essentially though, people often have their own furniture which is nicer than anything a landlord is likely to risk with their tenants (who are essentially strangers).
Airbnb'ing though isn’t going to work without some nice decor and decent furnishings.
The landlord becomes solely responsible for the cleaning of the property. High levels of cleanliness are expected from Airbnbs, meaning the property will need to be deep cleaned after every guest.
This isn’t a bad thing as it means that when your next long term tenant does move in, they will move into an immaculate space. And it will also make sure your property stays well maintained during vacancies.
This previous point leads us to this one quite neatly. The increased amount of time landlords will need to spend managing a property. Whether that’s organizing increased maintenance demands, sorting out cleaning or just engaging with guests.
On top of this, Airbnb ratings become increasingly important and time-consuming. This rating centers around customer service and added value features.
People want to be surprised by the high level of service they receive. This takes time. However, if you can manage it well for Airbnb, then you will only get better for your long term tenants.
Cut down management time and stay on top of your rental properties with property management software.
Guests often expect an experience something like a hotel, but friendlier and more familiar. They expect then to be given tips, advice, and information about the area. This again takes more time to organize and manage.
Renting any property out has its risks and no amount of tenant screening or care taken will protect you from those risks. When you have a number of people coming in for short stays, two or three nights, this risk increases with every person that comes into the property.
What is worth mentioning though is that Airbnb acknowledges this and offers cover for claims up to $1million for their hosts with every booking to protect them from the increased risks of having multiple tenants.
However, keep in mind that repairs and maintenance take time and there is a risk that your Airbnb guests might cause problems for your next tenants and interfere with your planned lease schedule.
Different properties will be more or less suited to this, depending on the length of vacancy, furnishings, and location. Ultimately though, it comes down to you, the landlord, as to whether you think it’s worth your time and if it’s worth the risks.
As the property owner, you’re responsible for non-compliance with snow removal ordinances, so it’s best if you make sure snow removal equipment is available. You may even find if you check the local bylaws that you are required to keep public thoroughfares that cross our property free from snow too...