Airbnb has soared in success; it has become a modern way for property owners to earn some dough while travelers get to enjoy a more diverse range of accommodation, which on the site, is often more affordable, unique, and personalized in style in contrast to a hotel or resort.
For those unfamiliar with the service, Airbnb is a short-term rental marketplace where people can rent out their properties or spare rooms to travelers, earning returns that are usually higher than traditional renting.
But alas, such gains and convenience do not come without risk in the form of cons that do indeed balance out the pros. Not quite sure if letting out a property to strangers is the way forward? Then hopefully these detailed benefits and disadvantages might help in that decision-making process.
What Are The Pros of Airbnb Rental?
For starters, even though Airbnb is a top choice amongst travelers looking to save, the dollar to be made by offering one's abode on the site is really, really good - particularly if one's property is in an excellent location and is set up correctly to accommodate paying guests. For most properties situated in an ideal setting, such as those near tourist attractions or located in popular cities, opting for Airbnb rental in lieu of conventional renting is almost guaranteed to see higher returns.
Furthermore, Airbnb renters can relish that there is no lock-in contract when renting out via the site. In traditional renting, contracts are often long and strict with no way of getting one's property back for personal use or sale without lengthy waits and notice periods as per the contract designed to protect both owner and tenant. However, this kind of headache simply doesn't exist with Airbnb; owners can use the property personally whenever they like.
In addition, thanks to the nature of Airbnb rental, it also means that potential problematic tenants pose less of a threat than those under a normal tenancy. For example, in standard renting, if a tenant abuses the property or doesn’t pay rent, the law usually protects the tenant, not the landlord, and it can take a heck of a lot of time and ample amounts of money to evict any unruly tenants and retrieve lost income. But with Airbnb, this doesn't really happen since agreements between guests and hosts do not apply such rigid rules, with contracts being more akin to that of a hotel; shorter in duration, and easier on the host.
From a more convenient point of view, Airbnb renters can also inspect their property frequently, especially during changeovers between guests. This isn't always possible throughout a traditional let, during which landlords have to give due notice and abide by specific rules before being able to even enter their property.
What's more, Airbnb hosts are also able to address issues in good time; either by inspection themselves, reports from guests, or from their cleaning staff. This means that any problems with an owner's property can be discovered and dealt with much faster, preventing further maintenance hiccups and costs down the line.
The property also gets cleaned far more often than one under a conventional rental agreement. Instead of once in a blue moon, one's Airbnb rental usually gets cleaned at least a couple of times a week in between guests, therefore staying in better shape than one occupied by long-term renters who may or may not employ a mop or a duster - even if only scarcely.
Still, on the topic of wear and tear, Airbnb guests typically don't spend much time at the property. This is because, more often than not, they're visiting an area for tourism or business purposes, meaning they're, generally speaking, out and about at work or exploring the area, spending less time indoors. For the most part, this translates to less time-wear of the property thus lower cleaning and upkeep bills for the owner.
Moving onto even more methods of cost protection, all landlords should always have insurance to cover themselves and their property in the case of any incidents or accidents - and Airbnb owners are no exception. However, Airbnb as a service has some of this covered for any would-be unfortunate guest shenanigans; Airbnb's Host Protection Insurance offers landlord liability cover up to one million US dollars for third-party claims of property damage, bodily injury, or loss of earnings - a reassuring, convenient, and exclusive package that is only available to Airbnb hosts, not everyday run-of-the-mill landlords.
Last but not least on the list of favorable Airbnb pros is that property owners in certain parts of the world might be able to take advantage of money-saving governmental schemes. For example, among many esteemed financial benefits, Airbnb-ers in Europe can claim back property furnishings on capital allowances - so long as the property meets the conditions to qualify as "Furnished Holiday Let" of course. A second superb sample of financial perks is the possibility of tax breaks for Furnished Holiday Lets in the United Kingdom.
What Are The Cons Of Airbnb Rental?
First and foremost in the cons department is the knowledge that letting one's property on Airbnb comes under a different domain; it is not real estate, it's hospitality, the latter an industry entailing a higher level of service to meet guest expectations. This means that, unless one already knows how to match that required level of hospitality service and pander to the demands of guests, hiring someone experienced and qualified who does might be needed if success is to be on the cards.
Secondly, the income to be had from Airbnb rental can be seasonal-based and may sometimes become unstable - especially in the beginning. It may start out high, but should the property and/or host be lacking in any way and fail to meet guest expectations consistently, bookings can decrease dramatically - never to return again. Airbnb is an unforgiving business venture that, should less-than-positive reviews begin to stack up, it's all over, which is why taking care of the property and ensuring guests' stays are nothing short of five-star are the minimum standards for success.
It's also worth noting that renting a property out through Airbnb may be restrictive in specific countries, regions, or states, with some areas making it virtually impossible at particular times of the year. A number of areas have laws, regulations, licensing, and restrictions, which means aspiring Airbnb businesses really need to ensure they're experts in the local law before even thinking about launching their rental plans.
In addition, property owners who choose not to employ a manager will need to ensure their Airbnb rental are fully stocked with everything guests need, as well as replace any damaged items, arrange cleaning, and pay utility bills themselves as the owner and host. Normally, tenants under a traditional long-term rental agreement buy their own goods and amenities, pay their own utility bills, and also pay for any damage they might do to the property and its contents. On the other hand, in Airbnb rental, it's usually the host who supplies household necessities, shoulders the cost of any damage and pays all utility bills.
Another point to consider when pondering the cons of Airbnb is this: how much time and energy does one have to take on intense amounts of admin and guest liaising? If the answer is "not a lot," then doing so may not be the best idea. Airbnb hosts do indeed spend a lot of time and effort messaging guests, offering information about the property, discussing details about their stay, instructing them how to get to the place, organizing key handovers, recommending local attractions and activities, and overall answering any and all queries guests and potential guests may throw their way.
Additionally, Airbnb-bound readers may have felt some relief when hearing about the aforementioned Airbnb Host Guarantee, which provides up to a million dollars of protection, right? Well, even so, hosts need to err on the side of caution; allegedly it's not that easy making a claim and each one is at the sole discretion of Airbnb. Ultimately this means that, despite Airbnb's handy insurance offering, taking out one's own coverage may indeed be the safer option - particularly if pure peace of mind is an absolute must.
Last on the list of woes that hosts could face is this: Airbnb letters with a mortgage on their property technically have to let their lender know about its change of use - a feat that could possibly end in an unpleasant showdown with big lending companies since a significant portion of them are said to be unpleased by Airbnb use. Thus, would-be Airbnb hosts must check with their mortgage provider before letting any guests book a stay.
In conclusion, it would seem that for every benefit, there's a woe - even for those seeking out the financial reward and convenience awarded by renting their property to guests through the safety of Airbnb. Employing the site is truly no different to conventional landlord-tenant renting in the sense that there are pros and cons. However, the difference lies in what a host wants to get out of property rental, which is, in all probability, the determining factor that defines if Airbnb is genuinely a bright idea or not. In terms of convenience, property maintenance, fewer legal restraints, fewer issues with risky tenants, and making a quick buck - potentially more than would do under an old-school let - Airbnb is probably the way to go.
But for such perks, Airbnb hosts will have to put a lot more time and effort into guest satisfaction, maintenance, supplying the property with everyday necessities, and of course, they have to pay all the utility bills. The only things that remain constant for both Airbnb-ers and traditional landlords? There's a ton of hard work, time, and patience involved - no matter which rental route one chooses.
Even after all is said and done, the menu of pros and cons defined, and all points answered, there exists the ever-important, final consideration. To unsure readers questioning if Airbnb is the life-friendly business and money pot they may think it is, the question to help make their decision is this: is one a real estate professional? Or a hospitality worker? If the former is more fitting, then think long and hard before pursuing those Airbnb dreams. In contrast, if it's the latter, welcome to the rewarding career of a standout Airbnb host!