The Pros and Cons of Renting Your Home as a Short Term Rental (Airbnb)
In recent years, the number of people using Airbnb to find vacation homes has increased significantly. This has created significant pros and cons for homeowners in need of additional income. It's important that you understand these before deciding if converting your investment property into a short-term rental is right for you.
Pros
1. Your property will get cleaned multiple times per week instead of never. Airbnb guests expect a clean property.
Unlike renting out your property long term, where your property will get cleaned once every blue-moon... when renting out your property on Airbnb, it will get cleaned after every stay.
2. Airbnb guests are usually a pleasure to deal with, especially when compared to long-term tenants.
Airbnb guests tend to be very grateful and respectful towards your property. They will also treat your home/apartment as if it is their own... Airbnb guests typically spend more money on groceries than the average person staying at an Airbnb... because they will need to buy things like shampoo, toothpaste, etc which they don't already have in their possession when traveling from place to place.
3. You'll earn more from your investment property.
When we first started out, we'd help hosts on the Gold Coast convert their property from a long-term rental, where they were making $1,000 per week, to a short-term rental, where they'd be earning $1,000 per night.
This is obviously highly dependant on the area, but in 99 times out of 100, we've found that letting your property on the short-term rental market will drastically improve your ROI (return-on-investment).
Cons:
1. It's impossible to get references from Airbnb guests.
Airbnb guests are not obligated to provide you with a reference... however, Airbnb does require hosts to review the guests after they leave, giving you somewhat of an understanding as to what kind of guest they are.
2. More time investment on your end
Unlike renting out your property long-term, Airbnb requires more of your time. Airbnb guests don't need to live in your home... Airbnb is truly a place for them to stay while they enjoy their vacation, where as long-term renters are required to live in the property full time.
When renting out your Airbnb short term, you will have much more interaction with the Airbnb guest than you would if you rented your property long term. You'll have daily check ins, and must respond quickly when issues arise. Airbnb prides itself on being a "platform" which hosts (property owners) and guests can find one another...
3. Potential for guests damaging your home
Although Airbnb guests are generally respectful, Airbnb hosts have experienced vandalism and theft.
This is where Airbnb's "host guarantee" comes in handy... Airbnb covers up to $1 million of your property... which means Airbnb will actually cover the cost of repairing/replacing any damage caused by an Airbnb guest. Airbnb also requires Airbnb guests to sign a contract which protects you as the host.
4. The short term rental market can be competitive
If there are more Airbnb properties available than guests wanting a place to stay, you're out of luck... your property won't get booked and you'll miss out on potential income. This is why it's important that you have the right strategies in place in order to consistently outperform your market.
If you're looking to implement the strategies that will set you apart and allow you to be a part of the top 1% of hosts who dominate their local market, then check out our new free training by clicking here now.