As a landlord, you want to know that you’re making the most you could from your property, but you also want to know that you’re looking after your investment too. With the rise of Airbnb it can be tempting to want to rent out your property that way, but how does it really stack up against long-term renting?
At first, Airbnb might seem the better choice, financially, since you can charge per night, and would make more than renting that property out for the week. But, this method is not without its costs and risks, and these are things that you’ll have to consider if you want to turn your property to an Airbnb.
Airbnb actually provides an impressive amount of financial assistance in the event that your guests damage your property, although you have to become a registered host. In order to become a host, you have to meet certain guidelines, which can be found here. If you’re not a host, however, then you’re at risk of losing out because of careless guests. And unlike a standard tenancy, you don’t have a security deposit to cover the cost of any damage.
If you’re in a high demand area, and have lots of guests staying for short periods of time, you’re going to have to consider between guests. Commercial cleaning can become expensive, but cleaning yourself is very labour intensive, and can be difficult to get done if you’re working elsewhere during the day. You might have to do a more intensive clean after a long-term tenancy, but those are going to be, at the most, once a year.
There’s no guarantee that you’re always going to have a steady flow of guests through Airbnb. You might be full during sports events or festivals, but you might have periods of times where it’s hard to attract guests. And, as we all know, the longer your property is vacant, the less money you’re earning. With full-term tenancies, it’s easier to organise tenants in advance, so when one moves out you know you’ve got another one moving in soon. A long-term also ensures that you’ve got a consistent and steady flow of income.
While Airbnb has its risks, there are plenty of reasons that it’s become as popular as it has. Airbnb is great for tourists, and for people that don’t want to pay full price for a hotel room. It can save you a lot money, and can be a lot more flexible when it comes to cancellations.
Even the quick turnover of guests can be a good thing. If you get a guest that drives you up the wall, they’re likely not going to be around for more than a few days, and you aren’t going to have to go through the tricky process of evicting them. And, to the social butterflies out there, it can provide a chance to meet some really interesting and diverse people, especially if they’re from overseas.
Airbnb is also good if you want to go travelling, and intend to be away from your property for a while. If you don’t want to pay someone to manage your tenants while you’re away, just plan it so that you don’t have anyone booked, and you’re good to go. As a landlord, you can be so much more flexible when you don’t have a property to be managing for long periods of time.
Airbnb type renting and traditional long-term rentals both serve very different purposes in the market, and are unlikely to ever replace one another. They’re both very different in the service provided, and you need to consider which works best for you.