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.
1. Your property will get cleaned multiple times per week instead of never. Airbnb guests expect spotless accommodation so your property is thoroughly cleaned after every stay. There will be no nasty surprises that can happen with long term rentals.
2. Airbnb guests are usually a pleasure to deal with, especially when compared to long-term tenants. They can be vetted through checking their review status and you can give rules that stipulate your expectations or they lose their bond! Airbnb guests tend to be very grateful and respectful towards your property.
3. You'll earn more from your investment
When we first started out, we converted our own property from a long-term rental, where we were making $600 per week, to a short-term rental, where we are now earning up to $1,000 per night in the high season. Return is obviously highly dependent on the area, but usually you will find that letting your property on the short-term rental market will drastically improve your return-on investment)
4. You can make decisions on hosting guests based on their previous stays at other Airbnb's.
Hosts are able to review their guests to give honest feedback on their suitability as a visitor to your home. You can use this information to make sound decisions on whether you feel comfortable hosting certain guests or if you would prefer to decline their booking.
5. More personal 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. Renting out your property as a short term rental requires you to have much more interaction with the Airbnb guests than you would if you rented your property long term. Communication and customer service is key to successful stays and positive reviews which are currency for a full calendar. You'll have daily check ins, and must respond quickly when issues arise.
6. 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. You can provide house rules to protect your house and guests must abide by these rules to ensure they can stay at your house and will retain their bond money.
7. The short term rental market can be competitive
It is all about supply and demand. If there are more properties than demand for your property, your potential income will be stunted. It is imperative that you have the right strategies in place to maximise your return.
If you're looking to convert your long-term rental into an Airbnb - 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 get in touch with us and we can guide you to get set up so your listing ends up on page one!
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