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Is It Worthy Buying to Rent on Airbnb?

Written by Posted On Wednesday, 04 November 2015 11:23

Airbnb is a company that has sincerely disrupted not only the hospitality market but the entire housing market, too.

It began as a way for the founders to make extra cash and take advantage of the perpetual shortage of hotel rooms in greater San Francisco. But it quickly exploded into one of the most disruptive startups that exists today.

Airbnb is no longer just for people looking to meet new people or help pay their rent. Airbnb can be a valuable business if you play your cards right.

If you are looking to get into the real estate market, it would seem that there is no better place to start than to buy a property to rent out on Airbnb. It seems to make economic sense to rent out your property for $100 per night rather than $100 per week. You can not only pay off the mortgage but you can be on your way to financial freedom if you are successful enough.

Airbnb is a great way to make money on property that you already own. But it may not be worth buying just to rent on Airbnb.

Depending on Airbnb for your income property is a big risk in some markets. Because Airbnb is a relatively new concept, many local and state governments are not yet sure how it will be regulated. In some market’s Airbnb’s legal status is constantly up in the air. While it is on the side of law in some cities, some big markets, like New York, have politicians and activists working to shut it down.

Depending on Airbnb in your market, it could be devastating if legislation started to restrict the company’s operations in the area. For example, some markets are considering enacting legislation to prevent properties from being rented on Airbnb for more than 90 days out of the year.

Also, dealing with an Airbnb requires more availability than a long term renter will. In many cases, you will need to have someone on call to deal with customer enquiries and letting people into the building. Whether you do it yourself or find a property manager, it can take more work than a long term tenant.

You will also need to spend a considerable amount of time or money cleaning the property. If you have new people in and out every few days, you will need to clean the flat just as frequently. In some cases, this will be a small job. But in other cases, you might find that there is a lot to clean up. Some property owners have found that their apartments have been trashed by their esteemed guests.

In addition to cleaning, you will deal with the task of providing fresh linens for the apartment regularly. Also, if you live in an area with weak cell phone reception, you might want to invest in a Wilson Pro 70 Plus signal amplifier. selectMany guests expect Airbnb to operate somewhere between a homestay and a hotel. While they don’t expect all the amenities a four star hotel might offer, they do not want to be doing the chores either.

Finally, there is a lot of competition on Airbnb. While the housing market is also competitive, this works to the landlords benefit because in many markets, there are more renters than there are houses. This drives prices up and makes it easier to charge more for a property that you didn’t pay that much for.

 

The opposite is true with Airbnb. The more options that travelers have to choose from, the pickier they can be when they are booking online. They will also have the option of reading reviews and checking out your profile to see if you offer the kind of place that they would like to stay. Essentially, you’ll have to do a lot more selling a lot more often if you want to succeed with Airbnb.

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Alex Cho

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