The rising success of Airbnb, an online marketplace that arranges homestays for guests looking for accommodation, have spurred thousands of homeowners to jump on the bandwagon and capitalize on sharing their properties. These are some of the top pros and cons of Airbnb hosting.
Looking for a place to stay? Hit up the Airbnb app and you’re quickly covered for the night.If you’re a homeowner looking to get paid to rent a room, Airbnb is a prime choice.
This decade-old room-letting website boasts of a solid track record of 34 offices globally and 7 million worldwide listings in more than 220 countries. As of 2019, the company is worth $31 billion and plans to go public by 2020.
Here, lodging selections are attractively diverse and at different price points.
Apart from its regular listings, there are over 2,400 tree houses, 14,000 tiny houses, and 4,900 castles listed on Airbnb.
Whether you’re planning a business trip or heading out for a vacation, the convenience offered by Airbnb is irresistible – and hosts are in on it too.
For several hosts, Airbnb has become a seriously lucrative side hustle.
While earnings vary drastically, some Airbnb hosts can make up to $10,000 a month.
With a painless payment system, freedom over how much to charge, and low fees, it’s easy to see why homeowners choose Airbnb over traditional listings.
But is it really that good for hosts?
Where does the system fail and are there any lackluster features? We’ve scoured the web for Airbnb reviews and compiled all the things to know about being an Airbnb host.
We’ve also put together a comprehensive list of the pros and cons of Airbnb hosting, so you can decide whether the platform is worth your time or if you’re better off with renting the traditional way.
What is Airbnb?
Roommates Joe Gebia and Brian Chesky came up with the rental business idea for Airbnb in 2007. A big design conference was poised to be held in town, and Joe found the lucrative potential of renting out a part of their apartment, complete with a sleeping mat and a breakfast, to the young designers who were planning to visit.
The duo launched a simple website called airbedandbreakfast.com, purchased three air mattresses, and set up guest rooms in their loft. The partners’ first three guests paid $80 each.
Realizing how big the idea could be, Chesky and Gebia sought the help of another roommate, Nathan Blecharcyzk, to help turn the idea into a bigger business.
More than a decade and several rejections from investors later, the company has developed into a multi-million dollar business with a $10 billion valuation in 2014.
Today, Airbnb is located in over 191 countries with several international expansions (even in countries where its legality might be questionable).
With the platform, the three business partners were able to create a niche that caters to various travelers: penny pinchers, high spenders, and everyone in between.
How to Use Airbnb for Hosts
Before knowing the pros and cons of Airbnb hosting, it helps to know how hosts can use the platform to rent out their house, apartment, or a part of their space.
The best Airbnb profile is one that is made with stunning imagery, crystal clear policies, and a fair price tag.
Here’s how to make money with Airbnb:
1. Sign up on the Airbnb page
Apart from filling up basic information, the platform will go into the specifics of the space you’re renting out including what kind of place you’re listing, what areas of your space you’re renting, and how many guests you can accommodate.
2. Add imagery.
After entering your details, the platform encourages you to add imagery to go with your descriptions. Hosts that upload photos are 40% more likely to earn as opposed to those who don’t use professional images.
Depending on your city, you may be able to hire professional photographers via the Airbnb platform itself.
3. Study your local laws.
Cities like Miami Beach, Paris, and New York City have strict policies regarding renting on Airbnb, while Portland, Amsterdam, and London have more lenient requirements. Know your city’s policies and determine if you need to register or obtain a license or permit before listing your property.
4. Set your fee.
A good strategy is to determine your market value by comparing your property with similar listings in your neighborhood. Look closely for properties with the same size, number of bathrooms, bedrooms, and others.
When starting out, we encourage that you slightly lower your price below market value to lure your first few guests. Take into consideration add-on fees such as taxes (in certain cities).
5. Select your guests.
Guests can instantly book your place if you choose the ‘instant book’ feature, but we suggest sizing up your guests before accepting them into your place. Read and review your potential guests’ profiles before approving their stay.
6. Set your cancellation policy.
Airbnb offers three tiers to cancellation policies: flexible, moderate, and strict. Flexible policies allow guests to cancel 24 hours prior to their stay, while strict policies allow cancellations anytime, but only the cleaning fee is refunded.
See Related: Airbnb vs VRBO – What is Better?
Pros and Cons of Airbnb Hosting
Now that you know how to host in Airbnb, it’s time to learn the pros and cons of Airbnb hosting. After reading numerous online reviews and using the platform ourselves, we’ve compiled a list of what we like and what we don’t like about the room-letting app.
The verdict? There seems to be an advantage for every disadvantage (or vice versa, depending on how optimistic you are).
Pros of Airbnb Hosting
If your space is well-furnished, well-photographed, cared for greatly, and in a good location with good customer service, then there’s a good chance you’ll be earning more from Airbnb as opposed to an unfurnished, long-term rental.
With hard work, you can turn to Airbnb as one of your main sources of income to pay off debts or save up for a vacation.
Airbnb allows you to set your own price and adjust it as you see fit during holidays or special seasons. This provides room for strategy – a great way for budding entrepreneurs to make even more money.
2. Cultural Experiences
When searching for pros and cons of Airbnb hosting online, we’ve read lots of reviews about how Airbnb generates more than just extra money for its hosts, but actually builds long-lasting friendships.
If you’re hosting in your own place, Airbnb is a great way to meet people of different cultures from all around the world. If you take the time to listen, you’ll discover that most of them will have interesting stories to tell.
See Related: 14 Best Travel Jobs to Consider
3. Better Upkeep
This isn’t exactly a direct advantage of hosting with Airbnb, but one of the things you’ll enjoy from having your place rented frequently is better maintenance and cleaner space. Guests have a knack of criticizing the place they’ve been to (you know this if you’re a guest too).
Once you’ve heard their points for improvement, you’ll be making that fix before having the next guest over.
A great Airbnb is clean and well-maintained. Whether you’re hosting in an investment property or your own home, you’ll be required to keep your place spotless.
4. Screening Your Guests
Running a hotel means you’ll be accepting complete strangers into your property, but Airbnb allows you to screen your guests prior to their reservation.
Once guests check out in an Airbnb property, hosts will have the chance to review them, their stay, and how they treated their space.
This practice pressures guests into respecting the properties they are in and allows future hosts to make better decisions.
Airbnb offers a great deal of flexibility. You’re not required to host all the time and you can choose which days you want to offer to potential guests. You can even sync your personal calendar with your listing to make sure schedules are aligned.
Airbnb also offers you an affordable way to advertise your property, with a built-in system for handling payment and bookings.
This makes the rental process much easier as opposed to handling everything by yourself.
Cons of Airbnb Hosting
1. Property Damage
Among all the disadvantages of becoming an Airbnb host, this one is the most common. Damage to property is probably the biggest risk for hosts, and while most stays will be damage-free, we have read stories of entire houses being trashed by rowdy partygoers.
Airbnb’s Host Guarantee program offers up to $1 million USD for property damage protection, but it may not be able to cover everything such as jewelry, pets, rare artwork, or cash.
2. Erratic Income
While generating life-sustaining income is possible with Airbnb, earnings may be more erratic as opposed to renting a property to a long-term tenant. There’ll be runs with a lot of bookings, and seasons where reservations are scant.
Hosts may need to relegate Airbnb as a mere side hustle and adjust their expectations accordingly.
See Related: How to Rent Your House Without a Realtor
3. Requires Work
While it’s great that your property will be constantly maintained, the frequent cleanup and repairs may leave hosts exhausted. Unless you can afford to pay someone to do the cleaning for you, you will have to dust, vacuum, and do the laundry for your next guest.
While the Airbnb platform is designed to make life easier for hosts, there is a lot more work involved in handling short-term tenants.
Responding to inquiries can be disruptive and time-consuming, and you may always have to be in your property when checking in guests.
See Related: 15+ Top Passive Income Apps
4. Bad Reviews
Airbnb is an online service and it functions as such – which means that you will probably not be safe from receiving a bad review every now and then. This shouldn’t be an issue when receiving mostly positive reviews, but dealing with customer complaints can be very taxing.
In rare cases, one overwhelmingly bad review can ruin your Airbnb hosting stint, so you need to be very meticulous in providing topnotch service.
5. Less Freedom
If you’re a person who values your personal time and freedom, you may have to rethink listing in Airbnb. Guest check-ins, check-outs, property maintenance, and repairs will often keep you busy, which means less social and travel freedom for you.
You will have to sacrifice a lot of time to keep your Airbnb business going.
If you don’t have a job that offers you the flexibility to clean your property in between stays, then you may be better off going the traditional landlord route.
Unless you find someone who could serve as a dependable co-host, you will have to do everything yourself.