A lot of people ask us what to expect when starting out on Airbnb.
And if you do this long enough,
you’ll hear the same arguments a lot.
It’s either easy money that falls from the sky
or raging parties that ruin your house.
After hosting on Airbnb for more than five years,
we can report it’s more of the former than the latter.
Still, one of the most common questions we get asked is,
“What are the pros and cons of renting your place on Airbnb?”
Pros
Money
In our experience, a short-term rental in a good location,
furnished and photographed well,
and operated with great customer service can pull in
two-to-three times the revenue of an unfurnished, long-term rental.
So yes, the money can be very good.
If you look at what the hotels in your area are charging,
you can figure out pretty quickly that a well-run Airbnb
surpasses a traditional rental model.
It definitely did for us.
We paid down debt.
We bought a car.
And we put a down payment on our first home.
(And we’ve subsequently used equity from that house to buy two more properties.)
Cultural Experiences
Now, if you’re a really good person
and you care about more than just money,
you might be interested in the cultural exchange aspect.
.
People from around the world use Airbnb,
and if you’re open to it, you could find yourself having a really great experience.
We once hosted a young couple from South Korea.
We didn’t understand each other that well, but we both
enjoyed a few pints of beer and a couple games of ping pong.
Better Upkeep
So, this may sound counter-intuitive,
but running an Airbnb can result in a cleaner house.
If you’re renting on Airbnb often,
then you’re also cleaning often.
And guests will find the weak links in your home’s armor.
A faulty light switch or a hanging cabinet door?
Plan on fixing those soon.
Because of the the speed Airbnb reviews are given
and the weight they hold,
you are motivated to keep your place at its best.
In our experience, a well-run Airbnb can only be done in a clean home.
So whether you’re hosting in your own home
or in an investment,
you are now assured of maintaining that place better than you might otherwise.
Cons
Time and Work
Running a profitable Airbnb isn’t rocket-science,
but it’s also not a walk in the park.
You will work and you will work hard.
I’ve never scrubbed so many toilets as I did that first year.
Laundry, cleaning, stocking, key handoffs,
pre-stay communication, in-stay responses,
calendar management, and the occasional repairs
are all part and parcel of running an Airbnb.
Now, can you outsource these duties?
Yes you can, but we’ve found that to be a good Airbnb host
and business owner, it makes sense to do it yourself first.
The benefit of this being that you know what it’s worth to you
to hire out and you know what your personal expectation is.
Risk
There’s just no way around this one,
but that’s okay.
Inviting numerous guests into your place naturally open you up to some risk.
There are going to be thoughtless guests
who not only came to party and consequently,
leave the remnants of a party-
but there are also well-intentioned guests
that just break something on accident.
But here’s something to know:
Those incidents are so far and few between
that I would not let them deter you from pursuing this model.
Those horror stories you hear on the local news?
They happen, but Airbnb hosts 500,000
stays every night of the year, and one or two of those stays
are bound to turn sour.
You can take some steps to prevent such incidents
and/or protect yourself in the event they happen.
First off, you can actively screen your guests.
Ask them questions.
Find out their intentions.
Secondly, be sure to purchase insurance
tailored to short-term rentals.
(And, no, neither your homeowner’s policy
nor a traditional landlord policy will cover you-
we’ll cover this in a different video.)
Don’t get us wrong, Airbnb is not for everyone.
Inviting guests into your home
requires a certain comfort level.
I’d still encourage skeptics to give it a try,
but if the idea makes you squirm,
then traditional rentals might be the better path.
Without a doubt, the pros far outweighed the cons for us.
Airbnb springboarded us into the world of real estate investing.
It honed our skills at operating a business.
And it changed our financial future for years to come.
We hope you enjoyed this video and if you did
make sure to give us a thumbs up and leave a comment.
For BiggerPockets.com my name is James
& I’m Erin thank you guys for watching
and stay tuned next week to learn
how to find out if your city or hoa allows for short term rentals.
To learn more about short term rentals or connect with us,
follow us on Facebook or reach out to us
by clicking the links in the description of this video.