Do you rent a home out as an Air B&B?
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Pandora (
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April 26th, 2022
If you do what are the pros and cons? My sister-in-law wants to rent out my in-laws home as an Air B&B. She is currently renting the home but her kids are grown and gone and she wants to move somewhere smaller. Currently she pays for my in-laws rented apartment in place of her paying rent. She believes it will generate enough revenue to pay her rent and her parents rent. She needs my husbands and her fathers approval for this. It all sounds great but I feel there can be more that would make it worse. For instance hidden business taxes or issues with zoning or something.
She paints a pretty picture but I want to know what would be the pit falls other than someone may not rent for an entire month or months and also property damage or people doing something illegal on the property.
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16 Answers
You usually pay rent to stay at a Air B&B but if the owner wants to rent it out for free then it can be free.
You should get a real estate lawyer involved from the get go !
@KRD, I know how that works. My S-I-L wants to make an Air B&B business. I think it is risky and may cost more down the road.
Who is going to pay for any repairs IF the house is damaged by one of the Air B&B renters??? Not ALL people staying there will leave the place neat & ready for the next group. IF she’s lucky & gets nothing but good people staying there, she might make a decent profit; however, the chances of the perfect guests EVERY time is zero to none!!! As @Tropical_Willie pointed out, get a lawyer involved to make sure that you & yours are protected!!!
I know that around here, they are tightening up the local county rules about using your house as a short term rental – a bunch of licensing to do, various inspections, the works. It isn’t as easy as it used to be, and it’s getting harder.
For my two cents, the risk isn’t worth the reward for short term people. If you want to rent a place out, go through the work and do 6–12 month leases.
Who will do the laundry and make the beds? Who will make breakfast? She’d be better off staying there in a semi-attached room so she can watch over the place and do the cleaning up. If she can’t handle that, then she should give up on the idea.
There was a story on the news the other day (just a few days ago) about an AirBnB where the renters had a party and over 200 people showed up and shots were fired. I don’t remember if anybody died but that’s a definite possibility, that the renters use it to have a party. Yes, it’s against the rules and yes, the renters can be permanently banned from ever renting through the platform again, but in the meantime, the homeowner is left with the mess and the liability.
@jca2 Wow, I looked up shootings at Air B&b and it happened in Houston Texas, and in Sacramento California. Both involving parties. The Houston one left a lot of neighborhood cars shot up. That’s a lawsuit that I can see ending up on the owners.
Oh and another in Pittsburgh this month that left 2 kids dead and 9 injured and the Air B&B is suing the host, which I think it means the person who rented out the home.
@jca2 No I found they are looking to sue the person who actually rented the place and broke their rules of no party. The more I look the more stories I find. I think this is a good reason not to go through with it.
I rent out both of my homes from time to time. One is on the beach and one is in the mountains. They each draw different types of guests at different times of the year.
None of the space is shared with mine with exception to access to the pool.
Pros: Additional Income, Positive use of space that I would not use, providing a resource to the local community, Returning customers, Pride in sharing the homes you have, Learning the hospitality industry, some good conversations, meeting some interesting people.
Cons: Tax impact, Community Zoning issues, Umbrella Insurance Policy to cover risk, Additional Maintenance break/fix, Having to turn it over between guests, Hiring someone else to turn it over if I am not around, Being available to answer guests needs, Not having access to spaces in my home that I may need to, Not knowing who is in your house, vetting out long term renters, In forming the guests when they don’t respect the rules, Having to deal with stupid guest damages/issues.
My biggest anxiety is “who am I renting to”. Long Term guest are gold. They have minimal turnover and needs. My Berkshires property is typically long term rented for July and August to a musician from the BSO which plays Tanglewood 10 minutes from the property. Visiting Nurses are also about a 3 month stay there as it is 15 minutes from a Medical Center. The beach property is a lot of work turnover , but is always in demand from Memorial day to Labor Day.
AirBnb/VRBO are the least desired by me due to the constant flipping and having little control over who you make it available to.
The AirBNB and VRBO platforms are great, but they take a chunk of your change. Put in a Security Deposit that is refundable if no damage and pass a cleaning fee on to the guest. Typically $50 cleaning per stay for short stays and $100 for long term.
Initial investment may have been about $5000. Costs run about 200–300 per year for incidentals and additional utilities. I net about $25000 annually.
The Cons list does seem longer than the Pros list. You truly want to do this and keep your mind in the game and truly manage it to be successful.
Just fielded a request for 4 days around the 4th of July and will net $900
@Forever_Free Is the 25000 net for both properties and after damage and cleaning were paid for? Also after taxes and all other expenses?
@Pandora The $25K is net for both properties after monies for all expenses like upkeep, utilities, taxes. The beach property makes about the same money during 3 summer months while the mountain property is used about 9 months of the year.
I have bumped my rates up this year as the demand is high and the market is handling the 25% increase in nightly/monthly fee.
There are a several weeks on each property that I block out for friends or family visiting and do not charge them for the space. I like having that space for family and friends first over the pure money aspect.
I have a close friend who rents out 4 summer beach cottages and an off-the-grid cabin in the woods. I help do the maintenance and repairs.
Originally they were purchased as family get-aways, but it became obvious that they were almost always empty while neighboring places were constantly rented out.
I don’t know the annual net, but he says it’s positive. Basically they have second homes that are not a drain and in fact are appreciating in value.
He has a management company who deals with the guests, the calendar, the cleaners, minor repairs, AirBnB, marketing, etc. They take up to 25% of the gross. But they are total heroes. They are wonderful, a lucky find.
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