Earning extra income from your property may be an attractive proposition but there are other factors to consider too.
There’s a lot more to rent out rooms in your home than simply changing the odd set of sheets. Allowing paying guests into your home may have advantages, but there can be downsides, particularly if the host has unrealistic expectations or doesn’t really enjoy having his private space invaded by strangers.
Airbnb has revolutionised the hospitality industry by offering affordable accommodation to travellers while boosting the homeowner’s income.
However, being an Airbnb host isn’t for everyone and various things need to be taken into consideration before you start renting out rooms.
- Are you happy allowing strangers into your home?
This might not be too much of a problem if you’re renting out an entire home, but the picture will change completely if you are renting out a room in a home in which you live. Ask yourself how comfortable you will be sleeping under the same roof with strangers in your home?
- Do you have the right personality?
While you don’t have to become best friends with all your guests, you do have to be friendly and accommodating. Some guests will be more demanding than others, which could cause friction if you’re not the most patient of souls.
- Can you treat it like a business?
People who pay to stay in one of your rooms will expect a certain standard. The room will need to be thoroughly cleaned after each guest departs. Running a successful Airbnb listing is harder than it looks and the task will undoubtedly require a great deal of time and effort when you first start.
- Is your pricing right?
One of the biggest benefits for those renting via the Airbnb platform is affordability. There’s a lot of competition out there and successful hosts are going to have to price their rooms competitively if they want a share of the pie. Unfortunately, this means hosts have to stay abreast of the competition and adjust their pricing when necessary. In the same vein, demand drives prices up and hosts should keep an eye on upcoming events in order to maximise profits.
- Are you allowed to sublet?
Those who don’t own the property should get their home owner’s permission before they list a room to rent. While most rental agreements contain a clause discussing if the tenant may or may not sublet the premises, some are silent on the point. It’s highly recommended that you double check with your homeowner to ensure he’s happy to allow you to sublet on an Airbnb basis.
- Does your Joint Management Body (JMB) allow Airbnb letting?
Some JMB specifically bars homeowners from renting out properties in the short term. Read the rules and chat to the JMB before attempting to rent out the home.
- How will your neighbours react?
Do yourself a favour and chat with your neighbours before you start renting out rooms if you think there is any risk of them being disturbed by noisy guests.
- Are you insured?
Ensure you have the correct insurance policies in place before you start renting out property via the Airbnb route. Talk to your broker or utilise Airbnb Liability insurance.
- Are you aware of the taxes?
You could be liable for tax on your earnings from Airbnb. Inform the tax man that you are earning additional income.
The Airbnb and similar short-term rental models are a great way to earn extra cash. The stats indicate that it’s a very successful model, with Airbnb reporting in January this year that there are many times when more than 1-million guests are staying in Airbnb listings around the world. On New Year’s Eve last year, almost two million people booked into Airbnb accommodation. The success of your own personal operation will largely depend on you, the facilities on offer, the amount you charge for the privilege of staying in your home and where the property is situated.
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