Many people believe that renting out their property on Airbnb is easy. You advertise the accommodation and get paid for every online booking received. But is it really that simple?
Airbnb is a website that connects landlords renting out space to people seeking short-let and house-sharing accommodation.
In theory, the website is easy-to-use. However, there are many risks you need to know about before renting out a property on Airbnb. Failure to know these risks could land you in legal trouble.
Five risks you need to know about before renting out your property on Airbnb
- Many lenders prohibit short-term lets. Check your lender’s terms and conditions so you do not breach your mortgage contract.
- Know your local housing laws. Some councils require all landlords to register for a ‘selective’ license. This means the property can only be rented to a single-family household, or two unrelated people. In London, it’s a criminal offence to rent out your property as a short-term let for more than 90 days in one year.
- You must pay taxes on your Airbnb rental income. Just because your property is a private home or space, instead of an official hotel, does not mean it’s tax-free. Councils are closely monitoring Airbnb for rogue landlords and tax evaders.
- It could be your fault if your guest is injured. Private homes and spaces are not subjected to fire and gas safety regulation like hotels and guesthouses. But, you could still be at fault if a guest is injured due to your property being unsafe.
- You will have periods of no occupancy. Rental rates for short-lets are higher than long-term lets. Making quick profit blinds people. They forget that many properties remain empty for much longer than expected.
Is it worth renting out your property on Airbnb?
From past experience, I think it’s only worth renting out your property on Airbnb, if you do it yourself – without a property manager – as discussed in my previous post.
A property manager charges a standard management fee, as well as additional fees for cleaning and preparing your property after each guest leaves. The fees will eliminate your profit if the let is only for a few days.
However, despite the risks, if you want to rent your property on Airbnb, go for it. Everyone will have a different experience depending on the type of their property and its location. So, unless you try it for yourself, you’ll never know if it’s a good tactic to increase your rental income.
So, is it a good idea to rent out a property on Airbnb?
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