Let’s admit it: AirBnB changed the way we search and book accommodations. For leisure travelers and travelers on a budget, AirBnB has become an easier and more convenient way of finding a place to stay during vacations.
- And that’s not all. If it changed the way we book accommodations, it surely changed the way property owners run their business. If you can rent out your property for a short period of time more frequently then you’ll make more money, right? Not exactly. Here are 4 reasons why AirBnB may not be the best option for your property.
- It relies on tourism. You have a beachfront vacation property that you want to rent out short term. Beach + tourists may seem like the perfect combination for you but you have to consider the tourism in the area. Remember that tourism is directly affected by the economy’s comings and goings. And when the economy is in bad shape, tourism is badly hurt as well. Natural disasters like earthquakes and tsunamis can AND will affect tourism, and when that happens you’re left with a damaged property and no potential customers until the area is rehabilitated.
- It increases landlord competition. Come to think of it. AirBnB makes it easy for everyone to be landlords. It’s good in the sense that renting out properties has become accessible BUT that makes the competition really big. And when you have plenty of competition it becomes a contest of who charges the lowest. That’s definitely bad for your business in the long run.
- High cost on cleanup and repairs. When you’re renting out your property to someone who will stay for a few days or weeks, chances of them caring for your property the same way a long term tenant would is very slim. And because of that, the chances of you having to spend more on cleaning and repair is higher.
Remember, a person who intends to stay for a long period of time will take the time to clean up the property and care more for it because they would consider it home.
- It provides inconsistent cash flow. Short term rentals like AirBnB can be a gem for property owners in favorite vacation spots but it’s not the same for other property owners. Because you have tenants staying only for a couple of weeks or days, you’re left with just 10-30% of the year booked and very little profit.
If you own a vacation home in the Hamptons or Miami, AirBnB is a good choice for you. But if you’re looking for long term, consistent and stable income, annual rentals may be your best plan.