To AirBnB or not AirBnB, that is the question
May 15, 2019 8:20 PM Subscribe
I've got a small vacant guest house that has primarily been used as a long-term rental. I am trying to figure out if I should just look for another--possibly sub-optimal--long-term tenant or give a stab at the AirBnB route for a while?
My previous tenants were, on the one hand, nice people, but on the other hand, unreliable about paying the rent which has left me feeling quite jaded. I have an ideal tenant in mind (horse person/couple who wants to live on a horse property! wants to trade barn chores/yardwork for a rent discount!) and if I could only find that tenant who is able to pay the rent on a reliable basis, I would much rather have a long-term tenant, even if it is potentially not the financially optimal use of the space. However, after having advertised my rental for the past week in the appropriate places, I've got a lot of hearts for my property on facebook and only 1 actual appointment for someone to come look, and it's definitely not my ideal tenants.
I also live in an rural area with some tourism draw and there's a definite semi-seasonable AirBnB market. I estimate that an additional $1-2,000 investment would furnish the guest house to a minimum standard, and at an occupancy rate of 8-10 nights a month averaged across the year it would exceed the net income from a long-term rental.
I'm interested in both personal and mathematical arguments for continuing to advertise/expanding my net for a long-term rental vs. making the investment to set the place up as a vacation rental. If I hit the AirBnB jackpot and were able to rent it out an average of 50% of the time it would be a definite financial win, even including the extra work of turning over the property every few days.
(obvs: if you're a mefite and are looking for a 2 br rental about an hour outside of DC and summer tourism work opportunities with possible rent discount in exchange for labor, hit me up!)
My previous tenants were, on the one hand, nice people, but on the other hand, unreliable about paying the rent which has left me feeling quite jaded. I have an ideal tenant in mind (horse person/couple who wants to live on a horse property! wants to trade barn chores/yardwork for a rent discount!) and if I could only find that tenant who is able to pay the rent on a reliable basis, I would much rather have a long-term tenant, even if it is potentially not the financially optimal use of the space. However, after having advertised my rental for the past week in the appropriate places, I've got a lot of hearts for my property on facebook and only 1 actual appointment for someone to come look, and it's definitely not my ideal tenants.
I also live in an rural area with some tourism draw and there's a definite semi-seasonable AirBnB market. I estimate that an additional $1-2,000 investment would furnish the guest house to a minimum standard, and at an occupancy rate of 8-10 nights a month averaged across the year it would exceed the net income from a long-term rental.
I'm interested in both personal and mathematical arguments for continuing to advertise/expanding my net for a long-term rental vs. making the investment to set the place up as a vacation rental. If I hit the AirBnB jackpot and were able to rent it out an average of 50% of the time it would be a definite financial win, even including the extra work of turning over the property every few days.
(obvs: if you're a mefite and are looking for a 2 br rental about an hour outside of DC and summer tourism work opportunities with possible rent discount in exchange for labor, hit me up!)
Insurance might be another - my home insurance underwriter expressly forbids AirBnB rentals. Whatever you do, make sure you’re properly covered in case there damage to people or your property.
posted by OneSmartMonkey at 9:11 PM on May 15, 2019 [6 favorites]
posted by OneSmartMonkey at 9:11 PM on May 15, 2019 [6 favorites]
Personal argument: I am a reliable renter (have lived in my current place for 6 years, never late with rent) in a tourist-heavy area with lots of AirBnB rentals and it makes me anxious and jumpy because I worry my landlords are going to decide to do what you're considering. AirBnBs degrade the sense of community and encourage short-term thinking, while driving long-term residents away, while simultaneously undercutting hotels and putting unionized employees out of work. There are reasons many cities are banning or restricting short-term rentals. It's not an ethical use of an independent living space.
posted by lazuli at 9:19 PM on May 15, 2019 [59 favorites]
posted by lazuli at 9:19 PM on May 15, 2019 [59 favorites]
My parents are currently doing AirBnB with a property they own, which is right next door to their home, so similar to you. It's working very well for them. Figuring out a reliable cleaning service was one of the hurdles, since during their high season they're frequently doing same-day turnarounds from one guest to the next. They've only had one bad renter experience, but dealt with it in an okay fashion via AirBnB. Their philosophy has been to furnish the place very nicely, stock it with fairly luxurious extras, and charge more on the rent.
posted by BlahLaLa at 10:15 PM on May 15, 2019 [1 favorite]
posted by BlahLaLa at 10:15 PM on May 15, 2019 [1 favorite]
However, after having advertised my rental for the past week in the appropriate places, I've got a lot of hearts for my property on facebook and only 1 actual appointment for someone to come look, and it's definitely not my ideal tenants.
That doesn't seem like a long time, for a pretty specific request. How long did you think it would take to find a tenant? Is your area a fast-moving rental market generally?
posted by the agents of KAOS at 10:37 PM on May 15, 2019 [4 favorites]
That doesn't seem like a long time, for a pretty specific request. How long did you think it would take to find a tenant? Is your area a fast-moving rental market generally?
posted by the agents of KAOS at 10:37 PM on May 15, 2019 [4 favorites]
Do the math and determine how much you can charge a night, how many nights you think you can rent, versus your monthly rental amount. Then consider the extra work.
I have heard that AirBnB can make a LOT more money. On the other hand, I have heard that it's a LOT more work. I went through my own calculations and decided to stick with renting, but I still consider giving it a try.
I'm not sure what the process is, but I think someone from AirBnB comes to visit and scopes out your place. Just be aware there may be a process, and that may require some lead time.
posted by xammerboy at 12:06 AM on May 16, 2019 [1 favorite]
I have heard that AirBnB can make a LOT more money. On the other hand, I have heard that it's a LOT more work. I went through my own calculations and decided to stick with renting, but I still consider giving it a try.
I'm not sure what the process is, but I think someone from AirBnB comes to visit and scopes out your place. Just be aware there may be a process, and that may require some lead time.
posted by xammerboy at 12:06 AM on May 16, 2019 [1 favorite]
AirBnB values a quick response time and a 100% response rate from hosts. In practice this can mean having your phone always on you.
You might also have to deal with negotiating (which sometimes begins as complaining such as “why is your cleaning fee so high?”).
You might have to deal with scams. I don’t know exactly what he scam is but we have had some folks try to book very long stays starting immediately who have no other review; they just don’t seem legit.
AirBnB prioritizes hosts who make things easiest for guests (instant booking, no cancellation fees, etc.). One way to think about this is that the majority of the risk is shifted to the host. In rental agreements, I personally feel that traditionally risk is distributed more equally.
In spite of all this, we continue to AirBnB. We are breaking even. We couldn’t manage a long term tenant without a management property and we’d lose money on that deal.
posted by CMcG at 2:55 AM on May 16, 2019 [1 favorite]
You might also have to deal with negotiating (which sometimes begins as complaining such as “why is your cleaning fee so high?”).
You might have to deal with scams. I don’t know exactly what he scam is but we have had some folks try to book very long stays starting immediately who have no other review; they just don’t seem legit.
AirBnB prioritizes hosts who make things easiest for guests (instant booking, no cancellation fees, etc.). One way to think about this is that the majority of the risk is shifted to the host. In rental agreements, I personally feel that traditionally risk is distributed more equally.
In spite of all this, we continue to AirBnB. We are breaking even. We couldn’t manage a long term tenant without a management property and we’d lose money on that deal.
posted by CMcG at 2:55 AM on May 16, 2019 [1 favorite]
Also it is a part time job that my partner and I split between us. He handles the customer service and I handle the vendor management (cleaning crew, lawn care) and physical care of the house. If you factor in our time, I’m not sure we *are* breaking even.
posted by CMcG at 2:58 AM on May 16, 2019
posted by CMcG at 2:58 AM on May 16, 2019
A couple I'm good friends with manages three AirBnB properties as their "day job". Financially they've done very well with it.
But they are always dealing with stuff - clients who call them because the toilet broke or the heat's not on or they can't find the towels or there's a raccoon in the basement, clients who trash the place and they have to clean up, clients who accidentally leave a window open and it rains, etc. They invited me over once to watch the London Olympics opening ceremony, only while I was heading over they got a sudden call from one of their renters and we spent nearly the whole ceremony with me being the only one watching because one was on the phone with the plumber by their property trying to make an appointment and the other was on the phone with the renters trying to walk them through turning off the water to the toilet so things didn't flood.
You may be able to find a renter sooner, but it's going to be much more constant work than a long-term renter may be. You've only been on the market for a week, so it may be worth waiting longer for the long-term renter you want.
posted by EmpressCallipygos at 4:19 AM on May 16, 2019 [2 favorites]
But they are always dealing with stuff - clients who call them because the toilet broke or the heat's not on or they can't find the towels or there's a raccoon in the basement, clients who trash the place and they have to clean up, clients who accidentally leave a window open and it rains, etc. They invited me over once to watch the London Olympics opening ceremony, only while I was heading over they got a sudden call from one of their renters and we spent nearly the whole ceremony with me being the only one watching because one was on the phone with the plumber by their property trying to make an appointment and the other was on the phone with the renters trying to walk them through turning off the water to the toilet so things didn't flood.
You may be able to find a renter sooner, but it's going to be much more constant work than a long-term renter may be. You've only been on the market for a week, so it may be worth waiting longer for the long-term renter you want.
posted by EmpressCallipygos at 4:19 AM on May 16, 2019 [2 favorites]
I can’t tell you what to do, but I can give you some reality and potential scenarios to consider. I will not tell you how strongly I feel about Airbnb and it’s effects in my neighborhood (very doesn’t even begin to cover it) because that has already been covered more reasonably than I could manage.
A week is a very short time for vacancy in a long term rental. Many owners budget a full month of vacancy for each year. Others budget two full months. If you offer riding lessons there may be an opportunity to barter fees with a realtor who will show the home. Especially if they realtor has a kid and your insurance is good. Have a very clear contract written for this but it could save you cash, more so if it’s a well behaved kid joining group lessons.
Check the law in your area regarding labor in exchange for rent, as well as the laws around Airbnb, if there are none specific to Airbnb search for laws about short term rentals and hotels. You mention semi seasonal tourism. The math on going an entire month without a booking is something you need to do. The math on only being booked three nights a month for six solid months is also important. Airbnb is a when it rains it pours type of job. Also do the math in evicting a short term tenant who decides they aren’t leaving. Not common, but not unheard of. Once they’re in your space (whether it’s a hotel or a home) different jurisdictions have different requirements for getting people OUT. These steps might be different with a hotel than with a long term tenant. In many places tenant law favors the tenant because of the balance of power (money, resources) already being in the landlords favor. In other places the law is skewed toward the landlord instead.
If you’re going to be successful at Airbnb you probably need an amazing photographer to sell the living space, furnishings that are sturdy yet pretty but not too feminine. The soft goods ALL need to be machine washable and duplicated for fast turnover. On a working horse farm, any carpets will need to be replaced with tile because vacationers will step in horse shit and track it through the home. Any noticeable drafts will have to be addressed because people will complain instead of just getting a door snake, and now you’re paying for all the electric out of your listing income anyway.
If there’s a kitchen you get to keep it stocked with utensils because people have expectations about kitchens. People WILL (eventually) lift your wine key or half your forks. It will be a last minute scramble to replace something important like a broken pot or a broken oven.
Someone will complain that the curtains are too sheer and someone else will complain that the room is too dark. Someone will get locked out so you need a hideakey that you can direct them to when they call you at 1:00am. The door needs to be secure and the locks need to be very easy to operate even in the dark.
Oh. And ask yourself what you’ll do when drunk guy decides he’s going to ride one of your horses in the middle of the night. Does he get thrown off the horse? Does he sue you? Does he injure and animal? Does he pay the vet bill if he does? While these are also questions for long term tenants, they’re different with a rotating cast of strangers. If you board horses for other people definitely consider what happens if a guest injured a client’s animal.
Your insurance situation was important with a long term rental. It’s critical with short term rentals. Some people do exceptionally stupid things on vacation and often don’t want any accountability for those things.
posted by bilabial at 6:00 AM on May 16, 2019 [8 favorites]
A week is a very short time for vacancy in a long term rental. Many owners budget a full month of vacancy for each year. Others budget two full months. If you offer riding lessons there may be an opportunity to barter fees with a realtor who will show the home. Especially if they realtor has a kid and your insurance is good. Have a very clear contract written for this but it could save you cash, more so if it’s a well behaved kid joining group lessons.
Check the law in your area regarding labor in exchange for rent, as well as the laws around Airbnb, if there are none specific to Airbnb search for laws about short term rentals and hotels. You mention semi seasonal tourism. The math on going an entire month without a booking is something you need to do. The math on only being booked three nights a month for six solid months is also important. Airbnb is a when it rains it pours type of job. Also do the math in evicting a short term tenant who decides they aren’t leaving. Not common, but not unheard of. Once they’re in your space (whether it’s a hotel or a home) different jurisdictions have different requirements for getting people OUT. These steps might be different with a hotel than with a long term tenant. In many places tenant law favors the tenant because of the balance of power (money, resources) already being in the landlords favor. In other places the law is skewed toward the landlord instead.
If you’re going to be successful at Airbnb you probably need an amazing photographer to sell the living space, furnishings that are sturdy yet pretty but not too feminine. The soft goods ALL need to be machine washable and duplicated for fast turnover. On a working horse farm, any carpets will need to be replaced with tile because vacationers will step in horse shit and track it through the home. Any noticeable drafts will have to be addressed because people will complain instead of just getting a door snake, and now you’re paying for all the electric out of your listing income anyway.
If there’s a kitchen you get to keep it stocked with utensils because people have expectations about kitchens. People WILL (eventually) lift your wine key or half your forks. It will be a last minute scramble to replace something important like a broken pot or a broken oven.
Someone will complain that the curtains are too sheer and someone else will complain that the room is too dark. Someone will get locked out so you need a hideakey that you can direct them to when they call you at 1:00am. The door needs to be secure and the locks need to be very easy to operate even in the dark.
Oh. And ask yourself what you’ll do when drunk guy decides he’s going to ride one of your horses in the middle of the night. Does he get thrown off the horse? Does he sue you? Does he injure and animal? Does he pay the vet bill if he does? While these are also questions for long term tenants, they’re different with a rotating cast of strangers. If you board horses for other people definitely consider what happens if a guest injured a client’s animal.
Your insurance situation was important with a long term rental. It’s critical with short term rentals. Some people do exceptionally stupid things on vacation and often don’t want any accountability for those things.
posted by bilabial at 6:00 AM on May 16, 2019 [8 favorites]
Is there a housing shortage in your area? Are public servants like teachers, cops, firefighters having a hard time finding year-round rentals? Are rental units like yours a rarity or are there multiple local places for rent?
If there are plenty of places for rent, and your community and your insurance are ok with it then give it a try.
Be careful if you are really dependent on this income for your mortgage or other expenses. A year-round tenant with good references will be a lot easier to deal with than airbnb.
posted by mareli at 6:49 AM on May 16, 2019 [3 favorites]
If there are plenty of places for rent, and your community and your insurance are ok with it then give it a try.
Be careful if you are really dependent on this income for your mortgage or other expenses. A year-round tenant with good references will be a lot easier to deal with than airbnb.
posted by mareli at 6:49 AM on May 16, 2019 [3 favorites]
My best friend runs an airbnb out of the inlaw apartment downstairs from her and constantly texts me for advice because literally every week is a new conundrum. Like the time one of the guests heavily bled the sheets and stained the mattress. Or the time one of them did so many loads of laundry (like months and months worth of laundry during a two night stay) and broke her machine. Or the people who complained the air conditioner wasn't working well enough and demanded she go out in a massive storm to go procure a large fan. Or the guy who smoked so much weed and they could not get the stank out of the couch. Or the guest who kept sneaking people into his single occupancy room. The older couple who needed help with every single thing (using the microwave, connecting to wifi, how does the TV work, how do you use a coffeemaker) and kept ringing her doorbell incessantly. The people who stole her throw pillows. The people who thoroughly soiled her replacement throw pillows. Someone took her curtains down hook by hook and left them sopping wet in the laundry.
This doesn't include the tons of people who just don't read her listing and then complain about the lack of something she says quite clearly up front in the description: "This place has no full kitchen, only a microwave, minifridge and hot plate." "I WAS VERY DISAPPOINTED THERE WAS NO FULL KITCHEN. ZERO STARS." "We are a fifteen minute train ride from downtown." "WHY IS THIS PLACE NOT DOWNTOWN. ZERO STARS." "There is only street parking!" "WHY DOES THIS PLACE NOT HAVE A GARAGE. ZERO STARS."
This also doesn't include the painful wordsmithing of reviews so you don't sound like an angry bitter frustrated asshole landlord because you still want to look like you're truly welcoming new business as well as super helpful and fun and customer oriented. From hearing my friend's constant stress updates, managing an airbnb truly looks exhausting and like it requires very different set of tolerances for frequent aggravation.
posted by sestaaak at 6:53 AM on May 16, 2019 [10 favorites]
This doesn't include the tons of people who just don't read her listing and then complain about the lack of something she says quite clearly up front in the description: "This place has no full kitchen, only a microwave, minifridge and hot plate." "I WAS VERY DISAPPOINTED THERE WAS NO FULL KITCHEN. ZERO STARS." "We are a fifteen minute train ride from downtown." "WHY IS THIS PLACE NOT DOWNTOWN. ZERO STARS." "There is only street parking!" "WHY DOES THIS PLACE NOT HAVE A GARAGE. ZERO STARS."
This also doesn't include the painful wordsmithing of reviews so you don't sound like an angry bitter frustrated asshole landlord because you still want to look like you're truly welcoming new business as well as super helpful and fun and customer oriented. From hearing my friend's constant stress updates, managing an airbnb truly looks exhausting and like it requires very different set of tolerances for frequent aggravation.
posted by sestaaak at 6:53 AM on May 16, 2019 [10 favorites]
I think if you're looking for a long-term tenant with a break on rent to do chores, your life is probably the exact opposite in the time/money balancing act from what works for AirBnB.
That said, I know a very busy family who have successfully turned a fairly rural home into an AirBnB. Financially it can make a lot of sense, it's just a lot of work.
posted by warriorqueen at 7:31 AM on May 16, 2019 [2 favorites]
That said, I know a very busy family who have successfully turned a fairly rural home into an AirBnB. Financially it can make a lot of sense, it's just a lot of work.
posted by warriorqueen at 7:31 AM on May 16, 2019 [2 favorites]
You're going to need to wait a while to find a long-term tenant at this somewhat awkward time in the rental season. Don't most leases end at the end of the year or the end of the summer? It took me a few weeks to find a suitable tenant for a place in a very hot area of Philadelphia a few years ago around this time. I think you're jumping the gun with the airbnb thing, personally.
posted by shaademaan at 7:37 AM on May 16, 2019
posted by shaademaan at 7:37 AM on May 16, 2019
Airbnb is going to require a lot more effort on your part and would probably generate more income. It removes a home from the rental market.
If you want to rent, put a lot of effort into finding tenants. There are lots of horse barns; post flyers. If there's an equine program at a college, flyers. Find as many horse forums as you reasonably can that allow posting a rental. Could someone who owns or wants to own a horse bring their horse?
Get references from potential tenants and check them. With a new tenant, be really fierce about late rent being unacceptable. I was a small-time landlord, and included this in interviews and new tenant intro. It helped some.
posted by theora55 at 7:40 AM on May 16, 2019 [1 favorite]
If you want to rent, put a lot of effort into finding tenants. There are lots of horse barns; post flyers. If there's an equine program at a college, flyers. Find as many horse forums as you reasonably can that allow posting a rental. Could someone who owns or wants to own a horse bring their horse?
Get references from potential tenants and check them. With a new tenant, be really fierce about late rent being unacceptable. I was a small-time landlord, and included this in interviews and new tenant intro. It helped some.
posted by theora55 at 7:40 AM on May 16, 2019 [1 favorite]
Another thought -
You know how hard you're working now to find a tenant for a years' long stay? Imagine having to put that much work into finding a new tenant every week. At least with a renter once they're in you can stop. With AirBnB, you'll be busting your butt marketing the space to get someone to come in, and then you'll get someone and they'll be there for a a week and then they leave and you'll have to do that all over again.
posted by EmpressCallipygos at 7:57 AM on May 16, 2019 [4 favorites]
You know how hard you're working now to find a tenant for a years' long stay? Imagine having to put that much work into finding a new tenant every week. At least with a renter once they're in you can stop. With AirBnB, you'll be busting your butt marketing the space to get someone to come in, and then you'll get someone and they'll be there for a a week and then they leave and you'll have to do that all over again.
posted by EmpressCallipygos at 7:57 AM on May 16, 2019 [4 favorites]
If I hit the AirBnB jackpot and were able to rent it out an average of 50% of the time it would be a definite financial win, even including the extra work of turning over the property every few days.
The property will turn over every few days but your extra work will be constant. Think of what you expect in service when you’re a hotel guest versus when you’ve been a tenant. As a tenant my apartment once had a mouse and the landlord and I worked together to fix the problem. When an Airbnb I rented turned out to have a mouse living in it I left immediately and asked for my money back.
posted by sallybrown at 8:25 AM on May 16, 2019 [5 favorites]
The property will turn over every few days but your extra work will be constant. Think of what you expect in service when you’re a hotel guest versus when you’ve been a tenant. As a tenant my apartment once had a mouse and the landlord and I worked together to fix the problem. When an Airbnb I rented turned out to have a mouse living in it I left immediately and asked for my money back.
posted by sallybrown at 8:25 AM on May 16, 2019 [5 favorites]
Where are you advertising? If you're ready to give up after one week, being a landlord may not be for you. I think you should probably expect that it'll take longer to find your ideal long-term tenant, but it'll be worth it to not have to put up with the constant turnover and work associated with an AirBnB. I have never run an AirBnB, but I've stayed in a few, and it seems like constant work to get units ready and communicate with tenants, etc.
I still think Craigslist remains one of the best tools to find tenants. But apartments.com may work (I've used it as a renter) and I think Facebook has become a popular avenue. I'm pretty sure it's free to list your place on all of those.
posted by AppleTurnover at 10:44 AM on May 16, 2019
I still think Craigslist remains one of the best tools to find tenants. But apartments.com may work (I've used it as a renter) and I think Facebook has become a popular avenue. I'm pretty sure it's free to list your place on all of those.
posted by AppleTurnover at 10:44 AM on May 16, 2019
I've got friends who do the AirBnB thing, and it seems like it involves a lot of customer service. Besides all the cleaning and maintenance work, AirBnB upgrades or downgrades you in the search results based on factors like how fast you answer messages from potential renters (expectation: 90% within 24 hours), your review rating (expectation: 4.8 stars or better), and whether you ever have cancellations (expectation: none). It definitely seems like something that requires constant attention, even if you're only renting a week or two each month. It's your call whether that's something you feel comfortable with.
posted by ourobouros at 4:26 PM on May 16, 2019
posted by ourobouros at 4:26 PM on May 16, 2019
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