The Pros and Cons of Being an Airbnb Host
My wife and I have been Airbnb hosts since 2015. Currently, we offer a private room in our house with its own bathroom, but we are in the process of building an addition to our house to create a separate space for future guests.
If you are not already familiar with the company, Airbnb is effectively an online broker that facilitates hospitality experiences. They basically enable people seeking to rent short-term lodging to connect with hosts. Airbnb doesn't actually own any property itself.
Hosting on a small scale with Airbnb promises the host an easy way to make a little extra income, on a larger scale there is the potential to make some very large amounts of money. It's estimated that you can earn two or three times the amount that you'd earn just renting out a property long term by doing short-term lets with Airbnb.
However, there are also downsides to hosting, such as dealing with demanding or unhappy guests, cleaning restrooms, and making repairs.
Below are my pros and cons of Airbnb hosting.
Pros of Airbnb Hosting
- The extra money: This is the real motivator for hosts. You can use the extra income to live somewhere that you might not normally be able to afford, or build an addition and finance it with your Airbnb income (like my wife and I are doing). You may even be able to switch to part-time work, or give up other work altogether if your Airbnb income is great enough, and just focus on the short-term rentals.
- The flexibility is great: If you have friends or relatives coming over to stay, you can block off the calendar and save the room or property for them.
- You meet interesting people: We've had guests from all over the world staying with us. Many of them have an interesting tale or two to tell.
- Airbnb insures your property against damage from guests, which gives you a safety net if something does go horribly wrong.
- Unlike a hotel where the guests are usually complete strangers, you can actually read reviews of your guests and find out a bit about them before you let them stay. After a while, you will also get regular guests coming to stay.
- Airbnb effectively gives you a low-cost way of advertising and getting bookings via their website; plus a ready built system for handling the bookings and payment, making the process much easier than doing it independently.
- The short-term rental market is likely to keep growing, according to current trends and the opinions of most experts, the earlier you join the market the quicker you will become established.
- In my experience, most guests don't actually use their rooms much, they mainly want somewhere to sleep and put their stuff. Most guests are on vacation, visiting a friend or relative, attending a job interview, college seminar, or some sort of event. They spend most of their time out and about.
Cons of Airbnb Hosting
- Unlike renting a property to a long-term tenant where you know how much money you've got coming in each month, Airbnb income can be more erratic. You can have a run where you have a lot of bookings and then a dry period, it's never easy to predict. Bookings also tend to be seasonal to some degree.
- Unless you can afford to pay someone else to do it, you will find yourself doing a lot of laundry, vacuuming, dusting, and yes, cleaning up the restroom after guests.
- It can be disruptive and time-consuming. You need to monitor what's happening online so that you can respond to inquiries from guests. You may have to be around in person to check-in guests, or clean up quickly to prepare for the next person's stay.
- Although most people are polite and responsible, you will sometimes encounter some anti-social behavior, or damage to the room. We've had a few guests who have come home drunk, or broken a lampshade, been excessively loud. Nothing major, but it still has to be dealt with.
- If the guests are staying in a room in your home, then you have to be disciplined about keeping all the public areas tidy and clean, and watching your own behavior: there's no wandering around in your underwear, or listening to loud music.
- No matter how hard that you try, my experience is that you will always encounter some unhappy guests who give you less than perfect reviews. It shouldn't be a problem, however, provided that you are doing your best and the reviews that you get are overwhelmingly positive. You can't please everyone, some people maybe aren't a good fit for your property, or even Airbnb.
History and Facts About Airbnb
Airbnb was founded by Brian Chesky and Joe Gebbia who, unable to afford the rent on their San Francisco loft apartment, came up with the idea of putting an air mattress in their living room and turning it into a bed and breakfast, hence the name: "Airbnb" (or Airbedandbreakfast as it was first called).
Initially, the plan was to just make a little extra income, but buoyed by their success and joined by third co-founder, Nathan Blecharczyk, they used the concept to launch an online company in 2008.
In 2009 the company name was shortened to Airbnb.com. Rather than just air beds and shared spaces, the site now included a wider range of properties including entire homes and apartments, as well as private rooms. More exotic spaces such as castles, manors, tree houses, igloos, tipis, and private islands were also listed.
Over the next couple of years, the company continued to expand rapidly and attract investment, including raising $7.2 million in financing from Greylock Partners. In 2011, Airbnb took over Accoleo, a German competitor, and opened its first international Airbnb office in Hamburg. Shortly after it opened another office in London. Other international offices were opened in the period after as the company sought to increase its international market.
In 2015, Airbnb was one of the first U.S. companies to enter the hospitality market in Cuba, after the Obama administration relaxed previous restrictions on U.S. businesses operating in the northern Caribbean country.
Between 2015 to 2016, Airbnb's revenue increased by more than 80% and for the first time in the second half of 2016, the company became profitable.
- Airbnb has more than 4 million lodging listings in 65,000 cities and 191 countries.
- The company has enabled over 260 million check-ins and operates 14 offices globally.
- The most active listings are in London, New York, Paris, Rio de Janeiro, Barcelona, Rome, Los Angeles, Copenhagen, Sydney, and Amsterdam.
- Among the lodgings listed are 1,400 tree houses.
- The busiest ever night for the company was New Year's Eve 2017 when over 3 million people booked a place to stay via Airbnb.
© 2018 Paul Goodman