Tempted to try Airbnb on Your Investment Property? Read This First!
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Baxton.me
29 January 2018

Tempted to try Airbnb on Your Investment Property? Read This First!

Getting extra income from your investment property through Airbnb is tempting, and we’re ready to admit that there are advantages. However, the disadvantages are easy to overlook. We look at the pros and cons of Airbnb hosting from a property manager’s perspective.

The advantages of Airbnb are pretty obvious. The site markets your property to holidaymakers and business travellers as a short-term rental property. Because it isn’t long-term accommodation, you’re competing with hotel prices rather than rental prices, so you can charge more. So far, so good. But what are the drawbacks?

Dealing with Damages

Most Airbnb hosts never experience anything particularly horrible, but there have been instances in which the property owner ended up with costly damages or a huge mess to clean up. More frequently, however, its just a matter of little accidents that result in things like stained upholstery and carpets or minor breakages.

Since you have to keep your place in tip-top condition or risk bad reviews, you’ll need to attend to damages and replace items whenever this happens. How much will it cost? It would be impossible to say until it actually happens.

You Need Someone on Site or Nearby to Manage it

Airbnb is high-maintenance in other ways too. Preparing the house so that everything’s perfect when guests arrive takes time. Someone needs to be there to hand over and receive keys, and someone needs to spend time online vetting potential guests and discussing the deal with them.

If you’re out of town, you’ll need to trust someone else to do all this work for you, and you will have to pay them for their time and effort. That means that the returns on your Airbnb will be lower than they may seem when you just look at the fee you’re charging for a few nights’ stay.

There Will be an Off-Season

It would be hard to keep your Airbnb property at full occupancy all the time. There will be times of the year when you have fewer guests or can’t charge as much as you would in the peak holiday season. That means that your income will vary too. You won’t be able to make accurate predictions until you’ve been doing it for a while and that makes your budgeting harder to do.

You’ll Probably Renovate More Frequently

With the exception of unexpected repairs, renovating for rental tenants just means getting the place in order before new tenants arrive. They’ll stay for months or even years before you need to go the whole hog again – and there will be funds to draw on for basics like a fresh coat of paint. Airbnb guests will expect things to be just as perfect as new tenants do, and you foot the bill. Again, it’s an expense that you shouldn’t overlook when considering what returns you’re likely to generate.

“There is no Free Lunch”

The adage that there’s no such thing as a free lunch is popular with those trying to express the idea that you’ll never get something for nothing. Yes, you can make good money with Airbnb, but it isn’t passive income. You will work hard for it, and you will take a certain amount of risk. After all, you’re expecting a steady stream of strangers through your house.

As property managers in Hobart, we don’t ordinarily recommend Airbnb as an option. It’s too high-maintenance, too unpredictable, and it even has the potential to make you a loss on your investment property rather than a profit. Choose Baxton Property management to take care of your property and enjoy passive income you can rely on.


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We hope you enjoyed this article

The information contained in this article is based on the authors opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.

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