I’m here today to discuss how short-term rental investors can best weather these very uncertain times that we’ve entered as the coronavirus pandemic upends the rental market. Let’s get started.
How Airbnb Investors Should Respond to Coronavirus Cancellations
1. Don’t Panic
Number one—and this is the most important piece of advice that I’m going to give you today—do not panic. Don’t panic and sell off all your investments in an act of fear.
I totally understand that fear of the unknown is way scarier than the fear of any known element we can think of.
I ask you not to make any big decisions about your investments right now. Take a breather. Give it a couple of weeks. Let’s see what’s going to happen before we make any rash decisions about our investments.
2. Adjust Your Listings
Number two—adjust your listings. In both my beach and mountain markets, we received a wave of cancellations, as we all did when the coronavirus first started.
A few days later, we actually got a wave of inquiries from people who had been social distancing in their homes, were going a little stir crazy, and wanted a change of scenery while social distancing.
So anything you can do to make your listing more attractive to potential social distancing renters, go ahead and do that—whether it’s adjusting your prices, adjusting your minimum and maximum night stays, or making your listing pet-friendly for a while.
Make a list of all of the food and delivery services that serve your location and put it on the front of your listing. Do anything you can do to make your listing stand out as a place where people can go and social distance while still being able to meet their needs.
3. Communicate With Your Guests
Number three—communicate with your guests. Now’s a really good time to turn off all those automations that we love so much and communicate as a human being with your guests.
Guests are going to be extra cranky right now. They’ve got a lot to think about, as we all do—income, family, what’s going to happen next, fear of the future.
So they are going to be a little more sensitive to things about your house that they might not have been concerned about three or four weeks ago.
You catch more bees with honey though. I’ve turned off the automations and am having real conversations with my guests to make sure that they’re happy.
Humanize yourself. Make sure they know that you’re a real person and not some corporation that owns a ton of properties like a hotel. Anything you can do to make yourself more human to your guests is going to be beneficial to you.
And it’s also a really good time to show some grace to our fellow humans. We’re all in this thing together, and it’s not easy for any of us.
Communicate personally with your guests, and turn those automations off for a little while.
4. Rental Arbitrageurs
Number four—rental arbitrageurs. I have not historically been a fan of this method, but there’s definitely a time and place for it. I think that time is now.
For those of you who don’t know, rental arbitrage is a method in which someone will rent your property on a long-term basis with a traditional lease and then turn around and Airbnb it on the backend.
This is a really good option for people who maybe don’t have the cash reserves in place that they wish they did. They want some security with knowing that their mortgage is going to be paid.
I’ve actually had several arbitrageurs reach out to me and ask if I have any clients who are worried about their mortgage payments. They would like to forego the short-term game for a bit and go ahead and sign some long-term leases.
So that’s definitely an option right now if you’re unsure about covering your expenses. Reach out to a few arbitrageurs and see if they might be interested in running your property long-term.
5. Refinance Your Property
Last, it might be a good time to explore financing options and refinance your property. At the time of writing, interest rates are really good.
If you start to refinance now in March and close in April, your next mortgage payment is not going to be due until June.
That buys you a little bit of time to get your bearings, get your feet underneath you, and figure out what’s going on before you make any big decisions about your investments.
That’s it for my five tips. And remember, we’re all in this together.
How are you currently dealing with the challenges of managing your Airbnb properties?
Join the conversation in the comments below.