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David Oberlander's profile image
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  • from Valrico, Florida
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David Oberlander's profile image
  • Investor
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David Oberlander
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  • Valrico, FL
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Wow, my tenants have a 5 star "Host" rating on AirBnB! For my Property???

David Oberlander
  • Investor
  • Valrico, FL
Posted Jul 19 2015, 06:04

Good morning, BPers.  Hope your weekend is going better than mine.  As you can see by the subject line, tenants at one of my rental properties have decided to increase their income by renting out rooms at the house they rent from us.  It's a duplex.  The tenant next door called yesterday and told me he thought they were having various people coming and staying for the past month and that he hadn't seen either of the couple living there for a week.

It took less than five minutes to find the listing for our property on AirBnb and to start reading the 31 reviews they have received (almost a 5 star average) for the "property" they "own".  LOL  (no, actually I've been doing a slow burn for about 16 hours)

So, what do we do next?  As they are in violation of their lease, various city ordinances, building codes, etc I intend to shortly ride over there and slap a 7 day vacate notice on the front door.  Then should I sign up on AirBnb as a guest and leave a "review" telling people not to try booking a room at this "hotel" and that those who have booked up already need to request a refund?  Yes they have reservations booked thru September.  I'm sure my insurance company would love handling a claim from some one getting injured there.

The thing is I kind of like the AirBnB concept.  As I intend to add vacation rental properties to our holdings and use them for bookings.  But this proves to me that AirBnb has no way of verifying owners or renters at properties listed there.

Anybody else have this situation occur? Or have any suggestions or comments as I'm open to any ideas.

David Hays's profile image
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David Hays's profile image
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David Hays
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David Hays
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  • Malaga, Andalucía
Replied Jul 19 2015, 14:24
Originally posted by @James R.:
Originally posted by @David Hays:

@James R.

 While you may not be personally comfortable with the idea, I haven't seen a long-term residential lease yet that would preclude being active on Couchsurfing, and I'm curious to know on what basis you were able to evict them.

David,

I didn't evict them.  I waited until their lease was up and did not renew it.  I know the phrase "Kicked them out." sounds like evicting.  I should have written "Asked them to leave."  

James,

That makes sense, and under those circumstances I can understand where you're coming from. Thanks for the reply.

David Hays's profile image
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David Hays's profile image
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David Hays
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Replied Jul 19 2015, 14:34
Originally posted by @Silvia B.:

@David Hayes: You are wrong is assuming that they would "be less inclined to allow drugs, violence or criminal behavior" than I would. My rental is next door to my personal home and I am very particular about who I allow to live there, as it not only affects me but also my neighbors. I absolutely do not accept felons or sex offenders. Criminal activity does not always occur in the residence which is why you do a criminal background check and do not allow sub-leasing. But, my rental is a SFR and not a vacation rental.

Sylvia,

I understand where you're coming from here, but in this case I think you can understand the difference circumstances that we're comparing. I find it highly unlikely that you would not notice one of your tenants in an attached unit offering their property on Airbnb, in which case you would be able to nip the issue quite early. Even still, what you're saying here doesn't really disprove my point - I understand that you may vet your tenants thoroughly, but I'd imagine that if you saw one of them sparking up a crack pipe you'd shut it down immediately, no? I imagine the same would apply for any person that is offering a property on Airbnb, especially if they're offering a room in their own residence. In any case, I'm certainly not telling you what to do with your properties, nor what you should be comfortable with. I mentioned earlier, it's not for everybody, but I know my clients appreciate getting 2-3x the income they'd see from market rents.

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Deanna O.'s profile image
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Deanna O.'s profile image
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Deanna O.
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Replied Jul 19 2015, 14:40

You have DO the right to do a "cure or quit", but maybe first figure out what rent increase would make you happy to keep them. The Airbnb site will show you the daily rate they charge and how many days are booked. If they are making $3k/month, and you bump rent from $1k to $1,300 you can use the extra rent to upgrade the other tenant's place, spiffy up the outside, pay down the mortgage, etc.

BTW, you ARE protected by Airbnb (their $1mil is better than the coverage I carry) and Air Bnb has recently upgraded to include "professional tenant" legal coverage (my insurance Co doesn't offer that either LOL). Second, as others have pointed out, if these guys have a 5 star rating they are keeping the place spotless, and are organized.

If they leave they leave, if they pay extra...could be win/win.

Jane A.'s profile image
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Jane A.'s profile image
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Jane A.
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Jane A.
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Replied Jul 19 2015, 14:44
Ask tenant to share profit and find new tenant for another side with the same business model. You will double your rent :)))
Robert R.'s profile image
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Robert R.'s profile image
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Robert R.
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Replied Jul 19 2015, 15:07

I would contact my attorney. This is sub leasing and if in your rental agreement you can have them removed. 

Steve B.'s profile image
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Steve B.'s profile image
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Steve B.
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Replied Jul 19 2015, 15:09
not sure why you are angry other then schadenfreude, they made their rent payments. I would simply emulate their success by reclaiming the rented space and Airbnb'ing it myself building in what they developed for you - perhaps you would then owe them a thank you letter.
David Oberlander's profile image
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David Oberlander's profile image
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David Oberlander
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David Oberlander
  • Investor
  • Valrico, FL
Replied Jul 19 2015, 15:59

Time for an update.  The time stamps I see on posts are PDT not EDT so it's now 6:30 PM and my original post was around 9 AM.  If anyone can tell me how to fix this I'd appreciate it.  It's only my second post after 7 years lurking here.  LOL

Anyway, at 11 Am arrived at the property and posted 2 notices giving the tenants 7 days (one with cure, one without) to vacate. On July 29th, I'll let the court clerk tell me which one was correct and then evict them.  The eviction is almost automatic.  The tenants are so busy they haven't been able to return a phone call after almost 8 hours.  Maybe they're dead?  LOL See I can make a joke, too.

Found a telephone number buried deep in Airbnb website and they then gave me customer service's number.  Took them 20 minutes to answer but they did.  I was very gentle with them.  Three hours later they got back to me with an email that included this

"Thank you for contacting us regarding your concerns with your tenant's listing.

Airbnb is an online platform and does not own, operate, manage or control accommodations, nor do we verify private contract terms or arbitrate complaints from third parties.

We do, however, require hosts to represent that they have all rights to list their accommodations."

Where I come from we call that a steaming pile of dog$#it.  How did they verify the representation?  LOL They didn't, of course because that would take someone actually doing work.  And all of 5 minutes.

The more I investigate Airbnb the worse they look.

I'd like to thank everyone for their comments.  I'd be here all night responding individually.  Some are funny, some are helpful, and some of you are from outer space.  Especially those of you that think Airbnb "Insurance" is actually worth the paper it's written on.

Account Closed's profile image
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Account Closed
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Replied Jul 19 2015, 16:33

I deleted my earlier draft letting you know that contacting airbnb is not necessary and waste of time.  Sorry about that.  There is so much misinformation in this thread that my head is spinning. 

The terms of your lease regarding subletting and guests are between you and your tenant.  Not an airbnb problem.  Vacation rentals may or may not be regulated or taxed in your muni.  Again, not something airbnb deals with.  Your tenants may or may not be representing themselves as "owners".  Just because online reviews refer to them as the owner doesn't mean they've represented themselves as such.

Airbnb's $1M liability policy supposedly has been updated to include landlords/owners of property hosted by tenants. 

The normal course of action is to let the tenants know they are in violation of their lease.  Lots of easy violations, such as running a business, length of guest/visitor stays, subletting and the requirement that the property be their primary residence.  Your lease is airtight on all these issues, correct?

You served notices.  Now let them cure or leave.  They can stop offering it on airbnb and live there as their primary residence, or they can move.  Why be all dramatic about it?  What's the big deal? You don't like it, you fix it.  That's what grownups, I mean professional landlords do. :)  I suggest that you not sign up to get an account on airbnb just to post a negative comment.  You can't review without having been a guest.  If you do, you're in violation of airbnb's terms of use. They have more money than you do.  And you would be treading in libel and slander territory with your tenants.  

Relax.  This has to be about the easiest and best, most fixable problem you'll ever have as a landlord. 

Hugh Ayles's profile image
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Hugh Ayles
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Replied Jul 19 2015, 16:42

"we do however require hosts to represent that they have all rights to list their accomodations"

And that is where Airbnb insurance does not cover your property.

Account Closed's profile image
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Account Closed
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Replied Jul 19 2015, 16:54
Originally posted by @Account Closed:

There are plenty of horror stories of airbnb  tenants causing damage, not vacating the premises when there time is up plus a mentioned local laws that you might be in violation of.They are conducting a business which is probably in violation of your lease They are a lot of potential liabilities and no upside for you  

What is this plenty you speak of? Can you find 20 such stories? 50 maybe? There are some, of course. Pretty sure there is no comparison between airbnb guest horror stories and tenant horror stories. None. Trouble free stays are the norm for millions of airbnb hosts. Not so much for the SFH/MF landlord. Our UD courts are busy for a reason.

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Cindy Meyer
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Replied Jul 19 2015, 16:57

@David Oberlander I appreciate how you are handling this with a sense of humor and think you did the right thing by posting notice(s).  The "Found out my tenants aren't being honest with me, so now I am going to partner with them" line of thinking doesn't really make sense to me.

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Account Closed
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Replied Jul 19 2015, 17:25

@K.marie P  Of course there are much more horror stories of tenants there many more and I am sure for the most part it is safe the topic is that a non-owner (tenant) is subletting thru Airbnb and not the merits of the  service itself .

It is an added liability that I would not like to have since,as you mentioned, there are so many from plain old renting 

http://www.huffingtonpost.com/2014/07/29/airbnb-horror-stories_n_5614452.html

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Oren H.'s profile image
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Oren H.'s profile image
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Oren H.
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Replied Jul 19 2015, 17:37

A few months back I have received a letter from the city of Austin that they suspect I use a property for short term lease. Apparently the tenant posted the property on Craigslist and somehow the city found out about it. the tenant has not actually sub-leased (just posted the ad) and she apologized so we allowed let her stay. But overall, I wouldn't recommend allowing this behavior as the city fines (and any liabilities) will be on you.

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Cal C.'s profile image
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Cal C.
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Replied Jul 19 2015, 17:43

this is what I would do right now.  I'd post on the review thread that I'm the real owner as documented by tax records and if you stay there I will file to evict you.  There are obvious problems with actually evicting someone from airbnb but I'm sure it wi. Put a damper on their business.  I'd also contact airbnb as others have suggested,

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Account Closed
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Replied Jul 19 2015, 18:16
Originally posted by @Oren H.:

A few months back I have received a letter from the city of Austin that they suspect I use a property for short term lease. Apparently the tenant posted the property on Craigslist and somehow the city found out about it. the tenant has not actually sub-leased (just posted the ad) and she apologized so we allowed let her stay. But overall, I wouldn't recommend allowing this behavior as the city fines (and any liabilities) will be on you.

It's been my theory for the last year or so that the munis (cities, counties and states) will be the ones to really impact airbnb's business in the US.  The munis mostly want revenue. The hotel industry is furious as airbnb offers pricing and accommodation alternatives they can't/won't.  Some munis want to license/permit short term vacation stays for health and safety.  But mostly it's going to be an income source by passing laws and ordinances that collect taxes and fees, and to make the hotel people happy.  

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ModeratorReplied Jul 19 2015, 18:21

@David Oberlander  The biggest concerns would be the increased wear and tear on the property having groups over a family, etc. and the insurance. Maybe you should talk to the tenants and try to find a compromise. Require them to carry insurance naming you , that they inform you anytime the property is being rented, and they obtain a security deposit which will be deposited into your account to cover any potential damages. 

You probably should run it by an attorney to be on the safe side. 

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Brian Tremaine
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Replied Jul 19 2015, 18:23

Jr T.

Transient tenants can "party till the walls come down". I've seen this on the news regarding AirBnb, it is a reality. There has been cases of dreadful damage. Landlords definitely need to be concerned about this. Also, this may effect insurance coverage claims.

Check out this damage from a rage AirBnb_rage

Alex Baev's profile image
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Alex Baev
  • Miami, FL
Replied Jul 19 2015, 18:30

AirBNB is clearly reaching a critical mass world wide. It's spilling out into forums like this, I heard somebody talk about it at my local REI club last week and at the building department - not to mention the nation-wide TV commercials they started airing about 6 months ago. It's a brave new world out there, and Airbnb is here to stay - and I would strongly suggest everybody who's into rental income to explore it, read their terms and conditions, talk to your attorney about it.

For the record, I am both a traditional landlord and an Airbnb host. We host people in our guest house, and my wife finds it pretty easy to manage, while I deal with the website booking and interaction. We've increased our liability coverage - I don't trust Airbnb's "million dollar guaranty", as it specifically refuses to cover medical bills, accidents and such and only pretends to cover personal property.

I also rent out a house to a young family on a year-lease - and that property has a guest house as well, and I'm monitoring and waiting for a day when I have to address Airbnb issue with them... or cure :)

The site is nothing more then a middle-man and a platform to connect hosts and guests - even though their own terms and conditions try hard to avoid that label. They are trying to be a PayPal account for short-term rentals in complex, over-regulated municipalities all over the world - and pissing off the hotel industry, a lot of finance departments and clearly some landlords in the process. You can rent a castle in the Scottish countryside or a tent under a tree in my neighborhood in Miami and everything in between.

Airbnb won't give you any info about their users - tenants or guests. The original poster will not be able to leave his "tenants-hosts" any sort of negative or a warning review until he registers on the site, goes through some form of ID check and then requests and actually completes a stay - and I doubt that's happening. Contrary to what some have suggested, the original poster can't just take over their "business", using the "good-will" accumulated by the positive 5-star reviews and use it from here on to his advantage. All of the reviews are tied to personal information of the host, not address of the accommodation - many hosts have multiple listings, and all of the reviews show up on the individual listing page, but also always point back to the host.

Clearly, the disconnect here is that you're carrying extra liability and your property is experiencing additional wear&tear - all without any additional benefit to you. That's the reason most condo HOA's don't want to deal with units that are found to be Airbnb hosts - too much liability exposure without any tangible benefit to HOA as a whole. But you as an owner of a single family or a duplex may be able to derive additional income while protecting yourself from additional liability. Short-term rentals are nothing new in RE, neither is allowing your property manager live on premises of a multi-unit complex for free or at a reduced rent in exchange for management services.

While you've already served them notices, you can still sit down and explore with them this brave new world that's you've finally stumbled upon - even if you still say no at the end.

You could terminate the old lease on mutual agreement and re-sign a new one, on terms that lay out how you see this potentially moving forward. You can reasonably demand more money form them without seeming greedy simply by explaining to them that you need to update your insurance liability coverages, perhaps get a permit or an additional license. There may naturally be more wear and tear - but there may also be significantly better maintenance on their part, as the good reviews don't come by easily and they've already been doing something right.

Very curious to see how you and they handle it, though - keep everyone posted.

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Replied Jul 19 2015, 18:42

BTW, the website allows hosts set security deposit amounts, and hosts have some time after the stay is complete to file a claim against that deposit in case of damages. By agreeing to terms of any given listing, guests therefore agree to terms of such a security deposit set by the host. 

Some of the short-term listings near me, especially entire vacation houses, set deposits at $3,000-10,000 - and thus deter yahoos, and simply cater to more mature and responsible guests. A lot of the tools are in your hands - so is the city hall and a building department to ask questions.

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Rod Desinord
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Replied Jul 19 2015, 21:55

That tenant is a genius. I would raise the rent, if they dont like it tell them you will start the eviction process. But let them know they are personally resonsible if anything happens. Unless you just kick them out and do it yourself!

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Replied Jul 19 2015, 22:10

I'll probably get fired for this if someone finds it but I'll say it anyway. Nowadays take what you hear in the news with a grain of salt.

Do your own research because TV stations aren't. Local stations have been bought by big companies and have been scaled down so much to try and make as much profit for the company that journalism in itself is going down the drain fast. How do I know this? I'm a journalist and have been for almost a decade. I've seen the rapid decline since I've started.

The networks are also scaling back except for a few, and they need ratings so bad, that they will way overhype things to get higher ratings. The problem then is, on the local level, we take the feeds from these big networks as-is and run the story without doing research and looking to balance out the story. Journalists just aren't given the time to really look into things like they used to. There is a lot more pressure from producers that need to fill their ever expanding newscasts to turn as many stories a day as possible.

I like to use Uber as an example because it was making a lot of headlines. Since Uber was very new and different people were paying attention to it. And of course taxi companies are not happy with it because they have to now compete with something. So what do they do, they go to city council and invite the media to televise them slandering Uber and talking about how it's a public safety issue, we'll all the local stations are there and every station wants to be first to air with it and with no time to research anything they just go with it. Now we like to skirt around facts by saying XYZ Taxi SAYS that Uber is a huge threat to public safety.

Now if we actually took the time to dig things up and research the topic, out of the millions of rides given each day through Uber, the chances of becoming a victim of a crime in an Uber is substantially less than becoming a victim of a crime in a taxi, and even if a reporter had the time to find this info producers feel that nobody cares about taxis because they've been around forever, so that news won't generate ratings, so producers don't like it, so it will never see the light of day. But every single time there is an incident with Uber you can bet you'll see it on the news.

Sorry for the ridiculous rant I just went on, but when I see people start saying well there are tons of horror stories about it, I just get infuriated by it. It's not their fault, it's the media's. How many times has someone died using AirBNB? How many times has someone died while staying in an actual hotel? Use your brains and as much as I hate to say it, don't rely on the media for credible information anymore.

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Jeff Tracy's profile image
  • Investor
  • from Peekskill, New York
  • Member since Jan 17, 2015
Jeff Tracy
  • Investor
  • Peekskill, NY
23
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22
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Jeff Tracy
  • Investor
  • Peekskill, NY
Replied Jul 19 2015, 23:43
After thinking about this for a moment I think I have a better solution. Why not just increase their rent to cover the additional wear and tear on the property and let them keep subletting the place? They are taking good care of the place and you are getting the amount of rent you had expected.
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JR T.'s profile image
  • Financial services executive
  • from Frederick, Maryland
  • Member since Jul 8, 2015

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JR T.'s profile image
  • Financial services executive
  • from Frederick, Maryland
  • Member since Jul 8, 2015
JR T.
  • Financial services executive
  • Frederick, MD
341
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609
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JR T.
  • Financial services executive
  • Frederick, MD
Replied Jul 20 2015, 03:50
Originally posted by @Account Closed:

There are plenty of horror stories of airbnb  tenants causing damage, not vacating the premises when there time is up plus a mentioned local laws that you might be in violation of.They are conducting a business which is probably in violation of your lease They are a lot of potential liabilities and no upside for you  

 ^^^^These issues are faced by landlords with tenants of all types. I seriously doubt there is any data to back up the notion that tenants who operate an AirBnB business are any more likely to default than any other tenant in one's portfolio.

The upside to "me" or any other landlord is continued rent payments. Evicting a rent paying tenant is a bad business practice unless their conduct affects your ability to collect other rents.

JR T.'s profile image
  • Financial services executive
  • from Frederick, Maryland
  • Member since Jul 8, 2015

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JR T.'s profile image
  • Financial services executive
  • from Frederick, Maryland
  • Member since Jul 8, 2015
JR T.
  • Financial services executive
  • Frederick, MD
341
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609
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JR T.
  • Financial services executive
  • Frederick, MD
Replied Jul 20 2015, 03:55
Originally posted by @Silvia B.:

Jr T, it's not just about the money. This landlord has no  control over who his tenant let's stay in his property. This is one of the reasons that landlords run criminal background checks on prospective tenants. I don't want felons, drug dealers or sex offenders in my rental even if they pay the money!

 For me it's about the money, this is supposed to be a business. I have not heard stories of AirBnB being overrun with felons, drug dealers and perverts. Moreover I would be glad for anytime I was both receiving rent and my property received coverage under this million dollar insurance policy:

https://www.airbnb.com/guarantee

Allison Karrels's profile image
  • Investor
  • from Gainesville, Virginia
  • Member since Aug 28, 2014

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Allison Karrels's profile image
  • Investor
  • from Gainesville, Virginia
  • Member since Aug 28, 2014
Allison Karrels
  • Investor
  • Gainesville, VA
75
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118
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Allison Karrels
  • Investor
  • Gainesville, VA
Replied Jul 20 2015, 04:06

I would not evict them. I would raise their rent and raise your insurance but keep them on.  They have a good rating, so they are keeping the house in good condition, they are paying their rent. 

yes they should have told you they are doing this so you can protect yourself, check with your attorney what else you should do.

good luck