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General Landlording & Rental Properties

User Stats

158
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124
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Juan Diaz
  • Flipper/Rehabber
  • Emeryville, CA
124
Votes |
158
Posts

The Difficulties of Airbnb

Juan Diaz
  • Flipper/Rehabber
  • Emeryville, CA
Posted Jun 22 2016, 13:50

I decided to write a column about my own experience putting some of my investment properties on Airbnb, so that you too can learn from my mistakes, understand what a good rental requires, and learn some of the horrors of hosting on Airbnb.

Let me not mince words here. Airbnb can be a horror show. I think we can easily start off by saying that Airbnb will never take your side as a host if it can possibly avoid it. Its priorities lie with its guests, and if you’re OK with losing the benefit of the doubt in most situations, you can still find ways to turn a profit.

Airbnb guests as a whole can be a mixed bag. Putting your property on Instabook is the only way to generate a consistent revenue stream, as most people don’t want to deal with the hassle of the back-and-forth that leads up to a reservation. What this means is that you aren’t able to screen very well, so you get a wide variety of guests at the property.

We’ve had parties in our rentals. We’ve had dark stains all over. We’ve come back to the noxious, heavy smell of weed, which can never be removed. We’ve come back to broken windows. Airbnb guests can be quite the handful. And best of luck trying to get a refund from them through Airbnb – unless you’ve extensively documented condition of items before and condition of items afterward, you’re not seeing a dime. And you’ll never get anything back for something that can’t be captured on film like a horrible smell.

So add those replacement fees onto the maintenance fees that you’ll incur. Whenever someone stays at your property, you’ve got to clean the please until it shines, otherwise your guests will be unhappy. This regular cleaning expense can run you $25-50 a pop, and the deepest of cleans can still see customer complaints.

The other thing you’ll learn is that sometimes guests can cancel reservations with impunity, and no financial reimbursement to you, even if you have a strict cancellation policy. If the guest has anything that could possibly be construed as a safety complaint, they will get fully refunded and it’s on you to bear the costs of cleanup. Not only that, but you’ll have people who book up large swathes of time on the calendar, only to cancel after they get there, making you lost opportunity to have other people book in their spot.

And you know what counts as a safety concern? Next to nothing. You’ve got a lot of folks from the suburbs coming in, expecting a bleached-clean version of a city where everything’s clean and the streets are free of any loiterers. Seeing even one street person loitering on the street can shock their system, and qualify as a “safety concern”.

Add to this the normal humdrum stuff, like calls at 3 am because the tenants locked themselves out of the house, and you can be faced with some nightmare scenarios through Airbnb. Now, imagine that same guest having locked themselves out, getting you to send someone to change the locks for $50 because you don’t have more copies of the keys, the tenant then finding the key, and then refusing to pay the extra $50 when they’re presented with the bill. Yes, it’s all happened before.

So how do you avoid these hassles when you put your place on Airbnb? You can’t. But, if you’re willing to deal with these hassles and go far out of your way to work with some ridiculously-picky guests, you can probably find a way to make money. Part of it is probably the fact that the Bay Area cities that I work tend to fall on the dirtier side of American cities. It’s hard to compare the walled garden of a chain hotel with a house in Oakland, no matter where it is. So if you’ve got a house in a more suburban location, you might fare better. Either way, expect to go above and beyond to meet the needs of your Airbnb guests.

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