The Difficulties of Airbnb
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.
@Carolyn Fuller I've had a very similar experience in Boston. The net income we're getting in comparison to a long-term rental is 2-3x better, and we have had little to no issue so far.
@Juan
@Juan Diaz The group and location definitely matter. I find that smaller groups (1-4 people) actually seem to be more trouble than the larger ones - they are more apt to breaking rules from my own experience. Being in Boston, it's mostly families too, and that makes a huge difference.
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Real Estate Agent Rhode Island (#009528102) and Massachusetts (#009528102)
- Clipper Properties, LLC
This is the kind of crap that you can prevent by screening all the people you accept into your property.
haha, that's fantastic.
We've got a no-party and max #s limit, so we haven't had much difficulties with parties, thankfully! Usually the people who cause problems are just a small group, 2-4
I was thinking about doing Airbnb short-term rentals on a small cabin I inherited near the Asheville, NC area. It has 2 BR/1 BA house. I was wondering if renting out in an older neighborhood near the interstate would be a good idea. I appreciate the feedback. All the good with the bad.
@Marnie L. Asheville is a very, hot rental market right now. I rented out my house (long term) in 5 days flat from listing to signed lease. I had calls from Denver, Michigan and Wilmington as well as all the locals. As far as Airbnb is concerned, over two million people visit Asheville from September to November for the Fall foliage. My advice, go for it! Keep us posted.
Thanks, Shirley, good to hear you were able to rent out your house very quickly! I've heard about City of Asheville prices going sky high in recent years. I'm also considering a long-term rental such as a 6-12 months lease.
I've had experience with rental properties, but never anything short-term like vacation rentals such as Airbnb, etc. Similar to others here, I could write a book (or blog) about my past renting mistakes. Since I currently live in GA, a possible long-term rental may be a more stable, consistent option for my situation. I may even consider a rental management company since I don't live in NC.
@Marnie L. If I can help at all Marnie, let me know, even if it's just being boots on the ground for you, it would be great experience for me. I have my real estate license but it is currently inactive however, I have connections and I will probably be activating it early next year and aligning with Black Bear Rentals in Asheville and my desire is to get into Property Mgmt specifically. I am in the early stages of acquiring a 9 unit apt bldg so I will be managing that as well as my SFH.
@Carolyn Fuller Hey Carolyn, sorry for bogarting your post and for the record, I'm from Chicopee, Ma originally! :+)
@Juan Diaz how are things going with AirBnb? I purchased a tiny home, parked it in my backyard, and i'm considering the AirBnb Route. i'm in East Oakland
95% of my guests have been awesome and relatively hassle free, but I just got through the worst of a hellish rager after the pride parade here in Chicago that saw some of the shadiest people from the South and West side dropping car loads of their friends off at one of my units. Best part, the person who booked it was charging a Cover CHARGE!!!! To get into the unit!!!!!
After evacuating 50 people from that apartment, calling the cops, apologizing to the neighbors and other tenants, fixing a toilet seat, changing the locks, and airing the smoke out of the apartment. I’m definitely nursing some psychological short term rental wounds, but it’s still worth it.
You make more money most of the time with Airbnb and you just have to be willing to accept and manage the risks that are associated with it.
As an Airbnb superhost myself, I agree with the main post. It's a great business model, but everything he pointed out is on point.
Airbnb is similar to having a large Apt complex, there will always be a few bad apples, given enough time you will come across them. The points made here are very valid in that don't expect that that it's an easy route, and definitely don't expect Airbnb to be a fair mediator. I work for a management company, have hosted hundreds of guests, had to deal with 2 evictions, a fire, and numerous lost cases with the Airbnb resolution center.
@Mark Cohen Airbnb eviction!? squatting guest?
Great discussion so far on STR’s.
I operate a home here in Scottsdale, AZ and have certainly gone through a lot of problems mentioned here in this discussion. I use both AirBnb and Vrbo as platforms for my guests. I oversea those channels for pricing, booking, guest relations, and i also manage the backend of turns between guests, maintenance, and property improvements. While every market is different, it’s important to put yourself in the guests shoes to cut off pain points while also keeping your objectives in mind. Installing items and deploying techniques like electronic locks, cameras, proper guest screening, listing descriptions, and knowing how each platform operates is key. Also, having plans in place to mitigate risk, like rental property insurance is huge. I personally prefer Vrbo over Airbnb for various reasons and have setup my strategy that generates 85% of revenue from that platform due to who my target market is. Having a idea of what kind of traveler comes to your market and then crafting listings to appeal to them is huge. Hope this helps any readers!
Condo-tels are puRRfrct for the Airbnb thing.
