Does anyone rent to someone who Airbnb’s your property?

Question

I’ve had someone apply for a property of mine that disclosed they want to in turn sublet via Airbnb the rooms. Interested in hearing your experience. Anything specific I should write in the contract to account for the excess wear and tear? Extra security deposit? A % of the profits - if so how much? Or should I just avoid the risk altogether?

Thanks!

Nathan Gesner · Answer

This is referred to as "AirBnB arbitrage" and it's a get-rich-quick scheme promulgated on social media. In my experience, most of the people using this technique are amateurs that will not stick with it long-term. They expose you to increased risk and possible abuse/neglect of your home. You have no way of tracking who they put in, how they manage your rental, etc. When the going gets tough, they'll leave you out to dry. They tend to ignore laws like zoning, taxes, and other factors. And did you know that if they violate housing laws, you're still responsible for the actions and subject to a lawsuit?

Is your property even zoned for short-term rentals? If it is, why not give it to a property management company and let them manage it for you while making you a little extra money? This applicant thinks they can pay your the expenses and still make a profit, so just do the same thing yourself.

John Underwood · Answer

Sounds like any opportunity to cut out the middle man and just self manage the STR.

Caroline Gerardo · Answer

What insurance coverage do you have? Is it legal in the city? Will the neighbors go crazy? Do you care about the property? Often rented to college kegger parties, bachelor parties, illegal activities...

Drew Sygit · Answer

@Kevin Trapani why avoid it based on our responses?

You should use our advice to make your OWN decision!

Here's a few comments on why:

1) Are you interested in doing STRs?

2) When did you explore their level of experience and cover all the zoning & other issues mentioned above?

3) Have you computed what percentage of shared arbitrage profits will lead to you increasing your cashflow over your LTR amount?

Point is, use our advice to protect yourself from possible problems, while still exploring increasing your profits.

Kevin Trapani · Answer

Thank you everyone for the input. Mostly confirmed my hesitations. Will avoid

Elisabeth Lernhardt · Answer

I would be talking to a lawyer about the liability. If you want that kind of tenant , be prepared for all kind of trouble/ If that's ok , do it yourself.

Does anyone rent to someone who Airbnb’s your property?

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