I've learned my lesson with AirBnB rentals

I've learned my lesson with AirBnB rentals

Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

So I rented an AirBnB property in Dallas. This was the third time I've used that platform to rent a property and each one has been an illegal rental. I'm done.

The first one was in California three years ago. It had five 5-star reviews. On the day of arrival, I was unable to reach the host at all. We arrived at the property and discovered a leasing office. Sure enough, our "host" had been caught and evicted. Three days before Christmas and we had to scramble to find somewhere to stay.

A couple weeks ago I stayed in Dallas. I found a nice place downtown with 25 reviews at 4.7 stars. None of the reviews really said anything negative. Here's how the host describes himself:

I was a little worried this would be some arbitrage setup but I thought AirBnb put an end to that and required hosts to verify authority. I was wrong. The first red flag was on the day of arrival when they sent us check-in instructions that included 15 steps, nearly 20 pictures to help navigate the building, and several warnings not to speak to any of the staff in the building or we would be fined $500. Yeh.

The place was not cleaned well and missing some pretty basic amenities like hand towels and wash clothes, no cork screw, a cheap coffee pot with a decantur with no lid that had to be wrestled in/out because it was from a different brand/model, no welcome page or even instructions for the WiFi password, three towels for a rental set up for four guests, etc. It was a decent space and location, but I could tell the host had no customer service skills or attention to detail and it was a complete money grab. 

I contacted the leasing office as an interested renter and confirmed they do not allow short-term rentals or subleasing in the building, period. Now I've reported the host, though it's probably a waste of time.

Long story short, I've probably stayed in about 20 vacation rentals through VRBO, HomeAway, or professional management companies and they were always a good experience. I've rented through AirBnB three times and it's always been less than a 3-star experience. It won't happen again.

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
5y

It seems like the problem with Airbnb is that they allow Co-hosts. This seems to encourage Arbitrage. The millennials seems to see this as a get rich quick scheme where they need no or little money of their own to get started. 

Many of these arbitrage people just walked away from their obligations when the pandemic hit and their urban house wasn't making any money and they couldn't make payments to the owner.

If I wasn't willing to manage my own property I would get a licensed PM. I would never get some wet behind the ears kid with no credentials or license to manage my property, but that's just me apparently.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    NO Cork Screw  Screw that..  :)  personally I only stay at those type of places if absolutely necessary and cant find anything else.  I like the consistency of a nice hotel brand.   But i can see it with large family or areas that are under served by hotels.  And now the room keys are on your phone you dont even have to check in at the front desk. But I am primarily a business traveler only staying 2 to 3 nights.

    We rented one Air BNB in the Catskills for a wedding and the beds were horrid.. never again.
  • John McGonigalPro Member
    Rental Property Investor · Montgomery, AL · Member since 2018 · 80 posts · 51 votes
    5y

    Hi Nathan, sorry you had 3 bad experiences with Airbnb. As a relatively new STR host for our 3 Branson condos, we (wife and I) self manage and advertise on Airbnb and VRBO exclusively. 184 of our 200 bookings In 2020 used Airbnb. Based on their reviews and our interactions with all of them, I believe they had a great experience overall. Most definitely not your experience.

    In general, It does appear the VRBO guests  fit a different mold as compared to Airbnb guests (longer stays, Booked farther out, etc) but I wouldn’t label them better or worse. We have a lot of great customers from both platforms.

    However, we are in a vacation market as compared to a large metro where your bad experiences occurred, so maybe there's less need for Unethical/illegal hosting. Since we host on both platforms, I don't recall either of them requiring proof of legal hosting though both asked to make sure we were authorized owners and to comply with local STR laws.

    Bottom line, there are a lot of great hosts who legally use Airbnb to market their rentals and provide excellent service to their guests. Sorry again for your bad experiences.

  • Nathan GesnerBusiness Member
    Moderator
    OP
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y
    Originally posted by @Jay Hinrichs:
    NO Cork Screw  Screw that..  :)  personally I only stay at those type of places if absolutely necessary and cant find anything else.  I like the consistency of a nice hotel brand.   But i can see it with large family or areas that are under served by hotels.  And now the room keys are on your phone you dont even have to check in at the front desk. But I am primarily a business traveler only staying 2 to 3 nights.

    We rented one Air BNB in the Catskills for a wedding and the beds were horrid.. never again.

    Traveling by myself I would prefer a hotel. With family, I prefer a VRBO where we can eat in and have room to spread out.

    The DIY Landlord Book4.7247 Reviews
  • Nathan GesnerBusiness Member
    Moderator
    OP
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y
    Originally posted by @John McGonigal:

    Hi Nathan, sorry you had 3 bad experiences with Airbnb. As a relatively new STR host for our 3 Branson condos, we (wife and I) self manage and advertise on Airbnb and VRBO exclusively. 184 of our 200 bookings In 2020 used Airbnb. Based on their reviews and our interactions with all of them, I believe they had a great experience overall. Most definitely not your experience.

    In general, It does appear the VRBO guests  fit a different mold as compared to Airbnb guests (longer stays, Booked farther out, etc) but I wouldn’t label them better or worse. We have a lot of great customers from both platforms.

    However, we are in a vacation market as compared to a large metro where your bad experiences occurred, so maybe there's less need for Unethical/illegal hosting. Since we host on both platforms, I don't recall either of them requiring proof of legal hosting though both asked to make sure we were authorized owners and to comply with local STR laws.

    Bottom line, there are a lot of great hosts who legally use Airbnb to market their rentals and provide excellent service to their guests. Sorry again for your bad experiences.

    I own a vacation rental and advertised it on VRBO, AirBnB, and my manager's website. I've removed it from AirBnB for personal reasons. I am not saying all AirBnB rentals are bad, but I have had three opportunities and three bad experiences whereas my VRBO experiences are 3x as many without a single bad experience. I think there's something about the AirBnB platform that attracts the arbitrage crowd or the people with no experience in customer service. It may be a small minority, but it's been enough that I'm not willing to screw up another trip.

    The CEO of AirBnB said they were implementing new verification policies and every rental was supposed to be verified before 2021. I guess that didn't happen. Or maybe they just verified the address exists and the host is a real person, but not that the host has the legal authority to rent that space?

    The DIY Landlord Book4.7247 Reviews
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Nathan Gesner:
    Originally posted by @Jay Hinrichs:
    NO Cork Screw  Screw that..  :)  personally I only stay at those type of places if absolutely necessary and cant find anything else.  I like the consistency of a nice hotel brand.   But i can see it with large family or areas that are under served by hotels.  And now the room keys are on your phone you dont even have to check in at the front desk. But I am primarily a business traveler only staying 2 to 3 nights.

    We rented one Air BNB in the Catskills for a wedding and the beds were horrid.. never again.

    Traveling by myself I would prefer a hotel. With family, I prefer a VRBO where we can eat in and have room to spread out.

    I agree and especially in Hawaii where eating 3 meals a day a that hotel will make your eyes water when you get the bill at the end of your stay.. And Hawaii they dont do all inclusive which i like those when going to say Costa Rica or Mexico or Carrib..  in Thailand we did both and the food is great of course in Thailand so we go to restaurants and its affordable. 

  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    5y

    It seems like the problem with Airbnb is that they allow Co-hosts. This seems to encourage Arbitrage. The millennials seems to see this as a get rich quick scheme where they need no or little money of their own to get started. 

    Many of these arbitrage people just walked away from their obligations when the pandemic hit and their urban house wasn't making any money and they couldn't make payments to the owner.

    If I wasn't willing to manage my own property I would get a licensed PM. I would never get some wet behind the ears kid with no credentials or license to manage my property, but that's just me apparently.

  • Ryan MoyerBusiness Member
    Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
    5y

    I am pretty surprised at the number of properties operating illegally, on both platforms.  I've never really had any issues pop up from up, but in my last AirBNB rental I was told if I run into any neighbors in the hall to tell them I was the owner's cousin.  My last VRBO rental (a big 5 bedroom pool house in Vegas) there were signs plastered everywhere inside the house to not talk to any law enforcement that comes to the door and asks who we are and to give them the owner's phone number if they come around asking.

    As OP mentioned no mention of either of these things in any of the reviews in either property.  Could potentially put a guest in a very awkward situation though.  Sorry host, if law enforcement does straight up ask me the question I am not going to lie to law enforcement to protect you, lol.

    Cosmic Vacations4.9172 Reviews
  • Property Manager · Columbia, SC · Member since 2017 · 121 posts · 163 votes
    5y

    Did the place have reviews?  Were they good?  I think going with established credible listings is a good way to avoid such a bad experience on AirBNB.

  • Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    5y

    Yeah I think the illegal ones went away pretty fast. I know they did in vegas more than a year ago. The city simply made an account, logged on to Airbnb and vrbo and started handing out fines. I don’t know what kind of idiot it would take to break the law, ONLINE, with another company keeping the records! Gee, how could you get caught? Where would the proof come from? How could they show exactly how many times you did it?

    They have “forever” to come after you, and the longer they wait, the more you owe...

    https://www.reviewjournal.com/...

  • Rental Property Investor · Springfield, MO · Member since 2013 · 109 posts · 92 votes
    5y

    @Nathan G. So sorry to hear of your 3 bad experiences on Airbnb. But I have a wonderful short term rental (3/2/2) and it is listed on both Airbnb and VRBO. We have been open for 2 yrs and have all 5 star reviews. I don’t blame you for being frustrated. But don’t throw the baby out with the bath water.

  • Nathan GesnerBusiness Member
    Moderator
    OP
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y
    Originally posted by @David Bergmann:

    Did the place have reviews?  Were they good?  I think going with established credible listings is a good way to avoid such a bad experience on AirBNB.

    25 reviews, 4.7 stars. The "owner" has close to 500 reviews and some of the properties are single-family homes, so I thought it was an actual investor that owned the unit.

    The DIY Landlord Book4.7247 Reviews
  • Marc RiceBusiness Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    @Nathan G.

    I wonder if this was the owner of “Airbnb Automated” on YouTube Shawn R. I’m a host with a large amount of units in Columbus and we always have permission from our owners but we do provide a LOT of steps and information to make sure guests safely/smoothly enter their units.

    Every host is different and it’s tough given the limitations and lack of control that Airbnb provides its host from a resource perspective.

    Marc Rice | Investor Friendly Agent at Reafco Tailwind Team574 Reviews
  • Rental Property Investor · Albuquerque, NM · Member since 2019 · 60 posts · 50 votes
    5y

    @Nathan G.

    Okay I’ll share my recent horror story with Airbnb. I booked last minute and admittedly was just trying to find a basic place to spend the night. Up until this stay I had overall good experiences with Airbnb. I recently booked a cheap stay for one night while staying in Texas during the big freeze. It was a studio rental in a small complex that had several units. The unit had a lock box so I had to manually turn the dial to get in. After several minutes of trying to enter the code I returned to my vehicle to let my fingers thaw. I contacted the host and he apologizes and informs me he gave me the wrong code, no problem I return to the unit and am able to gain entry. As I am looking around for the thermostat I come to the realization that there isn’t one. I contact the host, he informs me there should be a space heater in the room somewhere. After scouring every space large enough to house a heater, I inform the host that his unit does not have one. He apologizes and informs me he will notify the owner. It’s a small unit so I figure I can turn the hot water on in the shower and that will warm the place up some, naturally the shower had no water pressure. I notified the host and he apologized and said the pipes must have frozen, but he was going to let the owner know. I left shortly afterwards and informed him I would need a refund because the unit had no heater. I submitted the refund request the next day and the host informed me he would not refund me because the unit was not advertised as having a heat.... he was wrong, but even if he had been right, it’s concerning that someone would be okay renting a unit in freezing temps without heat. No more Generation Z hosts for me who clearly don’t own the properties they are hosting.

  • Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    5y

    I noticed in Dallas area many are apartments. They make them sound better than they probably are. Iḿ sure most corporate type apartments don allow subleasing or STR, but the arbitragers try to do it anyway. Not sure how long they last, or how often they get shutdown, but sure it happens. Itś not all that hard to pick out the people who don´t really live there in most cases. We see more and more cities that don´t like STR and seem to do what they can to shut it down after a few complaints. They also contract with consultants to find the illegal and unregistered places.

    I can see a lot of places where it might work and that are really geared up for it....places like Orlando or beach resorts...

    I surprised a bit that the apartment operators themselves dont set up a couple of prime units to do it themselves in locations that would not disturb other tenants.

  • Mike LambertPro Member
    Investor · The Americas and Europe · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    Interesting discussion! I will never understand why people base their business model on doing something illegal and especially when they use the property of others with all the potential liabilities they're exposing themselves to (probably without even knowing it)!

    I have solved the problem by investing in short-term rentals outside North America. In places where not only won't be banned or regulated any time soon; they're actively encouraged and supported by the authorities. And, when in the right place, they make more money.

  • Nathan GesnerBusiness Member
    Moderator
    OP
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

     Well, I'm pretty sure every state in America requires homes to have heat. In Texas it's called "implied warranty of habitability" and a space heater may meet that requirement. However, it wouldn't meet the requirement if the space heater is not provided or if the electricity fails.

    I'm sure a complaint with AirBnB would get this resolved.

    The DIY Landlord Book4.7247 Reviews
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Bruce Lynn:

    I noticed in Dallas area many are apartments. They make them sound better than they probably are. Iḿ sure most corporate type apartments don allow subleasing or STR, but the arbitragers try to do it anyway. Not sure how long they last, or how often they get shutdown, but sure it happens. Itś not all that hard to pick out the people who don´t really live there in most cases. We see more and more cities that don´t like STR and seem to do what they can to shut it down after a few complaints. They also contract with consultants to find the illegal and unregistered places.

    I can see a lot of places where it might work and that are really geared up for it....places like Orlando or beach resorts...

    I surprised a bit that the apartment operators themselves dont set up a couple of prime units to do it themselves in locations that would

    not disturb other tenants.

    Cody from San Deigo who owns a bunch of MF in Houston talked about this in a thread were one person rented like 20 or 30 of his units to do the arbitrage then when covid hit he said they walked. 

  • Rental Property Investor · Albuquerque, NM · Member since 2019 · 60 posts · 50 votes
    5y

    @Nathan G.

    The host did give me a refund after I showed him a screenshot of his listing which said it had heat. It was just disappointing that they first looked for a way not to issue the refund instead of taking responsibility and making it right.

  • Huntsville, AL · Member since 2018 · 578 posts · 864 votes
    5y

    If a tenant does decide to turn a property into an AirBNB illegally (assuming the lease clearly states no subletting or use of the property for a business), is there any other legal recourse besides simply evicting them?  I find it hard to believe that would stop them from doing it again.  Can you sue their arbitrage "business" for the entire value of the lease that they violated?  Are there any class action lawsuits against AirBNB in this regard, especially given how widespread this appears to be?

  • Nathan GesnerBusiness Member
    Moderator
    OP
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y
    Originally posted by @Michael S.:

    If a tenant does decide to turn a property into an AirBNB illegally (assuming the lease clearly states no subletting or use of the property for a business), is there any other legal recourse besides simply evicting them?  I find it hard to believe that would stop them from doing it again.  Can you sue their arbitrage "business" for the entire value of the lease that they violated?  Are there any class action lawsuits against AirBNB in this regard, especially given how widespread this appears to be?

    The guest would have no authority to sue. The landlord may have some grounds, but it's unlikely they would pursue that option. As long as the rent money has been paid, the only real issue is a lease violation for subletting. 

    I doubt very many of these Airbnb hosts have actual companies that could be sued. Even if you did shut their company down, they could just turn around and open another one for a couple hundred bucks. It's just not worth anyone's time.

    I feel the responsibility lies with the hosting platforms like Airbnb and VRBO. I feel it is their responsibility to verify the identity of the host and their legal right to rent the property. If you remember, there was a long period of time where Airbnb did not even verify the identity of the host, so anyone could create a false account and scam people. 

    reservations are often made months or even a year in advance. I could easily create a profile, market a property I do not own or even have access to, and collect payments for months before the first guest would show up and discover the house is actually occupied by an 87-year-old homeowner. I just feel their business model allows and possibly encourages fraudulent behavior, just like craigslist with the lack of checks and balances.

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  • Investor · Rowlett, TX · Member since 2013 · 132 posts · 72 votes
    5y

    @Nathan G.

    I shudder when I hear the word arbitrage. I own a few in Dallas and Cleveland and can’t tell you the amount of messages I get asking to make my life easier blah blah. The most entertaining messages to me on BP are the ones that deal with brand new wholesalers, someone looking for a free mentor, and those looking to get into arbitrage.

    Airbnb is just a different beast in itself when it comes to hosts AND guests. Somehow they dominate the market so it pays the bills, but it has always been an interesting experience.

  • Bonnie LowPro Member
    Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
    5y
    We have rented STRs for vacations for about a decade using mostly Air b&b and occasionally VRBO. The fees seem to be higher on VRBO for the same property so we usually default to Air B&B. And while we've never had your experience, we've definitely had some less than stellar rentals (like the one I'm currently typing this from in Big Bear, CA where even the essentials, like towels, have been scant to non-existent.) All in all, though, we've had good experiences. I try to look for listings from Superhosts. And I read reviews from the last year because those seem most relevant. That said, I've heard of more scams lately. Have you considered using Evolve Vacation Rentals? They seem to be a little more sophisticated in terms of the owner experience so I would imagine they do a better job of monitoring the listings for fraud.
  • Real Estate Investor · Chico, CA · Member since 2016 · 248 posts · 105 votes
    5y

    I prefer to deal with Airbnb vs VRBO 

    Both as a guest and as a host. Just based on past interactions and differences in platforms. 

  • Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    5y

    @Michael S.    Once you evict them, that probably stops it.  Then they have eviction on their record and that will make it a lot more difficult or expensive to do it again.

  • Flipper/Rehabber · Memphis, TN · Member since 2020 · 758 posts · 285 votes
    5y

    I'm sorry for your unfortunate experiences. 

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