Pros and Cons of turning your long term rental into an Airbnb

As the popularity of Airbnb continues to grow, many landlords are considering turning their rental properties into Airbnb listings. While this may seem like a lucrative and exciting opportunity, it’s important to weigh the pros and cons before making any decisions. In this article, we will explore the benefits and drawbacks of converting your rental into an Airbnb.

Pros of Turning Your Rental into an Airbnb:

Increased Earnings: One of the biggest advantages of turning your rental into an Airbnb is the potential for increased earnings. According to data from Airdna, the average Airbnb host in the United States makes approximately $924 per month. Depending on your location and the size of your rental property, you could potentially earn much more than that. This can be especially attractive if you are struggling to make a profit on your rental property or are looking for additional income streams.
Flexibility: Another advantage of turning your rental into an Airbnb is the flexibility it offers. Unlike traditional long-term rentals, Airbnb allows hosts to rent out their properties on a short-term basis. This means that you can rent out your property for as little or as long as you want, depending on your needs. Additionally, you can block off certain dates if you want to use the property yourself or if you have other plans.
Control Over Your Property: As an Airbnb host, you have full control over your property. This means that you can choose who stays in your property, set your own rental rates, and establish your own house rules. This level of control can be especially appealing if you have had issues with problematic tenants in the past.
Improved Property Maintenance: When renting your property on Airbnb, you will be responsible for cleaning and maintaining the property after each guest checks out. While this may seem like a drawback, it can actually be a benefit. Regular cleaning and maintenance can help keep your property in good condition, which can reduce the likelihood of costly repairs down the line. Additionally, because guests are only staying for a short period of time, you can identify and address any maintenance issues more quickly.

Cons of Turning Your Rental into an Airbnb:

Legal and Regulatory Issues: One of the biggest drawbacks of turning your rental into an Airbnb is the potential legal and regulatory issues that can arise. Depending on where you live, there may be zoning laws, tax regulations, and other legal requirements that you need to adhere to. Additionally, if you are part of a homeowners association, they may have restrictions on short-term rentals. Before listing your property on Airbnb, it’s important to do your research and ensure that you are in compliance with all relevant laws and regulations.
Increased Wear and Tear: While regular cleaning and maintenance can help keep your property in good condition, renting it out on a short-term basis can also lead to increased wear and tear. Guests may not treat your property with the same level of care as long-term tenants, which can lead to more frequent repairs and maintenance. Additionally, because guests are only staying for a short period of time, you may need to replace furnishings and other items more frequently.
Inconsistent Income: While the potential for increased earnings is one of the benefits of turning your rental into an Airbnb, it’s important to note that income can also be inconsistent. Unlike long-term rentals, which provide a steady stream of income, Airbnb income can fluctuate depending on the season, local events, and other factors. This can make it more difficult to plan your finances and may not be ideal if you rely on a consistent income stream.
Additional Workload: Finally, it’s important to consider the additional workload that comes with renting your property on Airbnb. In addition to cleaning and maintaining the property after each guest checks out, you will also need to communicate with guests, handle bookings and payments, and deal with any issues that may arise during their stay. This can be especially challenging if you have a full-time job or other responsibilities that require your attention.

Liability Concerns: As an Airbnb host, you assume a certain level of liability for any accidents or injuries that may occur on your property. While Airbnb does provide some insurance coverage for hosts, it’s important to understand the limitations of this coverage and ensure that you have adequate liability insurance to protect yourself in the event of a lawsuit.
Strain on Relationships with Neighbors: Renting your property on Airbnb can also put a strain on your relationships with neighbors. Guests may be noisy or disruptive, which can lead to complaints from neighbors. Additionally, if your neighbors are also landlords or homeowners, they may view your Airbnb as a threat to their property values and be less willing to cooperate with you in the future.

Conclusion:

Turning your rental property into an Airbnb can be a lucrative opportunity, but it’s important to weigh the pros and cons before making any decisions. While the potential for increased earnings and flexibility may be appealing, it’s important to consider the potential legal and regulatory issues, increased wear and tear on your property, and the additional workload that comes with renting on Airbnb. If you do decide to list your property on Airbnb, be sure to do your research, comply with all relevant laws and regulations, and ensure that you have adequate liability insurance to protect yourself and your property.