Will long term Airbnb replace traditional renting?
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Will Airbnb become a sustainable alternative to the traditional long-term lease?
The past decade has seen a rise in popularity of the online marketplace and hospitality service Airbnb. Since its inception in 2008, the sharing service has taken off as the leading alternative for short-term accommodation with over 4 million residential properties listed worldwide.
With Airbnb hosts now electing to offer their homes for long-term guests, this leads us to question; is the popular service heading in the direction of being a sustainable alternative to a traditional lease?
To compare the two different offerings, we need to consider the benefits and negatives to both the person who owns the home and the individuals who are in need of accommodation, as well as a range of other factors such as safety and financial security.
Control over who stays in the property
As a host, individuals are given a considerable level of control. Airbnb hosts are provided the flexibility and control over factors such as date availability and prices, while also having the full freedom to choose who they wish to stay in their property. Airbnb also provides the option to remove guests from the home if they break any specified house rules, however, the potential for undesirable guests is Airbnb’s shortfall.
A key part of a property manager’s role is the process of taking the time to choose a suitable tenant, who has references to demonstrate how considerate (or inconsiderate) they are of other people’s possessions, and who also have the financial means to cover the fees. Providing a bank statement or proof of income are documents that need to be supplied to be considered for a lease in Australia.
The rental process also adds an element of safety that Airbnb cannot match. The specific requirements, such as personal and employment references, are verification that they are appropriate or suitable to lease the property.
Most important is the overarching safety risk that comes with any online service. For example, there is the underlying risk of danger at the hands of hosts or even neighbours, as these people are at the end of the day, strangers to you, and all you have to judge their character by is a handful of online reviews.
￼￼You may not be making as much money as you think
For a landlord, a tenant is more financially stable than an Airbnb guest as they have signed a lease to pay for a fixed term and an upfront bond to cover any damages. This is opposed to an Airbnb security deposit and no legal obligation for a guest to stay and pay the fee. If a guest leaves, it is not their responsibility to maintain the property as a tenant would when vacating a property.
Furthermore, if a guest leaves a review about a bad experience they had at an Airbnb home, it can negatively influence other guests from booking, resulting in loss of income.
There is also the time spent cleaning and maintaining the property for guests. This may not be possible for hosts if they have full-time employment or a family and therefore they will need to pay for these services, which may not necessarily be covered by the Airbnb cleaning fee.
Damage to the property
Although Airbnb provides a ‘Host Guarantee’ of up to $1,000,000, the fine print states that this does not protect against reasonable wear and tear, and evidence of damage is required to make a complaint.
For example, if somebody damages your benchtops and you don’t have proof that the damage wasn’t there before they stayed at your property, it’s your word against theirs, which can be a costly exercise.
At the end of the day, what Airbnb doesn’t offer is the daily peace of mind that comes with having a property manager. If there are issues with maintenance or damage, the property manager is the point of communication for both the tenant and the landlord.
Airbnb is undeniably a fantastic alternative to traditional short-stay accommodation options, offering a home away from home for travellers. However, from a real estate perspective, managing property is a time-consuming process with many elements involved. Homeowners may save money upfront with Airbnb, however the experience and services a property manager offer are invaluable. They offer the peace of mind that your property is well taken care of, leaving you more time to focus on the essential aspects of life.
This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.