Property owners are turning to AirBnb, but is it worth the hype?

Airbnb has taken the world by storm. Founded in 2008, Airbnb is a marketplace for people to advertise their homes for short-term rent. This allows the homeowners to make additional income from their property, which could be their primary residence or an additional property they own. Some homeowners rent out a room in their home, while others rent out entire properties. The question is whether this is worth it and what the Pros and Cons are to consider? 

There is a greater financial risk 

If you run your property as a long-term rental, you are more secure in your income (Provided you have a good tenant). With an Airbnb, you are taking on more risk because your occupancy rate is not guaranteed. An Airbnb usually has a greater potential reward because you usually rent your property as a holiday home. The greater potential reward comes with increased risk because you do not know the occupancy rate in advance. Some months can be better, and fluctuations will undoubtedly be greater than a long-term rental. 

It will take more of your time 

An Airbnb will take more of your time to manage. You may have tenants coming in every week and must ensure that the place is well kept, tidy, and ready for occupancy. Remember that each new client may be staying at your home for the first time, so you need to do the work to make a good first impression every time. Additionally, because many people book in at an Airbnb for a holiday, their expectations could be high, and they may be more demanding with their requirements. 

It is seasonal 

As discussed, the occupancy rate is unknown; however, because Airbnb’s are primarily used for holiday purposes, you should see an uptick in occupancy over the holiday seasons. Similarly, you should expect a lower occupancy rate during certain months of the year, which is normal. The holiday months can be very lucrative, especially if your property is in a holiday friendly destination, however the quiet months can be very quiet. 

Conclusion 

There is potentially more money to be made running an Airbnb than a long-term rental. This potential reward comes with more risk: Your occupancy rates are not guaranteed, the business is seasonal, and it will require more of your time and effort to run it well. If your property is in a holiday-friendly destination, it is certainly worth considering, but just make sure you do your homework first, have enough time to manage the business, and enough cash to see you through the lean months.