As a landlord, your primary objective is to protect your investment and have it create income. While allowing your tenant to offer your home as an Airbnb may sound counterintuitive, let’s take a look at some of the benefits and potential downfalls of doing so.
The Potential Positives:
- Tenant Retention. In Denver’s current economy (high rents, tight job market), many people are looking for a supplementary income, and your tenants are likely no different. Airbnb offers an opportunity for them to make that income which may allow them to stay in the property longer.
- High Standards. Airbnb requires high standards for a property to be considered a host location. It must be kept clean, safe and in good working condition. The ownership of caring for the property becomes part of the tenants mindset when they are tied to the profit (or lack thereof) generated. As long as there have been landlords, they have desired tenants to care for the property as though it is their own. Airbnb creates that because low ratings result in fewer bookings (less income), and even penalties.
- Less Wear and Tear. Airbnb’s high standards mean that the place will always be kept clean and not only that, it will be cleaned thoroughly every few days. Dirt, grime and mildew are some of the biggest culprits to wear and tear as is moving furniture. With Airbnb you won’t be moving furniture often and therefore won’t be scratching walls and denting doorways.
- Additional Income. Not only could this create additional income for your tenant, consider negotiating splitting Airbnb profits with your tenant. A small override could give you a bit extra while also allowing your renter to make the income they desire.
- Morale. If a tenant is able to use Airbnb to create additional income, that flexibility can create a morale booster that, again, keeps the tenant renting from you. With tenant turn over being the highest landlord expense, renter retention is important.
- Built in Protections. Airbnb builds in safety features such as ID verification and insurance coverages to help protect both you and your tenant. You can add in cleaning fees and even security deposits if desired to help mitigate any costs such as carpet spills or a broken dish.
The Potential Negatives:
- HOA issues. Airbnb may be in violation of your homeowner’s covenant. Double check the rules before hosting the property.
- Neighbors. If not in violation of HOA, it still may be an issue for neighbors who don’t appreciate additional cars or visitors and should be taken into consideration.
- Background Checks. While Airbnb does offer protections, they don’t perform background checks on guests. They instruct hosts to “trust their gut” and rely on social proof in the form of reviews, rather than checking the visitor’s background. While this doesn’t seem to be an issue for hotels, it could be an issue for a residential, and likely shared, home space.
Empowering your tenants to create legal, safe, and property-enhancing methods to generate revenue protects your investment and creates long-lasting income, but, with many things, can also have some negative effects. If you feel offering Airbnb as an option for your tenants, using a property manager may be the best way to leverage it for ideal results.
Select Property Services is a premier Property Management Company serving the high value neighborhoods of Denver. Whether short-term, vacation, or long-term leasing, we support you with friendly, communicative and cost efficient property management services. Call us today for a free consultation or quote.