So, you have an investment property that you hope will generate some monthly income for you and your family. Ten years ago you would have immediately tried to find a renter, no questions asked. But now you keep hearing from a lot of your friends that the better way to go would be to list your place as an Airbnb short-term rental.
Your interest is piqued, but you’re not ready to take the dive just yet. “Would being an Airbnb host really be better than just being a landlord?” you ask yourself. Well, there is no “one size fits all” answer to that question. You have to decide if becoming an Airbnb host is the right decision for you and your specific situation.
As an Airbnb host myself, I’ve compiled a list of the 3 biggest “pros” and 3 biggest “cons” of choosing the Airbnb strategy over the traditional landlord route. My wife and I live this life every day, so you can know that what you read will be from actual experience, not just recycled content from other sources.
After reading this article, you’ll have a much better idea which of the two options would be a better fit for your situation and lifestyle.
The 3 Biggest “Pros” of Airbnb Hosting
Alright, let’s start with the positives. If you do decide to become an Airbnb host, these are the benefits that you’ll probably love.
1. More Flexibility
One of the clear advantages of not having a long-term tenant in your home is the ability to block off dates that your home is simply not available. When you block off dates on your Airbnb calendar, those dates become off-limits to any potential guests. Some situations where this is convenient, include:
- You’re planning on being out of town for a vacation and don’t feel like having to worry about having any guests in the home during that week.
- You have friends coming into town in a couple of months, and you would like for them to stay in your Airbnb home.
- A major repair needs to be taken care of, but you’d prefer to wait a few weeks to pay to have the work done.
In each of these situations, you would have no recourse if you were a typical landlord, but as an Airbnb host all you would have to do is block off whichever dates you choose.
You have the power to tailor your home’s public availability to your own personal desires and needs.
This has come in handy for us several times and is one of our favorite perks of short-term vs. long-term rentals. In September, my grandma came down from Missouri to spend the month with us here in Florida.
In the past, she would have had to stay in a room in my parent’s home. But this year, we just blocked off the entire month of September on Airbnb.
We had a wonderful visit and she loved being able to have an entire home to use while she was down! Get started as an Airbnb host.
2. More Control
This may be my favorite benefit of choosing to go the Airbnb route over being traditional landlords.
Control of your home’s upkeep
When you sign a lease with long-term tenants, you immediately lose a great deal of control of your home.
Your home still technically belongs to you, but in practicality, it belongs to your tenants.
‘They are the ones living it in day in and day out, and you get very few opportunities to see how well they are taking care of your home.
How many horror stories have you heard of landlords who have discovered that their home was trashed by their tenants and they are going to have to do significant renovations before they can get their home ready for new renters?
With Airbnb, you get to check on your home regularly…usually every few days.
Control of how you get paid
One of the things that we love about Airbnb is that our guests have already paid before they ever stay in our home. We never have to deal with the monthly stress that many landlords do of trying to chase down tenants to collect their rental fee.
We also love knowing that we’ll never have to deal with the painful process of having to evict someone from our home. There are times that being a landlord calls for having some pretty tough skin.
If you don’t think that you have the personality type to deal with the “Hey, give me my money, or else” side of being a landlord, that’s ok.
With Airbnb, you can still make income from your home without having to deal with those particular issues.
3. More Income (Possibly)
In our area, about the max that we could expect to get for a 2 bedroom, 2 bath house with traditional renting would be about $1,300. Yet, during our best month in the summer we earned $3,700. That’s almost triple the income!
We all know that we often pay nearly as much for a week-long stay in a hotel as we do for our month-long mortgages or rental payment. Why not use that to your advantage?
If you are in an area where there is enough demand, you definitely have the possibility of making more money as an Airbnb host than you could as a landlord.
Related: What is an Airbnb Superhost?
The 3 Biggest Cons of Airbnb Hosting
Ok, now we’re going to turn the tables and take a look at the 3 biggest cons of choosing to become an Airbnb host instead of a traditional landlord.
1. Less Certainty
While there is the possibility of making more money off your house as an Airbnb rental than as a long-term rental, there are no guarantees. One of the benefits of being a landlord is the certainty of knowing how much rental income you will have coming in each and every month. This helps a great deal with cash flow planning, especially with individuals who are on a tight budget.
With Airbnb, your income is more sporadic and less dependable. Your June income could be twice as high as your October income.
This is why for your first year of Airbnb hosting, I recommend rolling over as much profit as possible from month to month. That way if you end up with $1,500 of profit in August, but you go $500 in the hole in September, overall you are still $1,000 in the black.
But if you spent all that August profit immediately, you would be dealing with a stressful September.
After a year of hosting, add up your entire annual income and divide by 12. This will give you a good starting point for setting your average expected monthly rental income.
2. Less Freedom
If you’re thinking, “Wait a second, didn’t he just say a few paragraphs ago that one of the benefits of Airbnb was that you have the freedom to choose when and to whom you rent your home out to?” Yes, I did, but just hear me out.
Yes, it’s true that with Airbnb you are in the driver’s seat when it comes to calendar availability. But there are other ways that Airbnb takes you out of the driver’s seat.
Less personal freedom
In order to stay in good standing with Airbnb as one of their preferred hosts, they want you to respond to all inquiries within 24 hours. They actually brag that many of their hosts respond within five minutes.
With Airbnb, you could be dealing with up to 3 lines of communication on a daily basis:
- Inquiries from interested guests.
- Necessary information for guests who will arrive soon.
- Issues and requests of guests currently staying in your home.
Most days, we don’t feel like the number of messages we receive is overwhelming. But some days it just seems like the messages come flying in from every direction.
Less social freedom
And don’t forget about cleaning your place in between stays.
Once you become an Airbnb host, your social schedule will forever need to be arranged around your cleaning schedule.
Your friend wants to go for lunch with you on Wednesday? Awesome!… Oh, wait, you have a guest checking out that morning and another checking in that afternoon. Lunch isn’t going to work. You’re going to be hustling to turn your house around.
That brings me to another point. If you don’t have a job that will allow you the flexibility that you will need in order to clean your home in between stays, then you either need to choose a traditional landlord route or you need to find someone you trust who could be a dependable co-host for you.
In our situation, my wife is a stay-at-home mom, so she is able to manage all of the online tasks as well as handle the cleaning duties. Airbnb is a fantastic fit for our lifestyle, but it may not be for yours.
Less travel freedom
Do you like to travel? We do too! But as Airbnb hosts, you can’t just go out of town whenever you want. You either have to make sure to block off the dates for your trip well ahead of time or make sure that you have a co-host ready to take care of the place for you while you’re gone.
In summary, Airbnb requires that you be more hands-on than you would need to be as a traditional landlord. As a landlord, you can live your own separate life and collect your monthly rent once a month.
Not so with Airbnb. It has many benefits, but in order to experience them, you will have to be willing to lose a measure of freedom in your daily life.
3. Less Early Profits
As a landlord, you can rent out your home as an empty shell, with the exception usually of the major appliances.
That won’t fly with an Airbnb.
You have to fully furnish your home: from furniture, to beds, to towels and sheets, to toiletries, and possibly even kitchen supplies.
And with Airbnb’s competitive landscape, you can’t just pick up any collection of old, unattractive items. Airbnb got their big break by making a conscious choice to put a big focus on homes with beautiful photos.
Do you have to break the bank to get a cute house that will look appealing on photos? No. But you will certainly have to spend more money up-front than you would if you were simply trying to rent your space to long-term tenants.
Now, admittedly, your up-front cost will be much lower if you are only planning to rent out a room in your personal residence on Airbnb, rather than an entirely separate, home. But the purpose of this article to consider the best use of an investment property, so renting out a room in your home doesn’t really apply to this discussion.
If you’re interested in trying to get a small business loan to fund the up-front costs of your Airbnb, it is possible but will likely be a challenge.
Being an Airbnb host can be great! Being a landlord can be great!
To decide which one is better for your situation, you need to consider which of the pros and cons matter most to you.
If you do decide that Airbnb is the way you want to go, then please use my link to sign up and start building your listing today!
Also, be sure to read about the 3 Airbnb Hacks That I’ve Learned After 6 Months of Hosting.