Today we want to share a cool way to put on some ‘landlord training wheels’ of sorts by renting your space(s) out on AirBnB.
Have you ever thought any of these questions:
What is the fastest way to be a landlord?
How can I learn to manage property and tenants?
What is a lowest risk way to invest in real estate?
How do I know real estate investing is for me?
We are sure there are countless other questions as well…
Did you ever think it was possible to become a landlord starting tomorrow? Enter Airbnb…
Many people, including many LLP readers, have goals to become real estate investors and even landlords! We realize that everyone is not at the same stage of life or has the same financial capacity. What if we told you, you could test your hand at landlording as soon as next week! That’s right… it’s totally possible. Nooo you don’t have to have your 5-20% down and 3 years of tax returns. Literally after a few clicks of your smartphone, you can be on your way to generating extra dollars. AirBnB is perfect for the investor-to-be who is eager to get started, especially if your ambition is deeper than your wallet. This type of arrangement works well for homeowner that are looking to rent out a spare bedroom. It could also work for someone renting a property with a lease that has lenient subletting or the guest length of stay restrictions!
AirBnB is an online platform that allows property owners to lease out either a portion of their homes or the entire property to other individuals. The site is revolutionary because it democratized the short term rental industry that has historically been dominated by hotels, bed and breakfasts and hostels.
The home page allows you to sign up, log in or search for available listings. Once logged in, the host can create a listing, view a dashboard and check any past or future reservations.
The dashboard presents recent notifications and a communication history with past and future residents. This is only visible to the host/person’s whose account it is.
Each person registered on AirBnB has a profile. It is a repository of information about the person, where they live, how long they have been on the site and tells a bit about them. Reviews the person received are also visible from the profile.
In the listing, provide basic information about the space, amenities, prices and a description of the available space. Also highlight any house rules you would like to maintain (eg. Wash all dishes you dirty in a reasonable time frame, keep common areas tidy).
AirBnB verifies IDs to provide a level of safety for platform users. Verification process:
- Upload photo of government ID
- Connect account to another social media account or platform (Facebook, Google, LinkedIn)
- Upload photo to AirBnB with phone number and email address
Now, by no means are we implying that the AirBnB process is anywhere near as robust as a full criminal, credit and background check that you would perform for potential tenants. The verification process is a good attempt, but we do suggest that you screen the potential visitors before allowing anyone to share your space.
Comparison of traditional landlord practices vs AirBnB hosting
|Traditional Landlord||AirBnB Host|
|Rates||Monthly||Nightly or Monthly|
|Identity Verification of resident||Background check
(at landlord’s discretion)
|Verified profile (matches driver’s license and social media persona)|
|Inclusions||Appliances, some utilities||Fully stocked home + towels, bed linens, small toiletries
Similar to hotel
|Legal||Lease||Online contract, money held in escrow until 24 hours after guest check in|
|Location disclosure||Yes, in advertisement||No, address is kept private until reservation booked/paid|
|Showings||Yes||No, typically booked based on photos alone|
|Leasing Process||Interview tenant||Options: (1) allow direct booking or (2) require potential visitors to submit reservation request to learn more about them|
|Security Deposit||Typically equal to 1 month’s rent||Optional, at host’s discretion
AirBnB $1M Host Guarantee
Tips to get started
- Get reviews [Suggestion: stay in a property as a guest! The positive feedback is better than no feedback.]
- Take beautiful photos
- Draft clear and concise house rules and directions for guests
AirBnB adds fees over the fee you charge. You keep the amount you charge, unless you choose to absorb the fees.
When the person checks in, the money is transferred to the host.
All in all, We’ve had a positive experience with AirBnB. We would definitely recommend it. We’ve hosted travelers in multiple cities and for various lengths of time.
Airbnb has been a brilliant method to supplement our income. If you are looking to test your hand at being a landlord and property management, this is a lower risk option. We were able to see if we actually enjoyed managing rentals long before we actually purchased a property specifically for rental investment.