TREAT YOURSELF
If you want to give hosting a try, consider treating yourself to a holiday – even if only just for one night – staying in someone else’s place using airbnb.
Have a look at the listings for your area too. They are your competitors.
Airbnb offers hosting tips, but the main thing to remember is that the hosting role is closer to hotel concierge than a landlord.
And the first time you try hosting?… pick a guest with positive reviews, and have a friend with you when you welcome them.
Would $400 per week help out with paying the mortgage… or that holiday you’ve been trying to save for?
How about $1,600 per week?
These are the sorts of numbers on offer through airbnb:
- $800 per week for a two bedroom apartment in Fortitude Valley, QLD
- $250 per week for a shared room in St Kilda, VIC
- $475 per week for a private room in Perth, WA
- $1,700 per week for a three bedroom house in Randwick, NSW
Hosts earn anywhere from a few thousand dollars per annum for irregularly sharing a spare room to tens of thousands offering a house or apartment full time.
Could you take advantage of this opportunity? Should you? What are the risks?
To airbnb or not to airbnb, that is the question.
(Not really. There are alternatives, like Stayz/HomeAway, and Roomorama, but we’ll use airbnb as the example, mainly because they offer property damage protection.)
The upside is simple: money.
If you’re struggling to pay the mortgage, or the rent* and you have a spare room, or could vacate the property occassionally (even stay with your parents for the odd week), offering short term accommodation is one way of extracting some cash from your property.
Some people fund their holidays by renting out their home on airbnb and using the money to pay for holiday accommodation (often also on airbnb). Some even hand over their bedroom and sleep on the couch (though it would be advisable to let customers know this up front, to avoid embarrassment).
[* n.b. if you’re renting you would probably need your landlord’s permission]
So, what are the downsides?
Well, first up, how do you generally feel about meeting new people? Are you comfortable with the idea of having strangers in your home when you’re not there? Would you be happy to clean up after them? If these questions aren’t a problem, then short term rental may work for you, but first make sure you understand the risks…
The risks of renting out your home
As one blogger said, “When you host 42 guests over the span of 8 months … you’re bound to get at least one nut job”. In other words most people are fine but you will need to have a plan in case you come home and find a hundred people partying on your lawn or meth pipes in the living room (the short version being, ‘call the police’).
Some people refuse to host anyone who doesn’t have positive reviews from other hosts. This of course means you would miss out on new Airbnb users.
The biggest financial risk relates to insurance because most insurers in Australia don’t cover short term stay hosts and their guests. Even most landlord insurance only operates where tenants stay for over 90 days.
Airbnb offers an “Airbnb Host Guarantee” where it “agrees to pay you, as a Host, to repair or replace your Covered Property damaged or destroyed as a result of a Covered Loss…” etc etc but this wouldn’t protect you if a guest suffered personal injury (or death) or property damage within your home. So if they trip over the rug, smash their laptop and damage their back, then you could be in big trouble.
So if you are considering renting out your place, contact your insurer and tell them exactly what you’re considering doing and ask them if they cover it.
If they don’t, have a look at IAG’s Share Cover, a special purpose insurance policy for “those who are renting out all or part of their home on a recognised platform such as Airbnb or Stayz”. The brilliant thing about this policy is that you pay on a per night basis – only when the place is rented – and you can simply add the $5 or $10 per night to the rate you charge.
Other things to consider before you start:
- as we noted above, if you are renting, you are probably required to have your landlord’s permission
- if you are in a strata building, you may breach strata by-laws
- you could be risking you neighbors’ ire
- you must be careful what you leave lying around, not only because you risk it being stolen. Even leaving papers out in the open could risk identity theft.
What are your thoughts?
Have you ever rented out space using airbnb or one of the other short term stay sites? Have you used one of these sites to book holiday accommodation?
Join the conversation — leave a comment below and let us know what you’re thoughts are.