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The Pros and Cons of Turning Your Rental into an Airbnb

Real estate is all about creativity. Homeowners are continuing to explore alternative methods of generating income from their properties. Real estate is no longer so black and white. Residential real estate isn’t strictly reserved for occupancy by owner or long-term rental by tenant. Online rental marketplaces like Airbnb now allow for short-term rentals on a mass scale for terms of anywhere between a couple of days and a couple of months.

While there are many benefits to this newer method of income, Airbnb isn’t for everyone. Many prefer the more traditional method of renting out their properties for a few reasons. For any homeowners who thought they needed to sell a house fast because it wasn’t making enough money, consider this new strategy.

Here are some of the pros and cons of ditching the old model of property rental and turning your rental into an Airbnb.

Pro: More income

Airbnb pricing is more in line with hotel pricing rather than the real estate market. What that means for you is more money per day than you might make renting out your property on a long-term basis. If you have mortgage payments or other debt, renting on Airbnb could be a great way to pay your debt down quickly.

Con: Less stability

The benefit of long-term renting is stability. Once you’ve rented your house out for a 12-month term or longer, you have the security of knowing that you’ll be able to collect rent for that amount of time. With Airbnb, it’s not guaranteed that your house will be rented out every night that it’s available. Also, because Airbnb is so new and disruptive, your income from Airbnb will always be at the mercy of ever changing regulations of municipalities. It is possible, however, that even occasional bookings can make up the income lost on additional taxes and vacancies.

Pro: Property protected by Airbnb

Airbnb has programs and required deposits in place that can help you recoup the costs of any repairs you might have to do as a result of renter damage. When you rent long-term, you are the one who is solely responsible. That means for the most part, any damage incurred by your tenants will be your responsibility to fix if you want it fixed.

Con: Wear and tear is more likely

With many people coming and going through your home, you might find that damage is more likely. When this occurs, Airbnb’s protection program may help, however not for every kind of damage. You’ll likely need additional insurance to ensure that you’re not paying out of pocket for house repairs. Also, this wear and tear has the potential to scare off potential buyers if you’re looking to eventually sell your home.

Pro: You can meet new people

If you’re the type of person that loves being around new types of people from all over the world, Airbnb is a great way to do that. Of course, you don’t have to engage with your guests, but the best hosts are typically the ones who go above and beyond to make their guests stay as fun and comfortable as possible.

Con: You can’t always trust renters A huge benefit of long-term renting is the selection process. In most cases, if you price and market your property right, you can select the tenant that works best for you. Airbnb isn’t so personal. The process is more or less automated and anonymous, meaning aside from the ratings, you can’t really ever know who you’re letting into your home. Like any online marketplace, users could try to game the system to evade paying fees they see as unnecessary.

This post was provided by Brotherly Love Real Estate.

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