You will need to purchase liability insurance in case something happens to your Airbnb guest(s).
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As @Zandra and @Robert_Dudley have said, this in itself proves that you arenāt ready to be an Airbnb host. Hosting means confronting guests who are breaking house rules, stressing out when you get a bad review, dealing with guests who party in your rental, dealing with horrible messes, the strain of cleaning for back to back rentals ā¦ and much, much more.
If youāre stressing just at the thought of being a host, Iām afraid that itās not for you.
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Exactly. Iāve turned several friends off from turning their whole house rentals into Air properties and thereās a reason I keep my LTR as is. Itās not worth the risk in many scenarios. And while a private room or a guest house on property can be a perfect hosting scenario, only if itās worth the money or legal in your situation. Most of the problems I see are when theyāre breaking rules or not on-site. Her landlord has the right idea, lol.
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If the agreement is you will pay an extra $400/mo for any month you rent the extra property, thatās one thing. If it is $4800/year more thatās different. First, can you afford the extra $400 on your own if you decide to stop ABB? if not, this is not a sound decision. If you have an escape clause, in other words, the monthly rent is composed of standard and ABB components, and with a 30 day notice you revert to standard only, then take the risk. If the landlord wonāt agree to this he/she is voting against it. This proposition is only good to neutral for them. If they balk, then I wouldnāt rely on them
Next are the numbers, how many weeks a year will you actually be able to rent? Does you area have a season? If so, what percentage of the year do you expect to be able to really rent. Say your season is 5 months with full occupancy, 3 months at half occupancy and 4 months sporadic. Your added cost is on approximately 6 months and two weeks or about $780/rental-able month. At $100/per night you are for about 8 days a month to cover an overhead cost of 28%. The overall cash you might hope to capture would be in the $14K range. If you occupancy rate varies much at all, then your profitability drops because you are talking all the risk. It also means no vacations during those months or you are going to push up your overhead even more. Pretty steep in my mind.
If you decide to drop the ABB concept for any reason, then it seems you have just given your landlord a $400 monthly boost. So getting that back if you decide to forego the ABB āexperienceā would be necessary in my mind. If the landlord is not able to see this as āextra pieā then they are too greedy and I would not trust them. There is NO additional risk, from what you stated in later posts, for them, itās just more money.
I use ABB to rent out one of our two homes. We are in an early retirement model where for half the year we are working in one place and cuddling the grandkids the other half. We are going to have the costs of each residence, period; we can afford not to ABB. ABB makes great sense for us as there are no additional costs. Basically, the only outgoing costs are a modest bump in insurance with a great company (Erie Insurance Group) and our cleaners. Otherwise it goes to our bottom line.
This doesnāt seem like a good/fair deal.
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Have we talked her out of it Yet? 
Now I am wondering if her landlord will raise the rent on her anyway, Air or no Air. I certainly hope not.
By the way, I am so happy that Emily and Jackalaus are back, two of the smartest members we have here. Love you both!!!
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And hosts like you and me and many here who just make it as a part of life to live more comfortably are the hosts doing it on the up and up and give it all a good name. But itās the get rich quick people, the desperate people, the ones who donāt think it through, or break the rules; theyāre going to ruin it for all of us.
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Iām not stressing over being a host. Iām stressing over the $400/month rent increase without knowing whether I could recoup the cost.
Devilās advocate hereā¦if she could net $90 a night and book an average 10 nights a month she could probably make enough to make it worth it. There are a lot of little towns in the west (Aspen, Moab, Santa Fe) that donāt really have a season and they attract people year round. Itās not inconceivable that you could make an average of $2000 a month year round. Itās just that you wonāt know until you try and even then, the market could change at any time. People post here all the time saying ābookings have dried up.ā āno more airbnb allowed in my cityā āI got a warning from the city inspector.ā You have to protect yourself with the landlord first.
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Not attempting to get rich quick. Just want to have another source to help with tuition/rent until we decide our next move.
Regardless, I think itās a bad idea. Sheād be cooperating with someone who is clearly trying to take advantage of her. Those arenāt healthy dynamics. For one thing, sheāll be signalling to the owner that sheās someone who can be taken advantage of. Who knows what she might try next.
Never forget, under the fancy clothes, and regardless of the fancy technology, cars, planes, tvs, computers, smartphones etc. etc., under the hood, humans are still animals. A weird hairless brand of ape that climbed down out of the trees, and with an overweening sense of their own importance. But just animals nonetheless.
Hereās an offer that was suggested by the property manager ā¦ $200 increase a month with ABB permitted, if we sign a 4 year lease. Our current lease expires in 16 months. The prop manager doesnāt know yet if the owner will agree, she just threw it out there to hear our thoughts.
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Is she raising the rent anyway? This still isnāt clear?? Where are you? Los Angeles college town??
Four year lease??? No way!!
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OKā¦I would do this if the alternative was to be miserable with a roommate.
You just need to really do the math and maybe counter offer the property manager again. I am guessing the $400 increase is because the owner of the property may no longer qualify for regular landlord insurance, and now will need to purchase a policy that covers short rentals. This is going to increase his insurance costs. Also there will be the added wear on tear of his property. Even if there isnāt ādamaeā - itās still wear and tear.
I only skimmed through all the posts, so I donāt recall the exact offer that you were given. Depending where you live, sometimes there is hardly an increase in electric or water anyway. I once moved into someoneās basement and she said her utilities hardly increasedā¦strange. But whatever.
Everyone should be paying themselves or a housekeeper to clean. You can search more on this forum as to why some people charge separate cleaning fees. Whether it is built into your nightly rate or not, you need to pay for that. So letās say it takes you 2 hours to clean the unit. Then at least pay yourself the going rate that you would have to pay a housekeeper. Deduct that amount. The rest leftover is what should be considered when covering that extra $400.
I would not rent out to 4 peoiple to āattractā more travelers. Keep it simple. Two people max as couples are easy peasy. Throw in a couple of toddlers and it may not be worth it for what little extra you may receive.
Figure out what youād need to set aside as self-employment tax. Run the numbers. Err on the conservative side. And see how many nights each month you would need to rent out to cover all costs and taxes.
You also need to figure out if Air is collecting lodging tax on your behalf or if you need to collect this from the guest.
Airbnb guests stay a few days and they are gone. Roommates are there in your face every day and can make you miserableā¦
Good luck!
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I was typing out my long reply and hadnāt seen this post yet.
The property manager doesnāt have the ownerās permission and is just throwing out numbers? Iād deal directly with the owner if possible and negotiate that way.
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But the $400 minimum hanging over your head WILL make your hosting experience exponentially more stressful. You will be at the mercy of guestsā reviews to the extent that I canāt imagine the resentment toll over a couple of years.
But you sound pretty determined to do it so what if you trial it for 8 weeks. With the new listing bump in search results and given that we are moving into Spring, you will likely make more than $400/month and have some experience dealing with guests to decide whether this is something you want to pursue. If your calendar is open for the next 6 months and you start getting bookings into summer/fall, maybe that signals to you that you can make the plunge.
If she decides after 8 weeks that she doesnāt want to do this and has to cancel all future bookings, does she get charged $100 per booking or is she covered by extenuating circumstances if she says her landlord shut her down?
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Great question! Never thought about that. Look forward to the answer. Thank you.
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Like most everyone had said!
Donāt donit if rent is going up by $400
Youāre likely to end up the loser with a private room listing.
There isnāt as much money on airbnb as there used to be!
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Four years is a long timeā¦
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