OK, maybe things are different there. I can see how things could be different in places where the ratio of multi-family to single-family dwellings is very high.
London has a limit of 90 days rental on the platform. It seems it could get complicated throwing rental arbitrage in on top of managing multiple platforms to skirt the 90 day auto shut down or top of other considerations.
how are you going to cover costs for other 9 months @Bosty64 if in London ?
if you are based in the UK you will know that standard ASL leases have clauses that forbid sub-letting
I don’t think the OP is suggesting doing anything like that!
We rented a house in Sydney under this scenario. Young guy was renting a mansion that was due to be demolished (Sydney, sigh) and it had harbour and bridge views, amazing spot. But terrible furniture with cheap bedding and very sparse kitchen. Still it was a rare chance to stay in such a snooty suburb in a 12M home. We ended up meeting the owner who dropped round randomly and he didn’t mind at all that it was being sub-let. It was a pretty casual arrangement and as he was demolishing the house he didn’t care what went on.
I didn’t necessarily think he was either, I was just answering his question as to why those things were even mentioned. I don’t know the OP and there are certainly a lot of people who think rental arbitrage will be some big money maker for them without considering all the expenses, licensing, insurance, etc, they will need to pay for. They also believe Airbnb’s PR about the million dollar protection, without knowing that it normally involves a lot of hassle to claim for damages and that they very well might have their claim rejected.
In fact, that’s exactly what that girl who listed my neighbor’s place without their knowledge or permission said to me when I asked her why she thought it was okay to do that, and what she would have done if those 12 people who the owners had told her to boot out had caused major damages- she replied that it wasn’t any worry because Airbnb will “totally cover” any guest damage. She didn’t realize that I’ve been a host for years and know way more about how Airbnb deals than she does. When I told her that was very naive, that hosts often have a hard time getting damages covered, even minor ones, let alone house trashings, she snottily replied that “I guess we’ll just have to agree to disagree”, as if it were a matter of opinion.
But if I was still interested in the idea, I wouldn’t attempt to cover costs for the other nine months, I’d simply try and find a place, and an agreeable landlord, outside of London. But I won’t do that, as I felt the idea might be workable in my immediate area, where I have the experience, contacts, local knowledge etc. I would not have the same confidence in a location that was even 9 miles away (closest place outside of London).
rather confused…if you are no longer interested in the idea why did you post here to ask about it @Bosty64
Well I think the costs (licensing and insurance) are the same whether you own or do arbitrage. (A funny term i’d never heard of before seeing those “gurus” on YouTube). I agree there’s a lot of hype about that format.
Not surprised to hear that young woman believes the air bnb hype. When we were getting insurance quotes my broker also believes that Airbnb provides good insurance. I didn’t bother to tell her otherwise.
I’ve looked at a couple of those You Tubes and in the U.S. they all seem to be touting the “amazing loophole” of setting up an LLC to be the lessee, and calling the guests “LLC representatives” or “documented occupants” or some such.
Landlords aren’t stupid, and I see that commenters are asking how to get around new LLC lease clauses that expressly prohibit STR. And many leases simply ban commercial use of an apartment or house. Generally, there’s commercial space and there’s residential space, with some allowances for home businesses and permitted subletting, usually required to be longer term. If a host is trying to lease a house to STR, there are also zoning prohibitions to consider.
As someone who has been an LTR landlord, I would never allow an STR operation due to liability exposure. Even if all these rentalpreneurs have purchased adequate liability insurance (stifling laughter here), if there is a disaster lawyers will be looking for pockets and assets to go after.
Just asking for trouble all around !
I know two separate individuals that tried doing this and both ended badly. One of their first bookings showed up with a moving van and stole every last thing out of the apartment. They used a fake ID and stolen credit card. Airbnb covered only a few small items. They didn’t have the money to replace everything and were still stuck in a lease they couldn’t afford.
The other person did have permission from the landlord to str the townhouse. They spent a bunch of money furnishing and decorating the space and ended up running a rather successful airbnb. Then the landlord started to crunch the numbers on how much money the airbnb was making. When it came time to renew the lease it was more than double leaving almost no profit. They decided to walk away, the landlord offered to pay them a small amount to keep all the furnishings and then proceeded to list it themselves on airbnb.
I had a roommate in 2013-14 then I realized I could do Airbnb and make more money with fewer people in my home. So we discussed it and she vacated on good terms. I was also giving her an insanely low rate to help her out so if course she understood. I also stayed in an Airbnb with that kind of situation. In the past, this person would have had roommates and these days Airbnb is far superior. Sadly that’s another way that Airbnb makes housing less affordable for locals.
There is also the scenario where some areas have such strong tenants’ rights laws that homeowners who used to rent out rooms to locals long term got burnt so many times by roommates who stopped paying the rent, or were unacceptable housemates, and unable to evict them, that they decided to go to strs.
I have friends who had a long term renters who didn’t pay the rent for months, but the law in Canada was that you couldn’t evict a tenant during the winter months. An Airbnb guest from Canada told me the same thing happened to her. The roommate/tenant stopped paying rent as soon as “winter months” offically started and my guest couldn’t boot her out until April. This tenant knew the landlord/tenant act inside out.
Here the laws favor tenants so much that if they have children in school you can’t evict them during the school year. I’ve heard horror stories of tenants with kids signing a lease over the summer and only paying one month’s rent during the entire one year lease. One of our city council members was even trying to make it illegal to run a background check for potential tenants. Luckily the FBI found out she was taking bribes before she managed to pass any new laws, including an airbnb ban.
I think as with short term lets it’s all about vetting your tenants well.
I’m a long term let landlord . I credit check my tenants, take up previous landlord references, see them in their current tenancy and ask for 12 months bank statements to see they have been paying their rent on time.
With the scenario you mention these type of tenants are likely to not pass my vetting system.
Do you want to suggest that anyone doing this would be honest enough to have all the proper licenses and insurance? It’s perfectly legitimate to bring these issues up since a lot of people wouldn’t bother. The result could be a great financial burden on the actual owner of the property. I think most people know that people renting property often cause enough headaches to the owner without having a second tier of worry. As a homeowner, I’d never permit it in a million years.
Guests also sometimes end up being negatively affected. Some guests have been told to vacate immediately by the homeowner when they find out their “tenant” has been subletting.
And many of those who turn around and list on Airbnb without the owner’s permission instruct the guests to lie to neighbors, building management, or anyone else who questions their presence there, saying they are a friend of the tenant, which is unconscionable and can make the guests highly uncomfortable and uneasy.
I’ve read of guests being instructed to go down an alley near the rental to look for a key safe that is attached to a bike rack or something.
Gosh these threads take on a life of their own don’t they?!
That’s the nature of forums.
Particularly amusing this one though… I mean some vivid imaginations out there. I mean I say I’m thinking of doing x, what do you all think? And then someone is imagining me not only doing x, but also y, z, b, c and d, and being unethical, illegal, ignorant and stupid as well. I can understand later on the original message getting blurred and forgotten, but this is at the beginning. Written by someone who has actually read the question. I mean why confuse the question with all these hypotheticals I don’t get it