It’s holiday season and you may well have stayed in an Airbnb rental this summer. But have you thought (and perhaps hesitated) about letting out your home on Airbnb while you’re away?
For the past three years, my wife and I have rented out our London home on Airbnb to fund our holidays. Although we’ve had the odd broken glass, and one particularly demanding set of guests who cranked up the heating to 24 degrees, overall it’s been a smooth ride — adding significantly to our holiday coffers.
Airbnb has enjoyed phenomenal growth in Britain and in London specifically, from 1,000 rentals per week in 2013 up to around 20,000 per week in the capital in 2018, according to insiderairbnb.com. Increasingly, Airbnb competes directly with hotels and even the long-term rental market.
As the number of properties listed on Airbnb has increased, the price you can achieve on Airbnb rentals has fallen. (We’ve certainly noticed this with our own home.)
But you can still earn significantly more per day than from a long-term tenancy. And using Airbnb — or one of its competitors, such as booking.com, onefinestay.com, wimdu.co.uk or homeaway.com — gives you complete flexibility and control with how and when you rent out your home.
How much hassle is it really?
It takes us about a day to prepare the house for guests before we leave; and another day to get it back to normal when we return. Besides cleaning and changing linen, you need to clear out the fridge and a few kitchen shelves, plus bathroom storage, bedside cabinets and at least one wardrobe in each bedroom. We dump the contents of these in the loft, and lock things of sentimental value in a cupboard. Put away toys your children care about, too, especially those with small bits, as chances are you’ll otherwise come back to missing pieces. And stock up on loo roll, soap, dishwasher tablets and olive oil.
We have printed a detailed house guide, with everything from the wifi code and rubbish collection days to appliance manuals and our list of favourite things to do locally. That saves you from having to field guest questions from your sun lounger.
You also need an annual gas safety check (£90; find an engineer at gassaferegister.co.uk), working carbon monoxide and smoke alarms on every floor (£50) and do a fire-safety check (you can do it yourself; see this government booklet).
Can I pay a firm to do it for me?
A whole industry of ‘do it for you’ intermediaries have sprung up to meet the needs of homeowners who want to use Airbnb but can’t be bothered to juggle cleaners, sheets and keys. Some are excellent but others are fledgling companies — they won’t tell you, for example, that in London rules ban you from shortletting your home for more than 90 days a year. Many cover only certain areas, such as inner London.
If you plan to use one of these firms, screen carefully to select one that is large and professional enough to manage well and be accountable if issues arise. Hostmaker and Airsorted are reputable.
How much do you actually earn?
We charge around £100 a night for our two-bedroom cottage in southwest London. Deduct safety costs; Airbnb’s commission for hosts (3%); a cleaner before and after (although you can set an additional guest charge for this); additional insurance costs; and, if you use a hosting company, their fees (from 12%). Income tax is due on your net profit.
How do I get my Airbnb listing right?
Take excellent property photos — that’s essential to maximise bookings. I’d highly recommend getting a professional to help you with these, especially if you intend to rent out your property more than once. In some areas, Airbnb can help you find a professional photographer (see airbnb.co.uk/professional_photography). Or book your own at snapgenius.co.uk.
Airbnb tries very hard to get you to agree to instant booking, as this increases their booking rate and revenue. But I’ve felt uncomfortable with this and prefer to screen guests before I allow them to book. We also only accept guests who have verified their ID by providing Airbnb with a copy of their passport and links to their social media accounts.
Setting a minimum stay length of at least 3-4 days make all the legwork more worthwhile. We apply a one-week minimum stay and usually get bookings for the whole holiday.
Do I need special insurance?
Airbnb’s ‘host protection insurance’ sounds fabulous at $1m, but covers only third-party claims against you, such as if someone gets hurt in your home or a leak damages the neighbour’s flat. They also have a $1m ‘host guarantee’ on damage to your property, but this is not insurance: Airbnb manages and decides on each claim, so you have less rights than with traditional insurance cover and no ombudsman to challenge decisions on payouts.
What’s more, your home insurance policy may be void if you use Airbnb. Renting out your home for short lets is seen as a business and has to be insured as such. Some policies specifically exclude this, so check to make sure you are covered. Our insurer cancelled our buildings cover when we first told them we planned to Airbnb our home. Ask your insurer if they will offer additional cover for that, or contact a specialist broker such as Towergate, Home Protect or Intelligent Insurance. Guardhog, which specialises in insurance for the sharing economy, is also worth a try.
If you own a leasehold flat, your lease may prohibit you from renting out your flat on Airbnb — and in extreme cases you may be sued by the freeholder for doing so (as happened to this flat owner in north London).
What are the risks?
At worst, damage or loss can be huge if it is not covered by Airbnb’s policies or your own buildings or contents insurance. It opens you to identity theft; if you rent out a flat, neighbours can get fed-up with strangers in the building and wheelie suitcases up the stairs at 1am; and, once you deduct all the costs, it may not be as profitable as you think.
I have a long-term rental property. Is it worth short-letting on an ongoing basis instead?
I don’t recommend this to my clients. It’s a lot of hassle to do year round, and empty gaps between stays can eat into your profits. Plus, there is that 90-day rule in London.
But for us, it has been worth Airbnb-ing our home over holidays. We’ve made more than £3,000 this year alone — and our next guest checks in this weekend.
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