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Pros and cons of renting your home on Airbnb vs traditional long term rental



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hey guys James Hunt from Airbnb

guide.com and this morning I received a

great question from one of our followers

named Robert he sent me an email and

said James I have a property what are

the benefits of putting it on Airbnb

versus a traditional long-term rental

and I think that's a great question

because if you do have a property that

you're looking to make money off of as a

rental generally you would go the

traditional route which is to lock a

tenant into a six month to a one-year

lease that's just the way that things

have been done you know with rentals for

a long time however if you've been

hearing about short-term rentals and

you're interested in testing out Airbnb

or other short-term rental platforms you

should know the pros and cons of using

Airbnb versus a traditional rental in

this video I'm going to be discussing

the pros and cons of using Airbnb versus

a traditional long term rental first

benefit of using Airbnb versus a

traditional long term rental is that

you're going to have an increased

nightly rental rate now with Airbnb you

can actually make double or triple the

amount that you would with a traditional

rental now this is because you're

renting it for shorter periods of time

generally when you sell something or

rent something to someone over a long

period of time you decrease the payments

in order to make it a better deal now

when you're looking at using Airbnb to

rent your property you have to compare

it to hotels and the price of hotels

versus traditional rental prices just as

an example my next-door neighbor Lee was

renting his spare bedroom out as a

long-term rental and he was charging

about $400 a month now that he's using

Airbnb his goal is about $900 a month so

he has more than doubled the amount of

money that he was I'm using Airbnb

versus his traditional long term rental

another benefit of using Airbnb as a

rental platform versus traditional long

term rentals is that you can also make

money off of a cleaning fee now this is

going to be a flat rate that you charge

per guest

you can set it to whatever you want to

but that's what you're going to charge

guests to clean the rental if you rent

your house out sixty times in one year

with a $25 cleaning fee

you just made fifteen hundred more

dollars so obviously you do have to

actually clean the place and justify

your cleaning fee however most people on

Airbnb are used to charging or paying

and cleaning fees so you can make extra

money off that as well

another really positive thing about

using Airbnb for short-term rentals

versus a traditional long term rental is

that you can use Airbnb s review system

to kind of vet your guests beforehand

and see what kind of a renter they're

going to be now with a long-term rental

a lot of times you will try to get

references and you might run a

background check or a credit check on a

guest however that doesn't mean that

your guest is going to be very clean and

it doesn't mean that they're going to

treat your rental with respect so on

Airbnb you can read through your guest

reviews and see hey this guy has five

stars for cleaning he's a five star

guest so I can pretty much guarantee

he's going to take care of my property

now you can run into nightmare stories

or bad guests I mean you know we've read

about them we've heard videos and people

talk about you know running into a bad

guest I haven't really had any myself

however there are some out there with

that being said if a guest has ten

five-star reviews for cleanliness you

can pretty much guarantee hey this is

going to be a clean guy or girl and we

can trust that our rental property is

going to be in good hands the second

part of the Airbnb review system and a

reason that makes it so great is that

guests will oftentimes want to treat

your property with respect and keep it

clean because the fact that they know

they're going to be reviewed when they

leave your property most people that use

Airbnb want to continue to use Airbnb

therefore they're going to try their

best to be clean and treat your

environment with respect so they they

don't get a bad review they want to get

a good review so they can keep using the

app and because of that you can

generally expect that your Airbnb guests

are going to treat your property fairly

and keep

clean another great thing about using

Airbnb versus a short-term rental is the

fact that your guests pay the full

amount in advance now there are some

instances where the guests will pay

basically a month at a time

so if they rent your property for

several months they will just pay you

for that month in advance however most

of the time guests only come for three

days to maybe a week and the entire

amount that they're going to pay you

gets put into your bank account the day

after they check in now their funds are

actually held the moment that they book

your property Airbnb goes ahead and

charges their credit card and puts a

hold on that amount and then after they

check in the funds go to your bank

account so one of the problems with a

lot of traditional long term rentals is

that you're chasing your tenants trying

to get money every month with Airbnb you

don't really run into that problem

because the funds get pulled from their

account the moment they book your

property so you don't really have to

worry about that something that's also

good to think about and to keep in the

back your mind is that as a host on

Airbnb you have a million dollar

insurance policy that comes with your

hosting account

it doesn't cover things like theft

however if a guest does destroy your

apartment or house you can pretty much

guarantee that Airbnb will cover the

cost of damages so yeah with the

long-term renter or with long-term

rental you would have probably a

commercial insurance policy that would

cover stuff like that however with

Airbnb you kind of have the same thing

as well which is nice with Airbnb there

is less consistency when you sign a

tenant into a long term lease it's

generally going to be six months to a

year so for that six months to a year

you can count on a certain amount of

income coming in to your bank account

every month once again like I said

sometimes as a landlord you do run into

issues of guests not wanting to pay

their rent but for the most part for

that six months to a year you can

guarantee that income with Airbnb there

is no guarantee that you're going to

have renters maybe you have a calendar

that book to pull this month

but then next month is a slow season

which means that the double amount that

you made on your nightly

rate is really cut in half because you

had an empty calendar the next month if

you're really smart about your Airbnb

and you've done the research you can

pretty much be consistent with your

calendar in st. Petersburg where I'm at

our calendar stays pretty consistent and

we stay booked out I think we have a

very competitive nightly rate and we

offer a very clean and comfortable

environment for our guests so we have

put a lot of research into it and we do

a good job and I think that as an Airbnb

host although your potential earnings

are less consistent than with a

traditional long term rental if you are

smart about it you can ensure some

consistency

the second downside to using Airbnb

versus a traditional long term rental is

that it does take work to get the

property ready in between guests because

there is a higher turnover rate you're

going to be constantly cleaning a

property and managing a property and

providing your guests with their

required amenities and necessities with

a long-term renter you just sign the

lease they go into the property and very

rarely do you actually have to interact

with your tenant sure you have basic

maintenance that might have to be done

on the house like mowing the lawn and

taking care of the property however for

the most part once the tenant gets into

the property they just do their own

thing with Airbnb you're going to be

interacting with guests on a weekly

basis sometimes on a daily basis which

is going to require you putting in a

little bit of extra effort or quite a

bit extra effort just to be honest in

order to maintain your business once

again though if you're making double or

potentially triple the amount you would

it is worth the effort

and you can charge like I said a

cleaning fee to help cover any expenses

that would come from having a lawn crew

or a cleaning crew or something like

that and lastly I think one of the

biggest downsides to using Airbnb versus

a traditional long term rental is that

with most traditional rentals you rent

the place unfurnished with Airbnb it has

to be move-in ready the guests just come

as they stay there and then they leave

meaning you have to fully furnish your

apartment your house your spare bedroom

or what

Everitt is that you're renting most

people who just rent out their spare

bedroom don't really have to worry about

that because they probably have a bed in

there anyways however in my case it's

just Rebecca and I in the house

therefore we really didn't need that

extra bedroom so for the several

thousand dollars that we spent to

furnish that extra bedroom that really

is an added expense however we did make

that back in the first several months of

using Airbnb so from here on out we have

our fully furnished extra bedroom and

bathroom that we can use at any time and

we do make money off of it so there you

go guys those aren't all the pros and

cons of using Airbnb versus a

traditional long term rental but I do

think it does cover quite a few of the

pros and cons that you're going to run

into in stuff that you should think

about if you're trying to decide whether

or not you should use Airbnb versus a

traditional long term rental if you have

any other questions feel free to send me

a message through youtube and as always

you can go to airbnb.com to learn more

hosting tips and tricks from super hosts

like myself