It seems like I keep hearing more and more about Airbnb and other short-term rental websites. More and more people seem to be listing their apartments and houses on these short-term rental websites in order to make some cash.
Some people are even buying homes to specifically place on these websites too.
Even though this market seems to be growing very quickly, it doesn’t mean there are no risks. Below are a few risks and costs you may want to think about before you decide to rent out your real estate for a short-term period.
Since this is a short-term rental, you will have to advertise the property if you would like people to stay in it, of course.
You may use one of the many websites out there such as Airbnb, Homeaway, VRBO, and so on.
You may even place ads on other websites so that potential customers can find you.
All of this costs money!
Property management fee.
There is usually a lot more work to do with a short-term rental. This is because with a long-term rental, you usually just sign papers, give the person the keys, and collect a monthly rent payment.
However, with a short-term rental, you may be giving the keys to a new person every few days, the property will need to be checked, it will need to be cleaned, items will need to be replaced (such as toilet paper and soap), and so on.
This can add up to a lot more work and a lot more time. Because of this, many people with short-term rentals end up hiring someone to manage the property for them. If you do this, you will have to pay a fee to the person who manages your property.
Competition can be fierce.
One major risk with having a short-term rental is that you don’t know if the rental will be vacant or not. You may have a high vacancy rate because of a lot of competition in the area as well.
You have to think – you are competing with other short-term rentals and any hotels in the area as well.
There may be laws stating you cannot rent on the short-term.
Many cities are starting to fight short-term rentals. They may be placing new laws restricting any rental for less than 30 days which may ruin your short-term rental plan.
Are you interested in owning a short-term rental? Why or why not?
Image via Flickr by su-may