Rolling In Money with Airbnb: What Are the Benefits and Drawbacks?
Airbnb has become a household name due to the short-letting industry’s worldwide success. Across the globe, millions of property owners have become Airbnb hosts as a side hustle or to supplement their income. However, what are the specific risks of Airbnb hosting? And what advantages can be gained?
Legalities & Tax
Before listing your property on Airbnb, you need to get permission from a landlord and a mortgage lender. Moreover, depending on where you reside in the United Kingdom, your local council may need you to pay a holiday let tax or other company tax on any Airbnb-related earnings. Increasingly, localities in the United Kingdom are imposing occupancy limitations. The 90-day regulation in London is well-known, but keep a lookout for similar rules in other cities in the UK.
When considering whether or not to host on Airbnb, many individuals are concerned about the safety and security of their possessions. Therefore, before hosting, it is advised that you remove any personal or valuable items from your Airbnb property. Even if you rent a room in your home, you cannot always protect these belongings; therefore, it is advisable to relocate them.
If you rent out a room in the home you continue to occupy; physical risk will always be involved. Airbnb’s security screening employs a thorough background check. Airbnb allows you to only accept bookings from verified users, and you can typically determine a potential guest’s reliability based on their reviews and other personal information. Both hosts and guests use government-issued identification documents to verify their identities and link their Airbnb and social media accounts.
Taking precautions to safeguard the health and safety of your visitors, such as adding a carbon monoxide detector and eliminating hazardous items, can reduce the likelihood of your guests getting injured and suing you.
Airbnb provides hosts in the United Kingdom with liability insurance coverage of up to £1 million. This is initiated in the unlikely case that a visitor is injured or your property is stolen or destroyed while guests are on site. Airbnb also offers Host Damage Protection to UK hosts, up to £1 million, in the unlikely event that your property or possessions are harmed by a visitor during their Airbnb stay.
“Airbnb also offers Host Damage Protection to UK hosts, up to £1 million”
Remember that Airbnb insurance does not cover normal wear and tear, so you must collect a security deposit to cover any possible damage. You, a co-host, or a trustworthy housekeeper must inspect the Airbnb after check-out to discover any damage before the next visitor arrives. You will not be able to register a damage claim if you cannot identify the visitor responsible for the damage. To save time, it is usually preferable to attempt to resolve the matter immediately with the visitor before making a claim. You have fourteen days or until the next check-in to make a claim (whichever comes first).
It’s no surprise that short-term rentals offer property owners a significantly higher revenue than typical long-term rentals, particularly when employing Airbnb’s dynamic pricing algorithm to optimize nightly prices. Estimations of revenue can serve as an essential guide, but your nightly fee will rely on various factors, such as property size, location, amenities, and any additional services.
Airbnb always releases money within 24 hours of a guest’s check-in (assuming there are no problems). In addition, guests have 24 hours to notify Airbnb of any complaints that deserve a refund.
Please note, however, that Airbnb might reimburse a guest’s fee if the listing is misleading, if there are concerns with cleanliness, if you fail to provide the property’s key, or if you terminate a booking at the last minute. You will not be protected if the visitor attempts to deceive you, and Airbnb may penalize you if you seek to avoid paying their fees. (The management charge corresponds to 3% of your revenues)
Help From Property Management Companies
Due to the precipitous surge of the short-letting industry, several property management businesses have become apparent across the United Kingdom to assist property owners in short-letting their rentals. It is no secret that if you plan to manage multiple Airbnb properties, you will require assistance. Airbnb hosts have a variety of help, ranging from cleaning services and reservation administration to completely managed businesses. A property management charge must be considered in your expenses; nonetheless, it enables you to expand your Airbnb business and provide a better work-life balance.