Landlords, we here at Victory Property Management consider it our serious responsibility to protect your interests, your property, and our reputation. A relatively new website AirBnB, with more than 54 million active bookers annually, has recently been in the news concerning issues that could affect landlords. While we don’t recommend shooting down the idea right away, it is a critical issue that requires a lot of thought and consideration for your exact situation. We want to point out the risks, not discourage homeowners from trying a neat new money-making idea. For our purposes, however, the much bigger concern is when tenants attempt to rent a home, then turn it into a shorter-term rental. This can have major consequences for the homeowner. Here are some recent news clips to digest…
Midtown landlord files $300G suit against tenant for renting out apartment on Airbnb
Tenants turn 3-bedroom apartment into 10 bedrooms, rent on Airbnb, landlord says
Porn Industry Uses Airbnb, Rental Houses for Filming
Spring Breakers Are Flocking to Airbnb Rentals. What Could Possibly Go Wrong?
What is AirBnB, Really?
AirBnB is a website for people to list, find, and rent lodging generally on a short-term basis (one night, a week, or occasionally a month). Their website offers unique places to stay from local hoses in 190+ countries. You can find a bed and breakfast location in Florida, an extra bedroom to spend a couple of nights in New York City, or a treehouse in Belize. All rented by individuals. Their website says they have over 2 million listings worldwide in over 34,000 cities.
Should a Landlord be Concerned about AirBnB?
While you may appreciate your tenant making sure that they can pay the rent each and every month on time, how do you feel about having unknown guests coming and going from your property? It can easily create a daily sub-let scenario. What happens if one of these mystery guests damages the property? While the tenant is technically responsible, will they really take care of it? What if the guest trips and gets injured? Will your insurance coverage need to cover any medical bills? Losing control of who is coming and going from your investment property is an issue that landlords are increasingly having to consider since 2008 when AirBnB came online.
What Can a Landlord Do to Protect their Property?
When you lease out a property to another individual, you are legally handing them some rights to the property. They have the right to quiet enjoyment; the right to come and go when they please; and the right to invite friends and family to come spend some time. But… as a landlord, you do have the right to control who sublets your property. You have the right to protect your investment from damage. You have the responsibility to make sure that your property conforms to legal requirements set by the city. So what can you do to make sure you do not get caught between your tenant and AirBnB and their mystery renter?
Adjust the Lease Agreement
Before leasing out your next unit, make sure that you have a clause that limits the tenant’s ability to sublet without your express written approval. You can even state clearly that the tenant does not have the right to list the property for rent on any basis or in any form. Check with your real estate attorney to make sure the wording will offer you the best protection.
Check Online
The next time you have a little free time on your hand, take a moment to do an internet search for your rental property address. Hopefully, all you will locate is perhaps the old listing information when you purchased it and the advertising used by your property manager. If you find a listing on AirBnB, Tripping.com, or Craigslist, contact your property manager right away and they will handle the matter for you.
Set House Rules
On the flip side of the issue, AirBnB does have a slew of trust and safety resources along with a $1M Host Guarantee. If you trust your tenant and you are willing to allow them this freedom, consider reviewing this AirBnb article that can be used to set some mutual house rules between you, your tenant, and their guests.
While AirBnB can be a great way to stay in some unique and more comfortable accommodations while traveling and it can be a creative way to earn a little bit more income, it can cause some serious concerns to landlords who are caught in the middle. Your property management company will do everything in its power to make sure your preferences are followed and your financial interests are protected
