The Newest Strategy for Renters: Vacation Rentals (Airbnb)
Gone are the days of pen-and-paper transactions; now you can rent out your property directly through an app on your phone.
Today it is easier than ever to earn quick cash turning your property into a short-term rental. Online sites such as VRBO, HomeAway, and recent cash cow Airbnb greatly facilitate transactions between homeowners and travelers, changing both vacationing and renting experiences alike.
These online platforms, Airbnb specifically, have entirely shifted the traditional economic model of what a hotel or home rental looks like for both businesses and investors. Airbnb has more than 6 million units available to renters online, and it is spread out over more than 100,000 cities. The website scaled incredibly fast over a very short period of time, with homeowners eager to rent out their homes to travelers in a safe and profitable manner.
While some people are more keen to having vacationers stay in their home than others, it goes without saying that this type of travelling does as much benefit for the renter as it does for the homeowner. Staying in a home provides a kind of authentic experience that is impossible to replicate in a downtown, commercial hotel. By staying in a property like an Airbnb, tourists get to feel as though they are truly absorbing the community of where they are travelling.
But how does the app work? For the traveller, it is quite simple. In making your account, there is a standard profile to fill out in which you can state your preferences for where you are looking to stay. Once Airbnb has a better idea of what you’re looking for, you will receive a list of potential places and can read through real reviews from tourists so you feel comfortable that you are staying in a secure home. There is also a helpful interactive map with all of the available listings and their prices so you can see exactly where you are staying before you choose to rent.
However, for those looking to list, it becomes a bit more complicated. As Airbnb has skyrocketed in client base and popularity, there have been a number of laws and city standards implemented in order to crack down on overuse of the site.
Before listing, it is critical that homeowners ensure they are complying with the rules of their apartment complex (if relevant), homeowner’s association, and their local government laws. Cities like Nashville, TN have specific laws stating that you can only rent your primary residence to tourists in certain areas, licensing & registration is also required in many areas; and Airbnb has recently had to call out a large number of renters lending out multiple homes on their platform.
Even though the advantages of these online sites to investors is incredible, it is curious to consider how these platforms will affect hotels in the future. People occasionally find themselves in a unique situation where they are almost amateur hotel operators regularly renting out their properties, stuck in the fine line between being a person and a business. As the popularity of these sites continues to grow, hotels around the world will be forced to differentiate themselves to compete with these less expensive properties.