Airbnb - are the risks worth the income?
It's tempting to turn your spare room into a stream of extra income, and it's pretty easy to do with tools like AirBnB.
Renting a room on Airbnb can be a little more complicated than you think.
But don’t jump into this venture lightly because there are serious issues to consider. You don’t want to come unstuck and lose out in the long run, like this unlucky Canadian couple did.
It’s not just the risk of unknowingly letting your home to a group of party hard revellers. You also need to check whether you are even permitted to let your room or entire home on Airbnb. Doing so may constitute a breach of your rental agreement, strata building rules, or even local government regulations.
Short term lettings in residential apartments are also a source of angst for strata committees and managers. Extra traffic of guests in the building may not be covered under strata insurances, and can be disruptive to the peace and quiet enjoyment of neighbouring residents. In some cases, rooms are booked in residential blocks to host unruly parties, with excessive noise causing nuisance, and party goers leaving communal facilities such as the pool area in disarray.
If you’ve ever been tempted by the extra cash, here are some issues to consider:-
- Does your local government allow for homes to be let for short term accommodation? Some councils expressly prohibit this. It is the hosts responsibility to comply with the local laws and Airbnb recommends that hosts look up the permitting, zoning, safety and health regulations that may apply.
- Do taxes or local government fees apply, such as hotel/transient occupancy tax, GST, etc.
- Will sub-letting a room (or an entire rented premises) without the consent of your landlord be a breach of your tenancy agreement? Some landlords have evicted their tenants after discovering they had listed the premises on Airbnb and were hosting guests.
- Will providing short term accommodation comply with your strata / building rules? It is the host’s responsibility to comply with any applicable rules and regulations, some of which do not allow short term letting of 3 months or less.
- Who will be liable if the guest suffers injuries? Injuries to Airbnb guests may not be covered under your buildings strata insurance. You may need to consider taking out liability coverage in addition to property coverage, under your insurance policy.
- Who is liable for property damage and loss? Does your insurance cover damage and loss caused by short term lettings? Talk to your insurance provider and let them know of the situation - you may need to take out extra coverage which means additional cost. Advise your insurance provider of the change in circumstances before the guest arrives to ensure that your insurance cover is adequate and will not be voided.
While some authorities are actively fighting the changes that Airbnb are bringing to the market, such as the aggressive legal action taken by New York City against Airbnb, others, including Paris and Amsterdam, are welcoming the growing Airbnb trend, even adapting their laws and rules to reflect this innovative, cost effective and appealing approach to the travel market.
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