If you own your home, you probably know that your biggest expense is your mortgage. At the end of the year, the bank will take its cut, and you’ll pay taxes on the profit. You will have to pay your landlord if you rent, but you won’t be responsible for any mortgage or tax payments. Many renters find that renting is the better option, and AirBnB is making this option more popular by eliminating the need to sell your own home.
Should you rent your home on AirBnB?
The rental market is hot, and time is short. Even if you have the money to buy a home, you may be better off renting than spending that money on home improvements. But, if renting isn’t your thing, then here’s an alternative: renting a home. Yes, you can rent out your own home on sites like AirBnB for a fraction of what you would pay for a regular rental.
There are a lot of reasons why you may consider renting your home on AirBnB. Perhaps you have a large family, and you need an extra room. Or maybe you’re a student headed to a distant college where you’ll have to pay for an apartment the school isn’t affiliated with. Maybe you just want your home to be more attractive to potential renters. Whatever the reason, there really is no better way to lower your monthly expenses than renting.
Before you rent your home in AirBnB…
No matter how much time you have spent on AirBnB, it all boils down to a simple equation:
Time + Money = Value
Of course, this is not entirely true since the value of your time and money will depend on some factors, such as the quality of your property and the ratings of your guests. Here are some factors that you should consider before renting your home on AirBnB:
- How AirBnB works – AirBnB is becoming a popular alternative as it offers homeowners more options to earn money through renting their homes. Essentially, people can rent out any room in their homes. If you are a homeowner, you can take advantage of the free benefits of listing your homes, such as contact information, pictures, and description of the property.
- Airbnb charges – It is estimated that there are more than 34 million AirBnB users in the United States alone. With this many people using the service, most people are curious about how much it costs to rent their home. The answer will vary depending on the size of the property, the amenities being offered, and the location, but in general, AirBnB will charge between 40 and 50% of the average rental rate per year.
- Local laws – As AirBnB has become more popular, some cities have decided to ban renting out their homes to strangers. Some cities have gone as far as to require the hosts to follow strict rules, including obtaining permission or registering with the city before renting. Some of the cities that have gone to extremes to stop house rentals on AirBnB are New York City, Boston, San Francisco, and Portland.
- Earnings – You can make more than $2,000 per month if you rent out your entire house on the site. And, for people living in places like New York City, that can definitely be a nice side income.
- Communication with Airbnb guests – There are many ways that you can do it; for example, you can send them an email beforehand, write a message for them on AirBnB’s blog or even give them a call to make them feel more comfortable
- Maintenance of the property – Aside from handling the interactions with guests, you will also be required to maintain a clean rental property. Having a messy rental property is the number one reason why AirBnB users rate their homes less than 5-stars, so it’s very important that you take care of the cleaning part.
Renting your home on Airbnb allows you to make money renting your home to other people. It can be a great way to support your mortgage, pay for your kids’ tuition, increase your retirement income, and ultimately lower your tax bill. But, is it right for you? Think carefully about the risks you are taking and the costs of renting your home on AirBnB before you jump in.