Hosting a new rental property

[Jhoan12]

Hello. I just recently rented a property and asked the landlord if I could put his property on Airbnb with me as the host and he said as long as he is not tied in to any legal issues that might arise from any lawsuits that may be filed by the guests. Does anyone have any experience or input with this topic? I would greatly appreciate it.

[Huma0]

@Gillian166 

I am sure it's a valid model in some circumstances but, for example, here in London, most rentals come furnished so it's not the tenant, but the landlord who is investing in furniture and it's usually the landlord who is responsible for maintenance and repairs, and redecoration for anything caused by 'wear and tear'. As for utilities, yes, it is usually the tenant who is responsible for those, but not always. The landlord is responsible for buildings insurance etc. which gets a lot pricier with STR.

And buying a property, with the deposit and the debt, is a huge investment, much more than the investment the tenant is making so, yeah, I would have a problem with someone else profiting from my property.

This is something I would only consider if I 100% trusted the tenant and I was getting a cut of the profits. Even then, I would rather pay a reputable co-host or manager to do it. It's just too risky in my opinion, but of course I am just seeing it from the landlord's side.

As a tenant wanting to host for the first time, I would probably see things much differently, because I would believe that I was responsible enough to ensure nothing would go wrong. Having hosted for a few years, I know A LOT can go wrong.

[Helen3]

Have you thought about how you will cover rent and bills if you don't get the bookings you expect @Jhoan12 

[Huma0]

@Helen3 

Well, I suppose if the tenant has enough income to cover the rent and bills without the guests, then it is fine, but I am sure that's often not the case.

I know a guy in Canada who rented two apartments, one to live in and one to rent out on Airbnb. He did not have permission from the landlord to do the latter but, when I told him that was not okay and pretty risky as it's probably against his tenancy agreement, he just said, "Oh it's fine. The landlord hardly ever comes here, so they won't find out."

Then the pandemic hit and all his bookings were cancelled. He was in a complete panic because the apartment he was renting out on Airbnb paid for the apartment he was living in and he didn't have enough funds to pay for it otherwise. 

Now, I am not gloating. I felt sorry for the guy. But, it didn't seem like a well thought out plan to me. Even though most of us could not have foreseen the pandemic, any number of things, like the landlord or building management finding out, could have scuppered that set up in the same way.

And, what happens if the guests trash, rob or squat the place and Aircover won't pay out?

[Karol22]

Hi @Jhoan12 that's awesome! You can let your landlord know that Airbnb has an insurance policy that covers a million in damages and claims. For extra protection, you can also get an additional Commercial General Liability insurance policy to protect both you and the landlord.

This kind of activity in the U.S. is called "Arbitrage" and this is a very legitimate business model. Just make sure that you have in your contract the permission to "Sublease" to anyone for any given time both long term and short term. Also check with your local regulations, any HOA or local ordinance to make sure there is no rules you are breaking or if you need licenses. If there are any other concerns with the property in particular, be sure to address it in the contract.