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.

[Helen744]

Jhoan your landlord is a foolish man , mostly here in Australia subletting is illegal and definitely against the tenets of most leases. You already have no responsibility for insurance and landlords would not be covered in this scenario.  This I imagine breaks your lease. It is not a way to print money as some people think . Most who take up Airbnb own or are buying their properties.    some I imagine are not but the casual attitudes shown here will not get the job done. It is hard work and If Airbnb allow you to register someone elses house , I would be very surprised.   H

[Huma0]

@Helen744 

I agree with everything you say (I believe subletting is also illegal here), except the last sentence. Airbnb DOES allow people to list other people's properties. I know a few renters who have done it. Somewhere in the small print, I am sure there is a disclaimer saying it's up to the host to ensure they have permission and, even if it is technically not allowed, I've seen hosts posting here saying they found out tenants were renting on Airbnb without their permission and CS simply ignore all pleas to have the listing taken down.

And then, the USA, we also have this: https://community.withairbnb.com/t5/Airbnb-updates/Find-and-rent-a-home-you-can-host-part-time/m-p/1...

Airbnb is now encouraging renters to become hosts, albeit under what is supposed to be a controlled scheme (the pilot for this has already run into issues, like complaints from other residents). But, it seems clear to me that Airbnb is on a drive to recruit as many new hosts as possible, regardless of the consequences...

[Mike-And-Jane0]

@Huma0 I don't believe sub-letting is illegal in the UK. However 99.999% of rental contracts do not allow it so you would be in breach of contract if you did.

@Jhoan12 I would advise you to ensure your rental contract specifically allows sub-letting (rather than just remaining silent) and, unless there is USA or state law forbidding it you should be OK.

If your landlord is sensible he will take out short term rental home insurance as well which is rather expensive I believe.

[Huma0]

@Mike-And-Jane0 

Yes, you're right, it's not illegal here (I was informed it was, but that was a very, very long time ago so I guess the law has changed) and that it's largely dependent on the lease/tenancy agreement.

However, I wonder how the law regards subletting in terms of STR? It's not exactly the same for a tenant to sublet to someone else on a long term basis as to have a revolving door with guests coming and going every couple of days.

I have always found it difficult in most cases to find information on laws/regulations specific to STR. It seems the law is still rather undeveloped here in that respect.

[Helen744]

We have a lot of rented public housing here in Australia ..... I wonder if Airbnb would even know if those tenants began subletting  Huma0  Yikes      H

[Sudsrung0]

@Helen744 

Airbnb must allow sub letting or they dont know about it, because I know of a guy here with 100 properties listed on airbnb they are not his.

None of these OTA's ask for proof of ownership apart from Agoda who started asking recently copy of title and copy ID card, 

BDC used to send out a code by mail were you had to login and enter that code. 

[Helen744]

Sudsrung0, that is really shocking to me ... H

[Helen744]

but some are 'managed ' with monies going to the owner, or i remember seeing on here someone asking how they could acess details of their own properties because they were not receiving income.    Crazy,crazy   H

[Sudsrung0]

@Helen744 

Subletting is also illegal here in Thailand but it goes on, we know we know exactly what they are doing, 

They will approach us asking how much for 1 year rent.

They cant cover the rent and bills then they just walk away plus stuff get stolen, 

What I have seen happen here is a guy will rent a 3 bedroom villa and then rent out 2 bedrooms on airbnb, he gets to live almost rent free,

I had a friend in Australia doing it somewhere around the Gold coast he was doing good until he got found out, then he got booted out.

[Gillian166]

@Helen744  in the USA they call it "arbitrage" and it's a very popular model for ABB. There's a few YouTubers with big portfolios and income who spruik this model, but as you point out, it's still a lot of hard work and one must actually be intelligent to manage it well.  I messaged the top youtuber Sean who runs a course teaching people how to do it, and he claims to have plenty of students in Australia, so there are people who have approached landlords and made these arrangements. I think it's possible to do, so long as everyone is upfront about what's going on, so I don't think sub-letting is illegal, just not allowed under a standard lease. 

[Helen744]

@Gillian166 , I am not sure what would be in it for the landlord or how either parties tax would work , as most people I know left the mainstream rental to try and make a higher income from their rentals and to cut out the middle man ,aka the property agent .who would be responsible for the increased rental,wear and tear etcetera and wouldnt the owner lose all rights to inspect or maintain the property ? It may be doable for renters but as a host/owner would shudder at letting my properety out in this type of arrangement . All the money and none of the responsibility . Arbitrage indeed.? Co hosts in my model are family , at a pinch someone you do not know ?   H

[Gillian166]

@Helen744  actually an airbnb property is cleaned and inspected far more often than a regular rental (if doing true STR I mean), so in that regard it's actually a good thing IMHO. A landlord could still request to do a quarterly inspection. I'm not sure an abb incurs "increased wear and tear" either, we've rented out our cottage twice before and those tenants left the place in a big mess, plus they made a few changes (some better, some worse). 

The taxes are the same for the landlord, they receive rent, what is different? the only thing that might change is their rates as places like the GC charge more for STR but you could oncharge that price difference to your tenant if you really wanted to (it's still a tax deduction). I think if you found a good operator this model works just fine.  The only sticking point is when the landlord realises someone is profiting off their property, but why should that truly bother them? the Host is investing in furniture, utilities, and all the work that goes into running an airbnb, and they are liable for all damages. It's a valid model. 

[Helen744]

Gillian166 I think my main issue is a doubling up of contracts that do not gel together. You tubers may be doing it and I am sure they are not getting their hands dirty.Property managers are generally with agencies and so offer all types of protection and comebacks for hosts albeit for a fee ,but this means  that 'the owner ' is side lined by the tenant and the houses, lease is either 'handled twice or is not protected through insurance belonging to the owner at all ,except Airbnb and we know that does not always 'work out'. Things often look good when we only look at surfaces but not once you look into the details or when something goes wrong. ... there was an incident like this on here not long ago with a number of students who had rented thru 'the tenant ' and the 'owner ' wanted them gone and it was a long term rental ,or so the students thought.... H

[Huma0]

@Gillian166 while I agree that an STR is usually cleaned and inspected far more often than an LTR, in my personal experience, there IS more wear and tear. The reason for this is that people are more likely to damage things in an unfamiliar space. While a long term tenant would occasionally damage something (or more likely their friends/visitors would), with STR it is constant. I also never had scrapes from suitcases all over the walls before! Meanwhile, guests do not want to pay for damages and Aircover is a pain in the backside. With LTR you have a proper deposit. 

Of course, you do get tenants that can do a lot of damage, but if you do thorough checks/references beforehand and have a sizeable deposit (none of which you get to do with Airbnb), I have found it to be fine. My mother has had a lot of problem LTR tenants, but she uses an agent and I suspect he is not doing his job properly. I have also had bad experiences with letting agents and don't trust them as far as I can throw them. 

Renting in my own home does, however, give me the right to evict bad tenants and I have done so without any real issues. When you rent out an entire unit, well that's a different matter, and a lot more caution is necessary.