If you own a rental property, you may have thought about renting it through Airbnb. Perhaps you already rent through this means and are entirely happy. However, a winning investment strategy doesn’t focus on what works, but what works best. For all its advantages, Airbnb comes with many serious and risky and financial implications.
Investors should, in other words, look beyond the narrow focus of Airbnb. This doesn’t mean we should ignore the value that Airbnb has delivered, because it has delivered and will deliver for many. So, while we should appreciate the value of Airbnb, we should also acknowledge that rentals have many other, new and exciting opportunities. The potential of your short-term rental, and its income generation, shouldn’t stop at Airbnb.
The Reality of Airbnb
Airbnb isn’t for everyone. The business model is about renting your property out to strangers – many of whom have little or no reviews. There is, then, a risk to the safety and security of persons living inside the property, and to the structural integrity of the property itself. Many hosts make the false assumption that visitors are a benign force – people come in, people come out – no harm done?
This would be the equivalent of taking out fire insurance after the house burns to the ground. The damage has been done and, once done, it irrevocably changes how you view fire insurance. Similarly, one bad experience on Airbnb taints your entire future experience. You’re less likely to appreciate the presence of strangers, and more likely to value your investment more. These events aren’t rare. They happen every day.
Theft has now become more commonplace. Think about it – a stranger enters your property and, without CCTV footage, can wander around as he sees fit. In some properties, there is no other renter. He or she can do as they please – rummaging around to find what’s valuable. And, should your property prove popular, the regular influx and outflux of people means you can never know who stole your grandmother’s necklace.
But what about customer support? Airbnb has protections in place, right? That may be so, but there’s only so much Airbnb can do. Think about the above scenario, where multiple guests come in and out over a one-week period – what could Airbnb conceivably do to address your theft concerns? Quite simply, the answer is invariably nothing at all.
And nor is this risk limited to those with little or no reviews. You can never entirely immunise your property from the actions of others. It has been shown that even those with wholly positive reviews can leave a trail of physical destruction behind. The idea that Airbnb is sheltered from risk is a false one. Many hosts have taken their rentals off Airbnb for precisely this reason, looking to alternative, more lucrative, opportunities.
Opportunities Beyond Airbnb
You’ve decided that Airbnb might not be right for you. Perhaps Airbnb have not done enough to assuage your fears, or, perhaps you’ve already suffered a bad experience. Whatever the reason may be, now is the time to look for opportunities beyond Airbnb – for there any many. For example, many investors are now turning to more niche, specialist events that can be held in their property.
You may own an idyllic country farmhouse, for instance. This makes for the perfect setting for wedding celebrations. Not every couple seeks the drabness of a local hotel, or the grandeur of a distant castle. Maybe you own an upmarket penthouse with a dramatic skyline? You can now target that penthouse for niche business events – earning considerably more than Airbnb, and yet without the associated risk.
You need to work out what your property does best. Evaluate the rooms, the crowd that it can hold, and what events could realistically be held. Properties come with their own potential, both large and small. The revenue you earn is, then, circumscribed by this potential. Nonetheless, with the right approach and the right ideas, you can transform the income generation potential of your rental property – and without Airbnb.
You also need to think about parking, insurance clauses and your neighbors. You need to understand zoning regulations and restrictions. You might not have the time, though – in which case, you can hire real estate professionals to do this work for you. From our experience, clients come to us not only to discuss the general management of their property, but also the niche potential that these rentals hold.
If you have any questions about your rental and would like to discuss this with a real estate professional, then contact a member of our team today. Triumph Property Management can help you with the management of your Las Vegas rental – whether for standard or niche purposes.