Being a short-term rental host has become much harder
bloomberg.com
bloomberg.com
People who often do short stays don’t give a crap about noise, neighbors, or anything else.
Plus many got into airbnb to get rich. Have 0 business sense, 0 landlord experience and often don’t maintain the property.
Plus, every time I stayed at Airbnb I felt scammed. The pictures always lied. Some of the things were not as advertised. And before leaving I had a todo list. Absolutely pathetic way to spend vacations.
the sad thing is that from the very beginning, unlike many other startup businesses, they actually had a great value-prop and worked incredibly well as a product
[1]: https://www.fanniemae.com/research-and-insights/perspectives...
WFH is working out the same way. People are spreading out to towns that don't have jobs to offer but thanks to people who are WFH they're bringing in money from the outside that's helping to prop up the local economy. As those people move out of the cities that's freeing up housing to be available for those who want to live in the city or need to live in the city.
I doubt it. One of the reasons people choose AirBnB over hotels is that they want a kitchen so that they don't have to eat out. As to taxes, while the city is still getting the property tax, they're losing out on the hotel taxes that the people staying in the AirBnB would otherwise have paid. Plus the profits that are now going to AirBnB would otherwise have gone to the hotel owner/managers and thus been more likely to get spent in the city.
So on net I'd say people staying in AirBnBs generate quite a bit less money for the city than if they'd stayed in a hotel. The only places that this sort argument works is for places that are so out of the way or unpopular that they simply don't really have hotels for people to stay in.
> They're not taking any jobs My understanding was that you couldn't really "take" jobs (in the long-term anyways). I would imagine that increasing the volume of our labor force would only grow our overall economy (so long as we can house everyone)
Does your city not monitor and control the short term rental market to alleviate this? Many cities have strict controls on rentals less than 30 day.
One of the problems is owning a short term rental is seen/marketed at low-touch or passive income, but It takes a lot of work to run sort term rentals. We've ran into all sorts of crazy situations that take work to properly manage.
Cities have put themselves in this position both because they don't allow enough new housing and because they don't allow enough new hotels and VRBO-like options in the places people want them.
A large number of smaller/basement airbnb units near me are within a very short walk of hotels or hotels offering suites. Generally speaking, the hotels are located closer to favorable amenities.
But hotels are tightly controlled and regulated and located (with the associated considerations about traffic, noise, etc). Airbnbs can be anywhere, unless regulations extend to them (and even then they often skirt the regs).
Instead your city is getting more tourism?
IDK if that is net positive or negative, but FWIW most areas try to boost tourism as much as possible. (Like, every U.S. state has a tourism dept/budget.)
They rent a house near downtown, spending all day at the lakes/beaches/attractions outside of the city, then maybe go downtown for dinner (assuming they don't cook out).
I'm sure the presence of tourists helps some shops stay open; but not the kind of shops that I use. Tourists don't use butchers, greengrocers, tool and hardware stores. They use tourist shops, which consequently multiply.
Today (as every day) I went to the shops. I got caught on the pavement/sidewalk behind a column of about 50 overseas visitors, following a tour guide. That column crashed into a similar column going in the opposite direction. This was the High Street, i.e. the main drag; it wasn't feasible to step into the carriageway, because there was traffic. In my view we have way too many tourists, and their guides don't extert enough control.
I regularly have my doorbell pressed by AirBnB guests who can't get in, and expect me to do something about it. This is frequently at night. There have been a few loud parties, including one with underage girls. I've been sworn at and threatened a few times.
The Council is trying to shut down this operator. They told the operator they were in violation of regulations (we're zoned as residential). They appealled. The Council won the appeal. I think they must have now appealled to the Secretary of State; they're still operating. This has taken over a year.
I would like it if my neighbour were the same person that was my neighbour yesterday. I have no "proper" neighbours.
My small town isn’t touristy and the CBD is walkable and real and has places I go (and visitors can go, too, of course) like groceries, banks, etc.
A friend lives in a nearby slightly larger small town that is a tourist destination and his “downtown” is a sea of gift shops and restaurants and nothing much else. To get groceries and supplies he has to go to the outskirts or the next town over.
But if Airbnb skirts those, you lose that financial advantage.
Wild, it's almost as if being a landlord comes with obligations.
I talked to someone who was renting out their basement apartment on AirBnB for a few months before a remodel was scheduled. They had one tenant try to file complaints about everything, down to the color of the bedding not matching the photos posted online. “Property not as described in listing”.
They ultimately won, but it was a lot of hassle.
Any marketplace has these issues. Getting the balance right is hard. I’ve had to fight a similar battle on eBay where someone waited until 4 hours before the claim deadline to file a claim that my “item was not as described”. They then requested a return and gave me a fake tracking number that never arrived. It took months and months to sort it out, but eBay was actually decent about looking at the facts. Still an annoying time sink I could have done without.
This doesn't seem unreasonable to me. Maybe the listing should match what they were actually offering to rent?
You see the same thing in fast food advertisements. A glorious hamburger on TV, and a greasy smushed mess when you purchase one.
The question is why we tolerate the latter, not why we should accept the former.
It’s insane to demand that the sheet color at an Airbnb match the color on the photo. It’s not materially relevant.
Now if the photo showed a queen bed and you got a twin, that would be a material difference. Perhaps even if the sheets were shown as cotton and you got something else.
But for me if I escape an Airbnb alive, I count it a win.
OP's scenario sounds like a shithead (which exist everywhere on every platform) was abusing the system to save some cash.
Yes I insisted on and got a full refund -- they were advertising a boutique, romantic getaway, not a cheap motel near the beach.
She also used to run an Airbnb on the floor below me until this summer, so go figure.
You have to research “tenants from hell” on YouTube to get a bit of an understanding of it, but even then the successful landlords often don’t even correctly account for all the finances and times and work out what they really made.
One bad tenant (or one bad uninsured disaster and there are thousands of possibilities here) can destroy years of leveraged appreciation.
Otherwise you’re dealing with random public in your house with all the issues associated with that. At least with renting to a business you have some sort of middleman.
We have multiple full-time, short term rentals and will not list them on Airbnb because they do not let hosts set their own cancellation policies and even worse they will override the few options they do give you.
A real world example of this is happening right now for us with our units in Hawaii. We have a 60 day no refund policy. 100% refund before this. We highly encourage trip insurance and you must check a box to opt of getting it. In our refund policy we state do not refund for weather or natural disasters. In these situations Airbnb will give the guest a full refund regardless of your policy, where Vrbo will let the host decide if they want to break their policy because of the unique situation. FWIW we gave full refunds.
If I had booked and found that you could no longer provide the service you promised but refused a refund I would feel as though I were scammed.
Personally, of course if the unit is inaccessible or damaged we provide refund. If travel restrictions change we always reach out to future guests and allow them cancel at that point. We've refunded guests that don't check-in for two months even though the city in Maui we are in had no fire damage and the roads.
People really want short-term rental owners to always be trying to scam, but many of us are just small business owners and try to do the right thing.
Also, if they do cancel in the 60 day window we relist the dates and if they get rebooked then we give that money to the person who canceled.
Sounds like the marker is working as designed. Buyer and seller have to find agreeable terms, otherwise no deal and move on
I get it, you run losses to start a new business, but if your prices are provably unsustainably low, with no profitability in sight, then your business model is anti-competitive, period.
> has predicted nine out of the last five recessions
It's basically a saying that people are always throwing out negative predictions that eventually come true, but that doesn't justify the excess false (poorly timed) predictions.
1. It can give a misleading impression of how loyal customers are. People stayed in Airbnbs a lot when they were cheaper than hotels but since prices went up after Airbnb started needing to show profits, it’s really common for people to stay in a hotel at the same or lower price.
2. The bigger long-term risk is that it encourages building the wrong type of company. If you have barrels of VC money sloshing around, it is really tempting to hire a ton of people and compensate them like you’re old Google - after all, you need to expand rapidly and that needs the best executives and tons of staff, right? Unfortunately, that can make it easy to forget what industry you’re in and a certain class of investor wants to believe that doing something on the internet means it’s now a high-margin industry.
Airbnb is much better than most of their cohorts in that generation of business and they used the pandemic wisely to make some much needed cuts to their overhead, but what we’re seeing now is affecting the supply side: in a competitive market consumers aren’t willing to overpay for lodging and with everyone involved paying the full overhead costs that means being a small-time hotelier is not very profitable. That doesn’t mean doom but it means everyone should have more realistic expectations for profit margins – the hotel industry tends to be 5-10% except at the high-end where it might be 15%, so there’s money there but it’s not a Google/Facebook ad revenue kind of margin.
I’m a host myself and VC funding plays no role in what I charge. It’s mostly a function of market forces.
Hotels have great amenities, really good customer support, and not too much BS.
With AirBnB it's an absolute gamble if you're going to get a good host or a wannabe slumlord. I don't think this is AirBnB's fault though, just general human greed, wanting to make easy money by providing as little value as possible.
AirBnB is where caveat emptor rules. AirBnB becomes more of a gamble was they allow gaming reviews. However, I've had plenty of problems with hotels (e.g., mechanical noise) and rarely experience anything delightful (although I did once get a very nice blueberry mule). Hotels are almost never better than expected.
Using AirBnBs, I've had some wonderful surprises (beautiful views, great human interactions) and a lot of variety. I've never had a problem, but I always make sure that the host is a superhost. My wife recently stayed at a place infested with roaches but it wasn't superhosted. . .
The last 2-3 years though, it has been less than stellar with both super host and non-super hosts stays for a majority of the stays, so I stopped using AirBnB. I'm sure there are still a lot of hosts that have a property they treat properly, treat the guests good, and care about hospitality etc. but the general vibe I get is that a lot of superhosts are folks with a bunch of properties doing the bare minimum while charging the absolute maximum. Just personal experience in the US though.
A multi-billion dollar corporation that actively strategizes to benefit from no regulation or bad regulation. Likely they also lobby for favorable regulation that will actively harm locals.
A local government not properly regulating.
I'd compare it to PG&E or Comcast in the United States.
What actually bothers you is that this is what people want and it will get built and it will be patronized.
Yes. It does bother me that the utility function of "the market" does not align with what is good for me, and that therefore it frequently produces results that are worse for me.
In fact this applies not just to urban development, but also to many other things.
Even high-end condos cost less than a low-end house to build, since the land costs are amortized among many units.
Perhaps because a tall residential building in a tourist spot is an eyesore.
People go there to see something scenic, not more of what they have at home, or worse.
If you build it like an eyesore, it will be an eyesore, yes. Here is a multi-story building that I lived as a student in and it housed another 10k: https://www.ruseducation.in/wp-content/uploads/2022/01/LOMON...
But I agree that building glass+concrete rectangles is a not a great idea for tourist spots (or anywhere, really).
When they were young, my grandparents moved into a whole district built from scratch for the purpose of housing workers from a nearby steelmill.
Communism notwithstanding, the district is amazingly well planned and - what's dearly missing in modern, hyper-optimized construction - sufficiently spread apart.
Exactly! If you rise up enough, it becomes possible to have green zones around these big buildings and make living actually enjoyable.
On the other end of the spectrum is Hong Kong and most of Manhattan - I don't look forward to living there, even if some condos are really nice inside.
In my corner of the world people move out of large cities not because they enjoy driving so much, but because they don't have the credit score for anything within city limits
Space and access to sunlight are also components of quality of life and you have neither in very dense housing.
That's because there's not enough housing in the city limits.
>Space and access to sunlight are also components of quality of life and you have neither in very dense housing.
That's not true, adding a few more sky scrapers increases the amount of space for people and does not impact the amount of sunlight people can enjoy.
Cities can also do things like add more rail lines, so people can commute from further away -- which also increases the amount of space for people.
The U.K. has had a housing shortage for decades, and solving it becomes harder each year as the backlog increases.
There are places in the USA where a builder could take this bet, but it would be much, much riskier.
How is airbnb and different?
Or do hotels not have the capacity?
They just block up the pavement lining up photos of landmarks (and anything else) with their mobile phones, that they could certainly download from Insta and get a better photo. Every square foot of this town has already been snapped a million times.
If this is your perspective, you’re either incredibly privileged, jaded, or both. I don’t think that poor people are necessarily owed cheap accommodation or transportation in any sense, but I also don’t think that active steps should be taken to remove more affordable options simply because they can’t afford to patronize high-end restaurants and stores or do the more expensive tourist activities.
My perspective on poor people and travel is that international air-travel is hopelessly underpriced; it isn't reasonable for all 6 billion people in the world to travel for holidays. I don't really care who travels; tourists don't better my bread, whether they're rich or poor. But the argument that tourists are good for the local enconomy depends on them being willing to spend money. Huge columns of overseas students don't spend much money.
My town is pretty, and world-famous. It is quite capable of sustaining itself without tourists; it has two universities, and several large hospitals. Housing is in short supply, and expensive. It's not a great shopping destination; tourists who want to shop shop elsewhere.
> but I also don’t think that active steps should be taken to remove more affordable options
Every housing unit devoted to tourists is a housing unit that isn't available for the local people. The Council is right to try to restrict residential housing to residential use.
Buying a house to rent to Disney World visitors was a huge mistake. Disney park traffic is way down.[1] Disney parks raised their prices to the point that they are no longer a middle class destination. Disney World prices have increased 5x in constant dollars since the place opened.[2] Disney parks have now had a total flop - "Star Cruiser Adventure", which cost US$4,800 for two people for two days and is shutting down. Turns out that LARPs don't sell at that price point.
[1] https://insidethemagic.net/2023/07/walt-disney-world-crowds-...
[2] https://www.tiktok.com/@piechartpirate/video/701961608049041...
Our cleaning fee is $50, and before we approve you, we ask - are you really just two to four people? Do you understand, this isn't a hotel, you're staying in our house, so no smoking and no parties. This filters out 99% of the people who are looking for something we're not offering.
We're one of the highest rated Airbnb's in the city. Our neighbors have no complaints. And it shames me into picking up the garbage that New Jersey visitors leave on our street when they park here to go to Dave & Busters.
I think it works because we're closer to the original model - sharing space in our home. These people who buy up properties to be remote landlords or run hands-free hotels, who complain about rules going into place as a reaction to bad behavior? Good riddance. Is that good for stock prices? Beats me, but as far as I'm concerned, when done right, it's good for everyone involved.
Because of this, (1) you take the extra step in screening people and (2) you're there if there is a problem. When I hear of Airbnb problems, it's not when they've actually shared a room in someone's home, it's been a separate property of some sort.
If your neighbor’s house is owned by someone a thousand miles away they’re never inconvenienced by anything that happens in the building itself.
Are you sure of that? What's in it for them?
Pretty sure. I talk to my neighbors. I'm the secretary of the local RCO (registered community organization), we have monthly meetings with the neighborhood. I'm also an admin on the neighborhood Facebook group.
You can take my word for it, or you can look me up, if it's important enough for you.
>What's in it for them?
Well, for starters, once or twice a month, I pick up the trash on my street. I've got a roller bin, a trash grabber, gloves, and a big box of black plastic bags. I live in Philadelphia, we don't have street sweeping, we don't even have garbage cans on every corner.
I'm building a theater on the first floor. It had been a magic theater, it's going to be an intimate multi-disciplinary performing arts space. Hope to make the lobby double as a coffee shop.
When I bought this building, it was in terrible shape. We fixed it up, and during the process, discovered two colonial era privy pits, full of artifacts from the years leading up to and including revolutionary war. I've become a citizen archaeologist and something of a hyperlocal historian. I conducted my first neighborhood tour in conjunction with a local blog, Hidden City, a couple of months ago.
Let me know if you've got any other questions.
Maybe it's just that I can not imagine how a forever changing stream of occupants with zero longer term local interests can be a positive or even neutral compared to long term invested neighbours for anyone but the host.
As far as forever changing, I have several families that have become regulars. Some, annually for a music festival, others just like the price and location. Regulars or one-timers, they all typically spend more at local businesses than locals, or renters. Tourism has pluses and minuses, but so does any industry.
My neighborhood is a blend of homeowners and renters. The landlords are less invested in the neighborhood than me, without exception. The homeowners are a mixed bag. The renters couldn't care less, I suspect that their mothers show up weekly to do their laundry and wipe their asses. (that's exaggerating, but you get the idea) The ones who are as invested, if not more, have lived here since the 70s in property they own, and are definitely NIMBYs. For better or for worse.
So basically it's paying the mortgage on their $295k second home, which is a pretty good deal if you ask me. I don't think middlemen promising that you will make more money off of a deal than you actually do is a new thing, or that it's limited to AirBNB. Take estimates with a healthy grain of salt.
But most people are financially bad at estimates and assume that maximum cash flow is anything close to actual cash flow - hence the laws requiring MLMs to disclose the average compensation vs the highest.
The entire neighborhood has complained to law enforcement, county government (we're just outside city limits), Airbnb and VRBO hundreds of times. Nothing has been done by any of them.
Anyone else been in this situation and had any reasonable solution?
Email mayor, chief of police and start talking to neighbors. At some point you might be able to sue the owners, sue city/policy if they are not taking action to enforce rules(if they exist).
Call cops whenever rules are broken and document.
Eg, start a backyard hog farm. Check local regulations on outdoor lighting and light your yard brighter than the sun. Incorporate a church and hold classical music revivals at appropriate times. Park exceptionally ugly and large equipment anywhere you legally can.
This is the nuclear option but sometimes nuking it from orbit is the only way to be sure.
The mania has passed I think. No one has extra money to travel and stay in Airbnbs. Plus I despise the Airbnb experience. It turned into a list of chores I need to do to make them money. Nah, give me a hotel with professionals paid to clean and do those chores and that know how to do it well. When I travel I want to go out and experience the city, and I noticed that when my family would stay in an Airbnb we would just stay in the stupid house instead of experience the new city. Hotels fix this also.
This is categorically false in the US at least. Average disposable income in the US is $58,947 in 2023 to date (the median number is not easily found unfortunately). This number is up slightly from 2022.
Disposable income was WAY up for about a year from mid 2020 to mid 2021 and people in white collar jobs had broad flexibility. I think it's broadly understood that this combined with low interest rates caused a boom in short term vacation rentals. With interest rates up and people returning to offices, it seems natural that short term rentals as a business would suffer.
In addition, this is the definition:
> "The US Disposable Personal Income per Capita indicates American household income net of taxes for each person."
This number doesn't reflect costs in any way at all. It isn't "disposable income" as most people would use it for day to day conversation i.e. the amount left after I've paid all my fixed costs (and possibly some non-fixed costs like food).
Americans on average have plenty of money to do so. You're just arguing with the BEA definition of disposable income... which I guess is a perspective, but IMHO not a useful one. We could look at real household median income, which is also up https://fred.stlouisfed.org/series/MEHOINUSA672N.
(emphasis mine)
If income increases, but fails to increase enough to match a parallel increase in expenses, the "extra money to travel and stay in AirBnBs" has gone down.
They seem to match this graph for personal savings rate which is down at 4.1% now from highs of 20-30% in the 2020-2021 era.
https://www.forbes.com/advisor/banking/savings/american-savi...
Agreed. It really irks me when a vacation home that I rented for a lot of money hands me a list of chores at the end of the stay, then has the gall to charge me a cleaning fee on top of it. These days I stick to a hotel other than for exceptional use-cases.
Usually I don't like renting but we are in between houses after selling ours and the mortgage on this house would be 1.6x what we are paying in rent with current interest rates, etc. It is hard to justify buying right now.
It depends on the location. In my experience, Airbnb seems to be booming in some places since remote work is the norm. Lots of people now use it as their main provider of housing and for longer periods.
Citation needed.
Airbnb is pretty much the only option for the gap between “stay a few nights” where a hotel makes sense and “stay for 4+ months” where renting a place makes sense.
This is wrong as a general statement: what’s happened is that people have become more discerning about value, and it takes more than dropping $50 at IKEA to make a place cool enough to earn a premium. If your house is in a cool neighborhood close to something unique, that might work but if it’s a car-dependent suburb near a ton of hotels it’s probably not going to command much of a premium. Being near Disney is something but there are thousands of competing options capping how much you can charge.
AirBNB: All those, plus clean up, worry about neighbors, half the time it's more expensive than a hotel, with a better chance of spy cameras.
I suspect many wanted an arm's length almost passive investment, and so they are putting the maintenance burden on to their guests.
Expecting cleanup for a three month summer rental tenant is one thing.
Expecting that for a three day guest is another.
In an area like Silicon Valley, someone who buys a small property new and tries to rent it most definitely will not make the mortgage from rent, especially a single family house.
In October, they put their home online
https://www.airbnb.com/rooms/932495383465985171
“We have absolutely zero bookings in August,”
Robertson says. “This summer is extremely slow.”
And the listing shows no reviews at all.
Is that possible? Why don't they at least have some friends book the apartment and write the first reviews?
Personally, I never rent apartments with less than 100 reviews. That might be extreme. But I would imagine most people won't rent one with no reviews at all.
I live in Airbnbs for half of the year, so occasionally I'll take a gamble on an unreviewed place with good pictures and a well written listing. So far I've almost always had a good experience with a 40-60% discount relative to comparable listings.
Hell, it can be listed as “cockroach infested shithole” and of the price and location is right someone will take it.
The better approach would be to provide excellent service and tell the first guests "You were our first customers. It would mean the world to us if you write a review".
But if that is not what they do, why don't they at least have some friends book the aprtment and write a review? After investing $295,000 - would you really go totally hands-off if you value your investment?
I travel 300+ days a year for work. On occasion I book a regular hotel. Maybe one week per two months or something. It’s not too bad, but longer than that and I want to get out and live like a normal person.
Also, a friend of mine has a home in Palm Springs that he Airbnb'd out two years ago. Now he just has the same people pay the same rate for a month every year. Works out for all.
I think the situation on the ground is actually pretty good.