Downsizing after the divorce was painful, but financially SmartI decided to House HackI’m opening my Victorian Brooklyn brownstone to Airbnb guests, hoping to invigorate my cash-strapped bank account and bring life to my stately home.
Well, there were more sparks than I expected.
As I moved downstairs, I was woken in the middle of the night by clanging, knocking sounds like a ship on the high seas and loud groans that must have been heard throughout the neighborhood. It turned out my 100-year-old home was used for more than just short-term stays.
My old mansion was turning into an adult movie set with the same guests repeatedly booking. When they left, I quickly made sure they never returned. But Airbnb’s rules at the time stated that turning away guests at the last minute would rapidly plummet my online ranking, and with it my future income prospects.
My tenants were renting out their apartment on Airbnb without my knowledge and allowing movies to be filmed there.
This wasn’t my only bad experience with Airbnb. I wondered why long-term guests seemed to disappear for the weekend and why there were lock boxes around the fence outside. she Unbeknownst to me, she had a side business renting out apartments to short-term guests.
Another time, a neighbor asked me, “What movie were they working on?”
“Movies?” I replied, confused.
“Yeah, there was a whole film crew there: actors, lighting, sound people, about 20 people,” he said. “I thought you knew them.”
I did not do it.
The shorter the reservation period, the greater the chance of problems
I learned a lot My experience as an Airbnb host New York City has banned vacation rentals of less than 30 days.A basic rule of thumb is that the shorter the reservation period, the greater the chance of issues occurring. this This trend was especially noticeable around public holidays, when Airbnb banned stays of more than one night. Memorial Day and Independence Day.
“Reservations decrease during the off-season.” MAK Real Estate“This is summer in Miami,” he told BiggerPockets, who owns a short-term luxury condo rental at Miami’s famed Fontainebleau Hotel. Miami, When interest rates fall and The level of guests will also drop sharply.”
Kostyashkin manages condominiums owned by associates, investors and family members. “Instead of booking a week’s stay at a high price during peak season, In the off-season, 1-2 day bookings are available at 50% of peak rates. That’s when more problems become apparent.”
Always be insured
Kostyashkin said:
“A few years ago, just before the New Year, there was an incident. Before, Suites Reserved By a group of men in their mid-20s. There must have been a fight., He was 18 when the mirror fell on him, because all four corners went through the frame of a huge mirror that was fixed to the wall with wood. He claimed he was asleep when the mirror fell on him, but that couldn’t have happened. He was badly cut and ended up in hospital. and I ended up needing stitches and a $4,000 hospital bill.”
“The guest blamed us and demanded money. We spoke to Airbnb, who agreed that this story didn’t make sense, as the guest had given us a bad review and the mirror was custom made and part of a luxury hotel condo. obtain It was replaced. The room was closed for a week. As business owners in the hospitality industry, we carry full-time vacation rental insurance, but ultimately, money was lost through no fault of ours.”
Beware of high-rise vacation rentals
Miami is a unique and extremely popular Airbnb market. Vacation Rentals welcome In certain parts of the city, A surge in Airbnb-compatible condominiums is plannedBut Kostyashkin urges caution for other Airbnb landlords and hosts who think managing vacation rentals in high-rises is smooth sailing.
“Everything that goes on in a rental property affects the entire building,” he says. “Five years ago, a guest burned down his entire apartment, causing tens of thousands of dollars in damage. The entire building was destroyed.” To seek refugeA 37-story building. Like many Airbnb owners, he was trying to make it happen. Cheap He didn’t have insurance so he had to pay the full amount.”
Bad events happening in your neighborhood can affect all the vacation rentals nearby.
If the Airbnb tragedy gets publicity, it could have an impact on other nearby vacation rentals, hurting their business. The city could step in, and even banks might be wary of lending to other nearby vacation rental projects.
For example, two years ago, Two teenagers killed 8 people injured During an Airbnb party PittsburghA North Side party attended by more than 200 people headed south. It was the third time in nine days that a shootout had broken out at an Airbnb party. The Pittsburgh City Council immediately responded. was suggested More strict Airbnb Law Limitation on length of stay.
At the time, I was in the process of raising my own capital. housing complex A nearby Airbnb project. My lender also funded the building where the shooting happened and warned me to be careful with short-term rentals. For a while, I thought They may deny me the loan.
of Property Manager I have put in place sophisticated noise monitoring systems and systems to detect the number of mobile phones. In use These are installed in buildings as a safety measure against unwanted guests and party-goers. So far so good.
Final thoughts
While there are horror stories of vacation rentals, there are plenty of investors who have grown profitable businesses without having to deal with evictions or have full-time tenants.
If you’re looking for a passive investing experience, vacation rentals are hard to do passively, but we recommend some good vacation rental software such as: kind It will be much easier. Hospitable helps automate your vacation rentals by automating 90% of guest messaging, syncing calendars across all platforms, and streamlining reminders for your cleaning team.
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BiggerPockets notes: These are opinions expressed by the author and do not necessarily represent the opinions of BiggerPockets.