The global success of the short-letting industry has turned Airbnb into a household name. Across the world, millions of property owners have become Airbnb hosts as part-time hobbies or in small businesses to make some cash. But what exactly are the risks of Airbnb hosting? And what benefits can be gained?

Legalities & Tax

Before you list your property on Airbnb, you may be required to get permission, e.g., from a landlord or homeowners association. Furthermore, depending on where you live in the UK, your local council might require you to pay a holiday let tax or other business tax on any income you earn via Airbnb hosting. Increasingly, many UK cities are introducing occupancy restrictions. London's 90-day rule is relatively well-known, but keep an eye out for similar restrictions across other UK cities. Also, check out our blog on UK tax advice for Furnished Holiday Lets.

Property Security

A frequently cited reason many people decide not to host on Airbnb is the safety and security of their personal belongings. It is recommended that any sentimental or financial value items are removed from your Airbnb property before hosting. Even if you rent out a room in your house, you cannot safeguard these items at all times, so it's best to relocate them. 

There will always be a physical risk if you rent out a room in a property that you continue to live in. Airbnb's security vetting utilises a comprehensive background check. Airbnb allows you to accept bookings from verified users only, and you can usually gather whether a potential guest is trustworthy or not from their reviews and available personal information. Both hosts and guests can verify their identity using government-issued identity documents and connect their Airbnb and social media accounts.

Taking precautions to ensure your guests' health and safety, such as installing a carbon monoxide detector and removing hazardous items, will limit the chances of your guest injuring themselves and suing you. 

Airbnb Insurance 

Airbnb provides UK hosts with up to £1 million coverage in liability insurance. This is activated in the rare event a guest gets hurt, or the property is stolen or damaged while guests occupy your property. Airbnb also offers Host Damage Protection to UK hosts, to the value of £1million in the rare event your property or belongings are damaged by a guest during an Airbnb stay. Find out more here.

Be mindful that Airbnb insurance doesn't cover general wear and tear, so you need to charge a security deposit to cover any potential damage. Either you, a co-host, or a trusted cleaner must carry out a check of the Airbnb after check-out so you can identify any damage before a new guest checks in. You won't be eligible to file a damage claim if you cannot identify the guest who damaged your property. It's always best to try and solve the issue with the guest directly before filing a claim to save time. You have 14 days or until the next check-in to file a claim (whichever comes first). 

Income Benefits

It's no secret that short-letting can earn property owners a substantially higher income than the traditional long-term let, especially when using Airbnb's dynamic pricing algorithm to optimise your nightly rates. Income estimates can provide a rough guide, but your nightly rate will depend on various factors, including location, property size, amenities, and any add-on services.

Payment Guarantee 

With Airbnb, payment is always released within 24 hours of guests checking in, provided there are no issues. Guests have up to 24 hours to raise any issues with Airbnb that warrant a refund. 

Please note, however, that Airbnb can refund a guest payment if the listing is misrepresented, there are cleanliness issues, or if you fail to provide the key to the property or cancel a reservation at the last minute. Never accept payment outside of Airbnb or a certified booking platform such as Expedia, Booking.com, or VRBO. You will not be protected if the guest attempts to scam you, plus Airbnb could penalise you for trying to avoid their fees. (The management fee equates to 3% of your profits)

Help is never far away

Due to the staggering rise of the short-letting market, various property management companies have emerged across the UK to help property owners short-let their rentals on the market. It's no secret that if you hope to manage more than one Airbnb property, you will require some type of help. From cleaning services and booking management to fully managed businesses', Airbnb hosts have a range of support. A property management fee will have to be factored into your outgoings, it allows you to scale your Airbnb business and offer a better work/life balance.

To find out more about our fully-managed services, please visit www.passthekeys.co.uk.