Airbnb, landlords, and management

[Greg Zelner]

Hi guys, maybe I can get some feedback here from the conservative landlords and/ or investor. I’ve been running Airbnb’s for several years now using sub-renting. (I rent out long-term and ask for permission to Airbnb, in exchange for paying for all routine maintenance and upkeep of the property as well as abiding to specific requests of the landlord. (For example A/C goes out and it’s $3k, I offer to pay half. If it’s something wear and tear related, I pay for the full amount.) I also, agree to screen guests according to their restrictions. For example, if they require no smoking, only 2 guests/ night, or a minimum age of 25, I follow that.

I’m always looking to expand and typically speak to landlords directly or a realtor and am upfront about how I earn a living, but I do regularly get met with a lot of push back and only get an occasional yes.

What I mentioned above is typically very close to how I present my case and even though we have not had any bad experiences due to the nature of the business which we’ve been successfully running for 3 years now, we still get turned away and I can’t understand why as we follow all county and city ordinances as well as the agreement with the landlord to a T. We also increase revenue by covering the maintenance expenses and paying a higher rent. General Liability is covered by the website policy and we also purchase our own if requested.

So, is there any real reason why a landlord with an investment property would be against it?

[Eugene Kemp]

Greg,

The big question in my mind would be liability of the owner of the property. I'm in the middle of this issue at the moment, and studying it from a homeowner/landlord angle, and it is my take that Airbnb does not give you any coverage....their coverage appears to me to be strictly limited to personal property. If someone hurts themself and decides to sue, who is going to take the brunt? You or owner of the property? Just something to consider. I'm learning that the insurance world in general has not really studied or embraced the "sharing economy" that is cropping up everywhere.

[Max T.]

Landlords want the control of knowing and vetting who is living in their property.

Also their insurance policies don't cover short term rentals.

[Michael Guzik]

@Greg H. Good job on doing that and finding a great business model. I wouldn't beat yourself up too much because it's not you it's them. People fear what they don't understand... it is partly because of insurance but I really think it's just the fact they don't know the space and it's very different to their model. They are comfortable with what they have and have been doing and don't want change. Just keep doing you! Good luck!

[Account Closed]

Greg Zelner

Rental Arbitrage is a hot topic these days and I have seen property owners perceptions change greatly from the solid no we used to get. I think you are going above and beyond with what you are providing and wouldn’t blame yourself for any no’s you may get. Its still a fairly new concept and just like any new idea it takes time for people to accept it but also some never do. It’s an educational opportunity and either they get it and see the benefits or they don’t and understand the pitfalls. Neither choice is right or wrong.

I would provide references from other owners. There’s also a program from Airbnb that allows them to have access to who’s staying and your booking schedule.

https://multifamily.withairbnb.com/buildings/friendly-buildings-program.html

You could also offer a small cut of the revenue to get them across the line. If all else fails you’ve done your best.

Happy Hosting

[Greg H.]

Originally posted by @Michael Guzik:

@Greg H. Good job on doing that and finding a great business model. I wouldn't beat yourself up too much because it's not you it's them. People fear what they don't understand... it is partly because of insurance but I really think it's just the fact they don't know the space and it's very different to their model. They are comfortable with what they have and have been doing and don't want change. Just keep doing you! Good luck!

 Obviously ai was tagged by mistake but since I am here.  Why would you think it's "us"?  There are scores and scores of knowledgeable investors on this site who lend a wealth of knowledge.  Since "we" don't understand the model, please help us out from a landlord's perspective:

-Insurance-  many landlord's insurance will not cover this model. What do you do to make sure they are protected?

-Occupancy Tax- how do you protect the landlord in the event the tax does not get paid? Cities will inevitably go after and attach a lien on the landlords property 

-Fines-  many cities are now requiring permits and are fining those who do not have them as well as fines for any other violations.  Again, any liens will attach to the property.  How does your model protect them?