The Dangers of Short Term Rentals or Airbnb
A lot of people have asked me lately, “What is Airbnb?” Wikipedia.org says that “Airbnb is a website for people to list, find, and rent lodging. It has over 1,500,000 listings in 34,000 cities and 190 countries.” Most people I encounter think Airbnb is the thing – kind of like Kleenex is a brand and tissue is the thing. People call short term rentals Airbnb. So whether or not you use Airbnb.com as the tool, it is a short term rental property.
So what do you know about short term rentals? Many investors and real estate agents know enough to be dangerous, and, yes, it can be dangerous. What’s the danger?
- Do you need a permit?
- Do you have to pay taxes on the income you receive?
- Does your neighborhood allow short term rentals?
- What kind of insurance do you need?
The answers to all of these questions is – it depends! With the influx of short term rentals, inevitably there are people who are not aware of these dangers. Don’t be one of them. If you are thinking about investing in or turning your property into a short term rental, do your homework. If you are buying property for the purpose of short term rental, it would be wise to hire a Realtor with experience in short term rentals. They can help answer questions as well as lead you to the local ordinances and help you avoid pitfalls.
You will want to decide whether you want to manage the property on your own or if you will have a management company handle advertising, turning the property for each guest, maintenance requests, bookings, cancellations, collecting and refunding money, etc.
There is definitely money to be made in short term rentals if you have a great property in the right location. Some short term rental owners make enough money in one week to pay for an entire month of mortgage payments – or more. Don’t be afraid of short term rentals, just be educated. We’ll talk about short term rentals more in the coming weeks so stay tuned!
Photo courtesy of Stuart Miles via freedigitalphotos.net
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur baby, Tyler, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.