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3 Risks of Investing in AirBnB’s

Rent It Network - Wednesday, February 26, 2020

Airbnb Inc.  was founded in 2008 to serve as a feasible substitution to traditional hotel fares. This company provides a platform for home owners or investors to offer temporary housing to travelers by leasing a single room or the entire property for any duration of time. While Airbnb’s have proven to be a profitable method of revenue for many hosts, predicted market trends may prove to decrease profits long-term. 

  1. Airbnb’s are a new business model:  Airbnb’s are a fairly new method of short-term rentals. This industry has only been in existence since 2008 and there is no evidence of how properties funded by inconsistent rental income will survive in a down turn of the housing market. Although there is no way to determine when the next downturn may occur and what effect it may have, it is expected that many owners are not prepared for economy shifts and may suffer financial hardship.
  2. Regulation Changes may alter Airbnb protocol: In the last few years, short-term rentals have encountered regulation changes in many cities. Cities with frequent short -term travelers, like Las Vegas, have recently banned new short-term rentals entirely. There are other examples of short-term rental prohibitions nationwide, and this trend will only continue as short-term rentals become more popular. 
  3. Potential Risks for Home Owners: As competition increases and security risks decline due to advanced Airbnb screenings, home owners may be inclined to take out additional insurance to accommodate additional guests in their home. While this protects owners against injuries and damages caused by tenants, this can prove to be unfeasible during periods of vacancy. 

If you’re on the fence about market shifts, insurance risk or protocol changes, contacting a realtor can help you understand potential risks.  When you’re in the market for alternative solutions to short term rental contact the experts at Rent It Network for always fast, always responsive and always professional service. Text Rent It Network at 813- 534-4662 today to take a collaborative approach to the best rental home solutions for your property.