10 Things You Need To Prepare For Before Becoming An Airbnb Host
Were you interested in becoming an AirBnB host after seeing other people sharing their success? Let me tell you that it’s not all sunshine and rainbows.
People love to focus on the positives and ignore the negatives. The difference between having a tenant on a yearly lease and a guest for a few days is night-and-day.
A long-term rental is more like set it and forget it meanwhile a vacation rental is a new tenant every booking which means different personalities. You should expect to run into problems while running a short-term rental business. It’s important to be aware of the potential downsides before you decide to become a host.
Here are things to watch out for:
1. Guests may not respect your space
I’ve had guests smoke inside my house and leave excessive trash all over the house. I’ve had guests host parties and my cleaner would show up seeing red solo cups everywhere in the house. My cleaners even found weed once!
My cleaners spend extra time after we have guests like these. I compensate them appropriately for the extra time.
2. Things will break during a guests stay and you’ll have to fix it
As a host, you’ll need to be prepared to handle regular maintenance and cleaning tasks, but also address when things break. This can be a significant time and cost commitment.
I had a guest drive their car over a water line creating a leak that didn’t bring water into the house. The guests weren’t apologetic at all and were demanding that I fix it because they can’t shower. I was manning my phone for HOURS and it took hours for my plumber to fix it at midnight in the pouring rain. Meanwhile, my guests were demanding when it would be fixed.
I cannot stress the importance of having the right insurance policy. I recommend Steadily Insurance.
If you don’t have the right policy and you need to file a claim, your insurer can reject your claim because your policy doesn’t cover short-term rentals. Traditional landlord insurance usually does not damage caused from a short-term renter so you need to get short-term renters covered which Steadily offers!
Another time, the AC stopped working during peak summer time. I couldn’t get a technician out there for hours since they were already busy and had a schedule to follow. It was fixed a few hours later but guests can be really unpleasant.
3. It takes time to get AirBnB’s host protection to pay out
When guests damage your home or household items, AirBnB has a host damage protection for up to $3 million if your place or belongings get damaged.
However, you are required to file a claim with photo evidence and receipts. I’ve filed on three separate occasions and each time, it took almost two weeks to resolve. Every interaction with AirBnB asking for purchase receipts and company invoices with business cards, it takes several days for them to review it leading to a delay in payout.
They never made me whole since AirBnB doesn’t cover replacement cost but the items’ diminished values. Still, it’s better than nothing.
4. You will experience months where you lose money
Even the best AirBnBs may experience negative cash flow months meaning it’s losing you money. The nature of AirBnB is that it’s largely seasonal and unpredictable based on location, the economy, demand, etc.
There were months when my properties lost my thousands, but my other properties would make up for that shortfall. Since I started hosting in Dec 2020, I’ve had maybe 4 months of negative cash flow ranging from several hundred to several thousand. Overall, I’m largely positive because there were a few months where I cash flowed $8,000 in a month!
Just be prepared to have a healthy reserve fund. I keep a fund in my Marcus HYSA where I keep my reserve funds and my investment funds in one account.
5. Guests will cancel and ask for a refund
There have been times when a guest would be scheduled to arrive within a week and I receive a message that they want to cancel and ask for a full refund.
I keep my policy to “Strict” which wouldn’t allow for any refund within a week of their stay. In most markets, it’s hard to get a booking within a week of a stay. The sweet spot has been a month out for me.
Sometimes, the reason seems legitimate and other times, it seems like their plans fell through and their entire group won’t be attending.
I tell them to contact AirBnB and AirBnB support acts as a mediator. It’s an uncomfortable conversation to have with a guest and you’ll have to use your best judgment. I’ve had a guest cancel and rebook for the following month. Other times, I refunded the entire stay because I felt confident that I’d get a new booking, which I did.
6. Guests will be unsatisfied with your place and ask for a refund
There have been other hosts who experienced terrible guests who would stay for a night and then ask for a refund for cleanliness reasons.
I had one guest take pictures of the outside deck that had some leaves and pointed out every single thing like a scratch on a cabinet.
Some suspect that guests do this to get a free night stay and AirBnB is very guest-oriented so they refund their stay and the host is out of money and has to pay for another cleaning.
7. Guests will give you a bad review
Reviews can make or break your property. Negative reviews will deter other guests from booking your place. I’ve had a handful of negative reviews which brought my rating down.
Unfortunately, AirBnB reviews need an overhaul because it’s very much like Uber/Lyft ratings. One rating could bring you down so low that your listing gets suspended if you don’t have enough positive reviews to keep it above mid-4s.
You could try to get a review removed if it falls under one of the descriptions that AirBnB allows for removals, but in my experience and many other hosts, it’s VERY hard.
8. Guests will bring a pet without notifying you to avoid a pet fee
Unfortunately, our furry friends leave pet hair all over the place. It’s very difficult to get rid of in a timely manner and cleaners have to spend extra time on a property. To accommodate this extra work and time, pet fees are the norm.
However, a lot of guests “forget” to include their pet or fail to mention they’re traveling with a pet. I’ve had several guests bring pets without notifying me and I only see it through the Ring Doorbell camera.
If you have a same day booking when your guest checks out, this would mess up your cleaner’s schedule who didn’t anticipate staying an extra hour longer to address the pet hair.
9. Guests will steal your household items
Most recently, I had a guest steal my two hair dryers. Unfortunately, I only knew when a later guest mentioned there were no hair dryers after I pointed out where they would be located. I couldn’t be sure which guest took them so I had to purchase new ones.
It sucks, but that’s the reality of short-term rentals. Your cleaners won’t notice every single detail unless it’s a major item like a TV and it’s what I consider the cost of doing business in this field.
It’s best not to put anything you intrinsically value in your properties so you don’t lose something that is meaningful to you.
10. Guests will try to scam you for a refund
Similarly to 6, hosts have suspected that their guests create uncleanliness and submit a photo as evidence to AirBnB to get a full refund. It’s a tactic that has caught on.
I had one guest do this. The guest booked the same day and checked in. After spending nearly 10 hours at the property, the guest complained and canceled their stay with AirBnB for a full refund. From my perspective, it seemed like they wanted a place to crash for a few hours before their drive back home. Many hosts don’t accept late night bookings on the same day. He even said he doesn’t mind staying the night when I already offered a full refund to get out. In the end, I ended up losing money for that and I of course reported the guest to AirBnB to flag their behavior.
Being an AirBnB host can be stressful and you will eventually have to deal with troubling guests. To be a successful and less stressed AirBnB host, it’s important to keep your emotions out of the property and to remember that you’re running a hospitality business. It’s also important to treat your guests from a hospitality perspective for great reviews and for the long-term success of your business.
