For those that haven’t heard of Airbnb, the operations are pretty straightforward. Airbnb is in the lodging industry, acting as an intermediary to connect hosts and guests. Hosts list their property on Airbnb, while guests look for bookings sorted by location, price, date, and number of guests. The company doesn’t own any of the real estate listings, and they don’t host events – they simply collect a commission when a guest rents from a host. Hosts are not present throughout the guests’ stay, but Airbnb’s statistics show that problems between parties rarely arise.
If you’re a property owner, Airbnb could be an additional source of income. As a host, you list your property on the website, and give guests the opportunity to rent the property from you on a nightly basis. This option is particularly enticing for folks with a second home, condo, or apartment in a popular vacation destination. Real estate owners have used the service to help pay off expenses directly associated with the property, or to put money aside for retirement or college tuition.
Airbnb is to real estate as Uber is to transportation. Airbnb has become a major competitor for hotels, in the same way that Uber and Lyft have been a shock to the taxi industry. Airbnb offers property owners the opportunity to make more efficient use of property they aren’t using as a primary residence. Because of the potential risk, Airbnb offers property damage protection and accident insurance for its hosts.
Hosts can additionally protect their property with “House Rules” that must be followed, and requirements for who can book a reservation. Like most online and mobile apps, Airbnb also has a review system and seamless communication between guest and host.
Airbnb is a unique and growing opportunity for property owners. All signs indicate that the real estate industry will continue to move in this direction. The system isn’t perfect, but it’s doing everything it can to be as close as possible. Legislators and local governments have begun implementing regulations that limit how often property owners can rent out their real estate, and some municipalities now require a license. However, some cities and states have passed zoning ordinances to benefit the Airbnb system and avoid government interference.
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