There are many reasons why homeowners turn their primary residence into an Airbnb. Maybe their kids have gone and they now have a huge house with lots of empty rooms or maybe they have an apartment that they don’t spend much time in because they are always travelling for work or staying-over at their partner’s flat.
What’s certain is that there’s plenty of money to be made from becoming part of the sharing economy. Airbnb now has more than 6 million listings all over the world – from London and Paris, to Dubai and Kuala Lumpur. Homeowners, young and old, are seeing the financial value of listing a spare room or letting out their place when they go away on holidays.
Before you turn your primary residence into an Airbnb for the extra rental income, you might want to think about the pros and cons on how this will impact your day-to-day.
Here’s our guide to the ins and outs of renting a primary residence on Airbnb…
Pro: Less pressure to get bookings
If you rent out your primary residence, there’s less pressure for you to get bookings because in most cases you won’t be losing money if your spare room is vacant. If your short-term rental is not booked for a couple of weeks, it’s not as financially disastrous as having an investment property that is sitting vacant without long-term or short-term tenants. Similarly, if you’re keen to make extra cash while you go away for a month by putting your place on Airbnb, it’s not the end of the world if you can’t find someone to rent the space during that time.
Con: Your personal belongings need to go
Sarah travels frequently for work. In fact, every few months she goes abroad for three weeks and during that time she rents her principal residence on Airbnb. Every time she prepares her home for Airbnb guests, she goes through the same process of removing her personal belongings from the space and locking them up in safety boxes and cupboards. As you can imagine, this is not the most fun way to spend your time as an Airbnb host. For this reason, many hosts will choose to keep their place free from any personal items but that can leave you feeling like you’re living in someone else’s home. Finding the balance between enjoying your home and protecting your valuables can be challenging.
Pro: Tax-free allowances
Tax laws differ greatly between countries and it’s important you talk to your accountant or tax advisor before committing to renting out your home on Airbnb. In the UK, if you’re renting out a room that is your primary residence you may qualify for a tax-free allowance. If your property qualifies as a Furnished Holiday Let in the UK, you can also benefit from claiming the cost of fixtures and furniture when it comes to tax time.
Con: Registering for VAT
If you are highly successful in renting out your primary residence on Airbnb and earn a considerable amount of money from it, there’s a chance that you will have to register for VAT if you live in the UK. This will result in you having to absorb the extra costs yourself or raising your nightly rates. If you’re a property owner in London you also have to be aware of the 90-day rule which could limit the amount you earn on Airbnb.
Pro: Sharing your space with fascinating travellers
Airbnb is used by travellers from all corners of the globe. It’s one of the easiest and loveliest ways to connect with people from other cultures. It’s also a chance for you to pass on precious information about your neighbourhood to help guests get the most out of their stay – from your favourite place to grab a wine, to the best play areas for kids. Allowing someone to come into your family home and stay with you can result in long-lasting friendships.
Con: Being available 24/7 for guests
The downside of using your primary residence as an Airbnb is that there’s a risk that your relaxing family home can turn into a workplace. New guests require clean sheets, fresh towels, a warm welcome and possibly a gift pack. As an Airbnb host, you need to be prepared to treat it like a business which means answering emails at all hours, assisting with guests who have lost their keys and dealing with all sorts of other issues. This can really impact on your enjoyment of your home.
Pro: Earning a solid passive income
If your apartment or family home is in a sought-after location, you could earn decent money from listing it on Airbnb. Some people are able to fund their own travel by renting their place on the platform while they’re abroad. If you are not fussed by the constant coming and going of new guests, Airbnb could be the passive income you’ve been dreaming of. After all, the space is there so you may as well make money from it.
Con: Decorating conflict
One thing to keep in mind is how you want your property to come across on Airbnb. Attracting guests to stay with you is not just about listing a spare room – there’s a lot to consider in terms of interior design and decorating. Certain colours that you might want to paint the walls of your family home, might not be very enticing to potential guests. Or a sofa that you find wonderfully comfortable might be prone to staining easily which means it’s not the ideal choice for an Airbnb property. If you are serious about making money from Airbnb, your décor choices need to be tailored for travellers rather than your own personal tastes.
Imagine being able to make money by renting your primary residence on Airbnb without the downside of dealing with guest relations and marketing? GuestReady is an experienced Airbnb management company with professional staff who can help you turn your home into a successful holiday let.
Find out more about our services or speak to one of our hosting experts today.