As a real estate professional who specializes in investment, Jason Cohen Pittsburgh founder Jason Cohen knows how valuable paying attention to market trends can be. Airbnb has had a significant impact on real estate markets across the country, including Jason Cohen’s home city of Pittsburgh. In this piece, Jason assess the pros and cons that hosts must weigh before listing their properties on the site.
The age of using Airbnb to crash on an inflatable mattress in someone’s spare room has come and gone. Now, guests expect a full-fledged experience: immaculate bedrooms, sleek kitchens, friendly hosts. Since its inception in 2oo6, Airbnb has taken the short-term rental market by storm. Currently valued at over $30 billion, the online company now stands as a formidable competitor against traditional brick-and-mortar hotels. Some hosts swear by the site as an infallible way to make money off of a well-placed properties; others complain about the time and effort maintaining an such a residence demands. More and more traditionally-minded real estate investors are beginning to ponder the question: should they opt into the Airbnb craze? The pros and cons of doing so are outlined below.
High Potential Returns
If Airbnb property owners are able to attract a steady stream of short term renters, they have the potential to net a high return on their investment. According to partners and Airbnb hosts James and Erin Carlson, a furnished and well-kept Airbnb property can bring in significantly more income than an unfinished long-term rental can in the same period of time. However, the pair does note that pricing and maintaining the property takes a considerable amount of research and time, as guests expect to pay less than hotel price for an equal – if not better – residential experience. If a property owner has the time and resources to maintain the property, however, the effort may well be worth the expense!
Breaking even has become more difficult.
Airbnb has been up and running for over a decade – and in that time, has become somewhat less lucrative for hosts. According to findings published in the NYC-based real estate magazine The Real Deal, “In order to break even with the average annual rent for a long-term lease, an Airbnb host would have to rent an apartment on the home-sharing site for an average of 216 days, up from 194 days in 2012.” Those seeking to break into the Airbnb scene may find themselves struggling to attract the sheer volume of guests they need to keep the property profitable.
Hosts will hone their business skills.
Becoming a successful Airbnb host require business savvy – and those who don’t have it when they begin hosting will either hone their business skills or take their listing off of the site. For those who don’t mind the effort and risk, becoming an Airbnb host can be the perfect opportunity to develop a greater mind for business and investment strategy.
Local and state laws can be difficult.
Always, always check local legislation before becoming a host. Some states have begun cracking down on short-term rental properties by imposing significant fines on hosts who either failed to file the proper paperwork or are ineligible to rent out their residences for short-term tenants.
Should you become an Airbnb host? It depends entirely on your circumstances. Take these points into consideration before you submit your property to the platform!
*Originally posted on JasonCohenPittsburgh.com