This isn’t meant to discourage you. I just want to be honest about the biggest roadblocks that come along with running an Airbnb business. So that you can make an informed decision about whether or not renting out your place is a good idea. Now, I’m also going to give you 10 reasons why you should start an Airbnb. Because I totally love this business.
Is it easy? No. But if you enjoy creating a nice experience for people and aren’t afraid of a little project management, then running an Airbnb can totally be worth it. Oh yes, and the money-making side of it is pretty great too.
Ok. So let’s look at the main downsides of running an Airbnb business.
Table of contents
- Regulatory challenges
- Seasonal fluctuations
- Property management
- Unexpected costs
- Competition
- Terrible guests
- External factors
- Legal liability
- Negative reviews
- The Airbnb platform
1. Regulatory challenges
You’ll need to find out about your local laws, possibly your neighborhood rules (think HOA and the likes), adapting your house (and maybe getting the necessary construction permits), and taxes you have to pay for your rental’s income.
2. Seasonal fluctuations
You’ll probably struggle with periods of low occupancy during off-peak season. That will impact your overall income. Smart hosts factor this in before even investing in an Airbnb property. There are strategies to deal with low occupancy, like adjusting your price or promoting your Airbnb on social media.
3. Property management
This is where you can let your inner project manager shine. It’s also where a lot of hosts feel overwhelmed. It requires time and effort to manage a property (creating and maintaining the listing, booking assistance, customer service, looking for reliable contractors, scheduling cleaning, the list goes on).
4. Unexpected costs
Even if you’ve created a cute little budget for decorating and fixing up your Airbnb, you can bet that unexpected issues will pop up. Whether it’s unplanned maintenance or damages caused by guests, there will be more expenses than foreseen.
5. Competition
Airbnb has gotten very crowded. Hosts who used to be booked out for months now struggle with getting bookings. You need to understand the different tools and techniques to make your Airbnb stand out. Lowering your nightly rate could also work, but will your Airbnb remain profitable?
6. Terrible guests
Yes, that’s a thing. Many guests are just fine and even lovely. But there are some guests that are just downright frustrating or that could trash your place. You can learn to vet your guests, but it won’t prevent all the problems. It goes without saying that you’ll need to be great at communication and conflict resolution.
7. External factors
An economic slump can force people to stay at home. So can travel restrictions. Though I have to admit that the restrictions that came with the pandemic helped a lot of Airbnbs thrive (because of distancing measures). But this just shows that not everything is under your control.
8. Legal liability
You’ll need to check what kind of insurance you’ll need. Yes, using Airbnb’s platform automatically includes AirCover. But you should read their fine-print carefully and decide whether or not that’s sufficient for you.
9. Negative reviews
Suck. There’s no other way to say this. Some guests think handing you 3 or 4 stars is great (it’s not). Others deliberately leave a bad review to spite you. And sometimes your hosting skills just aren’t good, let’s be honest. There are ways to deal with negative reviews, and even prevent them for as long as possible. But it’s better if you accept that you will get one eventually.
10. The Airbnb platform
Ok, it’s not a super difficult platform to use, but it will still require you to get acquainted with listing creation, booking features, messaging options, and whatever else the folks at Airbnb add in the future. Also, you can’t control the algorithm. But you can learn a couple of SEO techniques to rank higher in the search results (and get more bookings).
So, what’s your decision?
By the way, the #1 thing that I’ve found helpful in getting more bookings, attracting great guests, and that even helped me raise my nightly rate was to focus on getting excellentreviews from my guests. After A LOT of trial and error, I retraced all my steps and packed everything into this blueprintso you can copy all my tools.
