Interested in turning your house into an Airbnb rental? Homeowners opt for this route for various reasons. For instance, when their children move out, they often find themselves with a spacious house and several unused rooms. Alternatively, some individuals own apartments they rarely occupy due to frequent work-related travel or extended stays at their partner’s place.
What’s certain is that there’s ample profit to be gained by participating in the sharing economy. With over 6 million listings worldwide, Airbnb spans major cities such as London, Paris, Dubai, and Kuala Lumpur. Homeowners of all ages recognize the financial benefits of listing spare rooms or renting out their entire space while they embark on vacation.
Before transforming your primary residence into an Airbnb for additional rental income, it’s essential to consider the potential advantages and disadvantages that can impact your daily life. In this guide, we’ll walk you through the intricacies of renting out your primary residence on Airbnb.
Pro: Reduced Booking Pressure
Renting out your primary residence comes with the advantage of experiencing less pressure to secure bookings. In many instances, the absence of guests in your spare room doesn’t result in financial losses. Unlike investment properties that can suffer when vacant, the occasional unbooked weeks in your short-term rental are far less financially burdensome. Moreover, if you’re looking to earn extra income while you’re away for a month by listing your place on Airbnb, the absence of renters during that period isn’t a catastrophic setback.
Con: Necessity to Remove Personal Belongings
Consider Emily, a frequent traveler for work, who routinely rents out her primary residence on Airbnb during her three-week overseas trips. Each time she prepares her home for Airbnb guests, she undergoes the laborious process of removing her personal belongings and securely storing them in safes and cupboards.
This task can be quite unenjoyable for Airbnb hosts, as it requires considerable time and effort. Consequently, many hosts opt to keep their living spaces devoid of personal items. However, this approach can make it feel like you’re residing in someone else’s home, making it challenging to strike a balance between enjoying your own space and safeguarding your valuables.
Pro: Tax-Free Allowances
It’s crucial to engage in discussions with your accountant or tax advisor before embarking on the journey of renting out your home on Airbnb, as tax laws vary significantly from one country to another. In the UK, for instance, homeowners who rent out a room within their primary residence may be eligible for a tax-free allowance. Moreover, if your property qualifies as a Furnished Holiday Let in the UK, you can take advantage of claiming expenses related to fixtures and furniture during tax season.
Con: Registering for VAT
In the event that your Airbnb rental of your primary residence becomes highly lucrative and generates a substantial income, residents in the UK might find themselves obligated to register for VAT. This, in turn, could lead to bearing additional costs personally or necessitate an increase in your nightly rental rates. Furthermore, property owners in London should be mindful of the 90-day rule, which has the potential to impose limitations on their Airbnb earnings.
Pro: Hosting Fascinating Travelers
Airbnb draws in travelers from every corner of the world, offering a delightful opportunity to connect with individuals from diverse cultures. It serves as a wonderful avenue for sharing valuable insights about your neighborhood, ensuring that guests make the most of their stay. Whether it’s recommending your favorite wine bar or suggesting the best spots for kids to play, you become a local guide. Welcoming guests into your family home can even lead to the development of enduring friendships.
Con: Constant Availability for Guests
One of the drawbacks of converting your primary residence into an Airbnb is the potential transformation of your tranquil family abode into a working space. Welcoming new guests often entails providing clean sheets, fresh towels, a warm reception, and possibly even a welcome gift.
As an Airbnb host, you must be ready to manage it as a business, which includes responding to emails round the clock, assisting guests who may have lost their keys, and handling various other concerns. This continuous involvement can significantly affect your overall enjoyment of your home.
Pro: Generating a Reliable Passive Income
Having an apartment or family home in a sought-after location presents an opportunity to earn substantial income by listing it on Airbnb. Some individuals are able to finance their own travels by renting out their property on the platform while they are away. If you are unfazed by the constant influx of new guests, Airbnb can become the passive income stream you’ve been envisioning. After all, the space is available, so why not capitalize on it?
Con: Decorating Dilemmas
One crucial consideration is how you want your property to be perceived on Airbnb. Attracting guests involves more than just listing a spare room; interior design and decor play a significant role. Colors you might prefer for your family home’s walls may not be appealing to potential guests.
Similarly, a sofa that you personally find exceedingly comfortable might be prone to staining, making it a less than ideal choice for an Airbnb property. If your aim is to maximize earnings through Airbnb, your decor choices should cater to travelers rather than solely reflecting your personal tastes.
Unlock the potential of making money from your primary residence on Airbnb, all while bypassing the challenges of guest relations and marketing. Keey, a seasoned Airbnb management company, boasts a team of skilled professionals dedicated to transforming your home into a thriving holiday rental.