With over five and a half million active Airbnb’s in the world it can be tempting to want to get into the market yourself. One of the easiest and most cost-effective ways to do this is by simply turning your own home into an Airbnb.
So, if your spare room is hardly used, or your kids have recently moved out this could be a great time to test the waters in the Airbnb market.
However, there are a lot of things to consider with this decision as it’ll have a large impact on your usual day to day. Below we have listed the main pros and cons of listing your primary residence as an Airbnb.
Pro #1 – Passive income
This is a great way to earn a passive income as you’re already paying your home bills so you might as well make some extra money from the unused rooms in your house.
For a double bed private room, you could earn up to £50 per night. Or if your property is in a highly sought-after location, like near a major city, you could charge up to £100 per night.
To get a better idea of how much you could earn try using Airbnb’s What’s My Place Worth tool which makes an estimation based on your property type and location.
Con #1 – Being available around the clock for guests
Being available 24/7 is quite a major downside to renting out your primary residence. You run the risk of your home starting to feel like a place of work as there’s no escape from your guests.
As an Airbnb host you need to be prepared to meet your guests’ needs at all hours of the day, provide assistance where required and deal with changeover days. Having all of this operating out of your own home can be quite disruptive, so make sure to think this through before taking the plunge and listing your house on Airbnb.
Pro #2 – Less pressure for bookings
Renting out your primary residence means a lot less pressure for securing bookings. For this reason it can be a great way to get started and find your feet with Airbnb hosting.
With other properties, vacancies mean losing money due to bills and any mortgage fees. By renting out your primary residence there’s no added stress of making sure you’re not running at a loss.
You can use your primary residence to take your time learning to use Airbnb and find out what works best for you, at your own pace and without any financial pressure.
Read Now: 10 Tips to Get More Airbnb Bookings
Con #2 – Personal belongings
An unfortunate downside of letting strangers into your home is the reality of keeping your personal belongings safe. This is especially true if you’re thinking of renting out your entire place while you’re away.
You’ll need to collect your belongings and store them securely while your guests are staying. This can be quite a large task so some people choose to keep their place free of any personal items. But this can take away from your home feeling homely so it’s up to you how you choose to navigate this issue.
Of course, if you plan to only rent out a private room in your house and will be at home while your guests stay, you only need to remove personal items from the room your guests are staying in.
Pro #3 – The people you meet
Airbnb is used by people from all around the globe so you’re guaranteed to meet interesting people, many of whom you never would have crossed paths with otherwise. If you’re a social person and love to connect with new people this can be a great perk to opening up your home to travellers.
Con #3 – Decorating
Interior design is a large aspect of being successful on Airbnb; you need to think about how you want your property to appeal to potential guests. This means making decisions based on creating an inviting space for guests rather than your own personal tastes.
You want your home to be enticing to guests and renter-friendly. That often means neutral colour palettes and reasonably priced furniture so any damages are easy to replace. This can be a deal breaker when it comes to your own personal home as it’s a large compromise to make.
Pro #4 – Tax free allowances
If you live in the UK and are renting out a private room in your residence you may be eligible for a tax-free allowance. The government have a scheme that allows you to earn up to £7,500 from your private room before you have to pay any tax on your earnings.
Tax laws differ by country, so if you’re not in the UK make sure to contact an advisor before committing to renting out your property.
Con #4 – Registering for VAT
However, if you earn more than the £7,500 allowance you’ll need to complete a tax return. Running an Airbnb isn’t classified as self-employed, Airbnb rentals usually fall under the HMRC rules of Holiday Letting or Rent-a-Room.
Registering for VAT can be confusing and stressful, so if you’re planning to make your Airbnb a business this is an important factor to consider when making your decision.
Although it comes with compromise, turning your primary residence into an Airbnb can be a rewarding experience and a great way of easing yourself into the world of Airbnb hosting.
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For further advice on managing your Airbnb contact our expert advisors at Keey.