The Ongoing AirBnB Saga

AirbnbAirBnB, the website that lets tenants sublet your apartment to perfect strangers for a night here and there, is a source of angst for the hotel lobby and for some landlords in particular. Others, meanwhile, are getting on the bandwagon.

Government also views AirBnB as a problem, but mostly because the hotel lobby is unhappy. Why would someone pay $200/night to rent a room at the Marriott when your tenant is offering a perfectly nice apartment nearby for $100/night? And if the hotel chose to compete on price, they’d pay the tourism tax but the tenant wouldn’t. So the hotel lobby are asking that AirBnB require registration, or be disallowed, or be taxed. In many cities, that story is “to be continued”.

Landlords seem to have three choices:

  1. Prohibit tenants from AirBnB’ing your space and closely enforce this prohibition.
  2. Become an “AirBnB host” and convert space into AirBnB rentals to do it yourself.
  3. Partner with your tenants to take a cut of their AirBnB action, but let them manage it.

Prohibiting Tenants

Our standard lease disallows subletting in any form. Does AirBnB require special enumeration? We think so, and may soon be adding a clause.

Prohibition makes sense in Massachusetts, especially, because guests who refuse to leave become tenants-at-sufferance. This creates legal hurdles for landlords seeking to evict so-called “squatters”.

Building AirBnB Spaces

Yes, you can do this. Take a one bedroom and list it on AirBnB. If it’s in a desirable vacation town, you may rent it daily for much more money than a local would be willing to pay under a lease.

The advantage of this approach is subtle: minimal wear-and-tear. When does most damage happen to an apartment? During move-in and move out. How else could Aunt Fran’s antique dresser have pushed its way up those narrow stairs, if not for the generous give of your plaster walls and staircase baluster?

AirBnB renters have no antique dressers to move. They have a suitcase and that’s it. When they leave, you pay a cleaning service to change the sheets and towels, mop and wipe. That’s all there is to it.

Partnering with your Tenants

AirBnB recognizes that landlords have been picking option one or option two above. This is bad for their business, because many of their hosts have been or could have been renters. In January Road Warrior Voices reported that AirBnB will be working on ways to give large landlords a cut of what tenants take in. It seems to be a case-by-case negotiation.

This opens up lots of interesting questions. Suppose things go well. Do apartment rents rise as all landlords tell tenants to AirBnB the place?

Suppose things go wrong. What if the AirBnB renter turns out to be a kleptomaniac and walks out with the refrigerator? The tenant and the landlord are in business together, so does that mean they share the losses as well as the revenue? How about for liability insurance? What about the mortgage? If the tenant is a bad AirBnB manager, can the landlord evict them as they would a commercial tenant? Can a lease specify management prowess as a condition of renting?

This is all “to be continued.” If you have AirBnB experience, let us know!

One Response to The Ongoing AirBnB Saga

  1. Louise says:

    We are only a 2 unit plus in-law apt in Metrowest area and recently started renting the inlaw. We don’t take short term to minimize disturbing our long term and greatly appreciated tenants of 2 larger apartments. We are starting to get month long guests- 1 who was relocating to area an another who was downsizing & new condo not ready.
    AirBNB recommends a rental agreement if over 28 days.I could use help with this. I lost 1 potential guest who I’m guessing wanted to avoid the extra paperwork for short term lease. With the next I didn’t bother not wanting to loose the income.

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