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AirBnB is probably one of the most successful examples of the gig economy. This is the way that many of us are leveraging something like a house or a car to make extra cash. The way AirBnB works is that you essentially rent out a room or your whole house. So, you could make money while you’re away on holiday. Or if you have a housemate who moves out you could fill their room for a few days at a time. Perhaps you have a child who has just left for university and you want to make use of their old space. Whatever the reason, if you have a sleeping space you can earn money from it with AirBnB.
One of the reasons why AirBnB works is that it offers people looking for somewhere to stay in a cheaper, and more interesting option than a hotel. A top price hotel may be far too expensive but a beautiful penthouse could be on the cards via AirBnB. Accommodation via AirBnB tends to be a more personal experience – you can live like a local for a few days – while hotels can feel sterile and cold. However, while we could go on listing the benefits of AirBnB, recent events have seen its shimmer start to fade.
There have been a number of legal actions that have arisen from problems with AirBnB guests who have trashed their accommodation or disturbed the neighbours. We’ve also seen cases where guests have felt hard done by. In one case, there were even accusations of digital spying on a guest by the owners of the house. These are all consequences of letting a stranger stay in your home – or choosing the home of a stranger over a hotel room. And, as usual with the gig economy, there is little precedent for how to deal with them. What happens if you rent your spare room and the guest steals all the towels? What if they’re rude to your family? What if they don’t lock up when they leave and you’re burgled as a result? Although there are clear advantages to being able to make money from a space you own, there could be costly consequences too. As the only real deterrent is a bad rating on AirBnB, there isn’t a huge degree of protection.
But, even if you get the occasional bad apple, isn’t AirBnB still a great way to make extra money? It can be, depending on the effort that you’re putting in. Some AirBnBers, for example treat their offering like a hotel. Visitors arrive to find fresh flowers, robes, tea, coffee and biscuits. However, these AirBnBers also tend to charge more for the rooms, defeating the point of AirBnB as a cheaper option to a hotel. Lower costs still remain the primary motivation for people to use AirBnB but as the site has become more popular, prices have gone up. As people start to pay more they demand more for their money and that can make running an AirBnB more hassle than it’s worth. If, on the other hand, you are providing basic accommodation that you don’t have to do much with and for which you’re charging only a little, it can still be a great little earner.
Perhaps one of the most significant factors in terms of whether AirBnB is worth the hassle is whether you like hosting. Although it’s possible to refuse guests who want to stay, it’s difficult to pick and choose to a great extent and still make money. You may have lots of lovely guests who are friendly, tidy and respectful and then a few who are a nightmare. If you’re open to the challenge of making almost anyone feel welcome then AirBnB will most likely never feel like a hassle. If you’re really only looking to welcome a certain type of person into your home then you’re highly likely to find it a difficult experience at least 50% of the time. Even if you’re earning the extra cash for that extension, money for holidays or income for a new wardrobe, is it worth it if you’re on edge and uneasy at home.
It’s worth recounting a personal tale. As yet I’ve never used Airbnb – either as a host or guest. But recently I’ve been planning a trip to New York. As you probably know New York is now one of the most expensive places to stay on the planet. Using services like Booking.com quickly confirmed this with a decent hotel room costing around £250 per night. So may be it was time to try AirBnb. Scanning their website showed numerous options so I focused on those that were up to the standard of a hotel (no point compromising). First it struck me that I was unlikely to save any money even though there might be a little more space. Then having chosen one particular apartment I discovered that the owner had a record of cancelling bookings at short notice! What if that happened to me? I’d have booked airline tickets and would be forced to find a hotel at short notice – and no doubt at penal rates. This eventuality was clearly something you can’t insure for. The risk was too big and that one experience has made me dubious about the principle of AirBnb, especially when travelling long distances at great expense.
Now that the AirBnB honeymoon is over it’s becoming obvious that it isn’t for everyone. There is cash to be made if you’re willing to be flexible, open and accommodate everyone but if not then you may find that it’s simply not worth the hassle. And it may not suit you as a guest either.
Alex Hartley is a keen advocate of improving personal finance skills. She's worked at Solution Loans since 2014 and written hundreds of articles about how people can manage their money better. Her interest in personal finance goes way back to...Read about Alex Hartley
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