5 Reasons To Avoid Using Airbnb Management
by Sumona Business Development 04 November 2022
What is Airbnb Management?
The world’s most popular platform for everything from city breaks to staying in caves and log cabins has grown so large that other companies have jumped on the bandwagon to offer their services as an extension of the platform itself.
At Flex Living, we’ve had years of experience using the Airbnb platform to provide Airbnb management services to landlords.
We know that many companies using the model have issues with managing properties effectively and we aren’t offering any criticism of Airbnb as a platform, but are very much aware of the reality on the ground of running an Airbnb property and the difficulties many landlords face.
For landlords who are trying to maximize their rental income each month, it’s relatively easy to be enticed by promises of guaranteed rent, hands-off property management, and other benefits of the “service” some management companies offer.
This is exactly why it’s important to discuss the 5 most common problems for landlords using Airbnb management services and why you should avoid using the platform because of them.
How Does Airbnb Management Work?
Airbnb is incredibly popular worldwide, especially in cities like London, taking up a massive share of accommodation options throughout the year. Whereas traditionally, stays on Airbnb last for a few days or up to a week, as most visits are for travel and leisure.
With usual Airbnb rentals, a landlord will become a “host” on Airbnb for guests to stay at their property and deal with the booking however they see fit, including taking on responsibility for cleaning the property, taking care of linen, and if they choose to, welcoming their guests.
When a landlord opts to use a management company for this type of stay, the management company deals with the booking and handles the guest’s arrival and stay.
Airbnb management companies will charge an increased premium for each stay at the property and pay the landlord a fixed amount of money each month, whilst the company pockets the difference. This is great for landlords as it offers them guaranteed rent opportunities, whilst not having to worry about how much their property is occupied throughout the year.
Top 5 Reasons To Avoid Using Airbnb Management
Unfortunately, there are some serious drawbacks to this model, despite the security that many management companies will say the model offers to landlords.
From significant problems with maintenance, disruptive guests, and non-existent property management – let’s look at the 5 biggest reasons you should avoid using Airbnb management companies.
1. Increased Wear & Tear At Properties
Issues with wear and tear become a major problem for landlords using Airbnb. Once a management company has taken over the property and tries to book it out with as many nightly stays as they can, the constant stream of guests will inevitably, take its toll. From damage to appliances to overuse of facilities, with so many people staying at a property constantly, things will break!
This will, of course, hurt your property’s value and, the amount of profit you end up making from letting out the property overall. Anything which breaks will need to be replaced and as the owner, you’ll be expected to do this, often instantly by your property manager. Expect to receive a lot of calls to replace things at your property whilst using Airbnb management!
The other issue with wear and tear at Airbnb properties is that if something has been damaged by a guest during their stay and they should be the ones to pay for it, you’ll often find your Airbnb management company directing you to the disputes team on Airbnb to handle the issue.
This is quite a headache for landlords as sometimes disputes can drag out over months. Airbnb is notoriously meticulous when dealing with fallouts between guests and hosts and settling issues over damages.
2. Lack Of Property Maintenance
When an Airbnb management company says that they will deal with whatever maintenance issues arise at the property they will always, ask landlords to foot the bill and in some cases, landlords can end up paying even more money to fix issues at their property if the management company is dealing with maintenance.
This is because management companies have a tendency to call in expensive contractors without consulting the landlord first! This can turn a lot of minor property maintenance into expensive episodes for landlords.
As far as the management company is concerned, the issues need to be fixed as quickly as possible less they have to cancel any bookings at the property. Never mind how much it costs if the landlord is paying!
Furthermore, Airbnb management companies will not always deal with maintenance issues on their own, often ringing landlords to sort out issues at their property. This creates much more hassle and stress for landlords having to deal with both the repair to the property and the company managing it asking for updates and trying to arrange access for contractors to get the work done.
3. Easily Open To Crisis
It doesn’t take a global catastrophe to throw a spanner in the works at an Airbnb property but, when events like this do happen they can cause all kinds of issues for companies that manage a lot of Airbnb properties.
The reliance on continuously booking out properties is how many management companies manage to pay their landlords each month. If anything happens to disrupt this then management companies can be in a lot of trouble very quickly.
During the Covid-19 pandemic, many management companies went bust around the world, as they weren’t able to pay their landlords each month. Whilst events on the scale of the pandemic are quite rare, the issues needed to cause a crisis of this kind for an Airbnb management company do not need to be this big to cause it to fail.
Property owners should be very careful when choosing which companies they choose to partner up with for Airbnb management.
The state of the UK economy is looking increasingly shaky with each passing week and any more volatility in the housing market or continued rise in the cost of living could cause more management companies to collapse under the weight of running costs or, trying to hold on to their landlords who might be inclined to sell their properties.
Many management companies continue to ignore the 90-day rule for Airbnb rentals in London, to offer a service that lets an Airbnb property out for far longer.
This will ultimately, be undone when new legislation comes into force in a few years’ time, meaning there is definitely a shelf-life on Airbnb management companies in their current form and all the more reason for landlords to stop using their services going forward.
4. Issues With Guests
As we mentioned earlier, the reality of having a property booked out through Airbnb management does result in a constant stream of strangers staying at the property.
Who these people are, where they might be coming from, and what they get up to during their stay, are all complete unknowns that can have consequences during their stay for property owners.
Airbnb property management companies lack any ability (or inclination) to properly vet guests before their arrival. The Airbnb platform is a raft of profiles with some noticeably less detailed and engaging than others.
There is no way to know what a person’s true intentions are during their stay, and despite a crackdown from Airbnb on parties, there is still the potential for things to go on at a property the landlord has no idea about!
Noise complaints are incredibly common with Airbnb properties. When you factor in that disturbances of any kind to neighbors of your property, are more likely to be reported directly to you to deal with, rather than the people who are meant to be managing the property it does question – what the point is in using a management company in the first place?
You don’t want to fall out with other residents, as doing so is a surefire way to lose more of your rental income each month in fines or, potentially see you stopped from letting your property entirely if it’s reported enough times to your building’s owner.
5. High Fees
It’s worth noting that when you choose to let a property through an Airbnb management company, you have two sets of fees you instantly have to pay. One to the company that is managing the property for you and the other to Airbnb themselves.
Together, most landlords using Airbnb management can expect to pay 30% of the total property income in fees each month, which is a lot of money to lose off your rent!
Most Airbnb management companies will sell their services to a property owner under the pretence that they are offering “better rent” or, guaranteed rent for whatever agreements the landlords sign. However, the hidden costs behind signing up for these agreements go far beyond paying 30% in management fees.
With traditional letting, your tenants would be covering the cost of utilities, council tax, and cleaning the property themselves. With Airbnb management, these costs are all yours and they will affect how much rent you’ll receive each month.
Remember, the company managing the property will be charging a higher nightly price than a traditional let. But, none of the profit from this applies to you as you’ll only be paid the fixed amount you agreed to.
Airbnb management companies will try to entice property owners with long contracts for up to several years with reduced management fees, to distract landlords from the reality, that due to high running costs, properties let through Airbnb management are far less profitable than the agents will have you believe!
Are There Better Solutions To Airbnb Management?
Property owners have other options for exploring better renting opportunities than just resorting to using expensive and ineffective management companies letting their property through Airbnb.
Corporate letting is one such solution for property owners who want to get the most out of their rental property but do not face the same level of stress and hassle as might come from Airbnb management.
Corporate letting involves a letting agreement between a property owner and a business, which sees the business take on the role of managing the property for one of their employees, who acts as the tenant at the property. As the employee usually, receive their accommodation for free from their employer, they’re more inclined to look after the property than a guest on Airbnb might.
Aside from having a responsible and diligent tenant, corporate letting also offers landlords fewer management headaches for their property, only usually seeing the company they let contact them when it comes to dealing with major maintenance issues or emergencies (which there are much fewer of than Airbnb rentals!).
Agreements can offer guaranteed rent to landlords, with very little chance of voids, as well as rolling agreements if the company letting the property decides to keep the arrangement going!
Corporate letting is becoming increasingly popular in a city like London but Flex Living offers an excellent fee-free service for landlords offering guaranteed rent and fantastic 24/7 property management in
London, If you’re interested to learn more about our model for corporate letting as well as what other alternatives we offer to both Airbnb management and traditional letting, visit our website and see if we can find a better letting arrangement for you!
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