When you think of Airbnb, you probably picture a short-term vacation rental in a prime spot for tourists. However, Airbnb plans to expand by offering long-term rentals so tenants can stay in one spot for up to a year. But how will this impact the market? In the video below, we review Airbnb’s future plans, how they may impact the market, and some pros and cons.
Contents of This Article:
- Is Airbnb Shifting into Long-Term Rentals?
- How Will It Impact the Rental Market?
- Pros and Cons of Airbnb’s Long-Term Rentals
- Why Professional Property Management Is Crucial
- Need Help Managing Your Rentals?
Is Airbnb Shifting into Long-Term Rentals?
Airbnb is mainly known for its short-term rental properties, which are popular amongst travelers or vacationers. While many people book a short stay, ranging from a few days to a few weeks, Airbnb’s chief executive, Brian Chesky, wants to focus on long-term rentals. That means tenants can book an Airbnb for an extended period of time, up to a year.
Chesky tells the Financial Times, “In this post-pandemic world, there’s this unrecognized market of a month, two months, three months, because people can work from laptops, people are going away for the summer.”
Airbnb already offers monthly rentals, but Chesky says only 18% of nights booked in the second quarter of 2023 were for stays longer than 30 days. As such, he believes that the company can do more to attract interest in long-term bookings.
Along with expanding and focusing on long-term rentals, chief executive Chesky also wants to expand its experience selection, offering more “things to do on your trip.” However, today, we’ll focus on Airbnb offering long-term rentals and how it’ll impact the rental market.
How Will It Impact the Rental Market?
Inevitably, the transition from short-term Airbnb rentals to long-term rentals can impact the overall market. For one, it will increase the competition between Airbnb owners and traditional rental property owners. This means that some established long-term rental owners may need to lower their rates, and they may experience higher vacancy rates.
Additionally, it may reduce opportunities for potential homebuyers looking for homes on the market. As Airbnb opens its platform to long-term rentals, it may encourage more property owners to list their homes, reducing the availability of housing for permanent residents.
Pros and Cons of Airbnb’s Long-Term Rentals
Like any rental strategy, there are some pros and cons of Airbnb extending to long-term rentals. Here are some of the main points to consider.
Benefits of Long-Term Airbnb Rentals
- Provides Flexible Housing- With Airbnb expanding into long-term rentals, it gives travelers a chance to live elsewhere for a more extended period. If they want to visit a certain city or state for six months, they can do so without moving all of their belongings. After all, most Airbnbs are fully furnished with several amenities ready to go for tenants.
- Consistent Income for Owners- Airbnb owners who offer long-term rentals can benefit from a more consistent income. If they’re not used to having their property occupied at all times, a long-term strategy can ensure fewer vacancies.
Disadvantages of Long-Term Airbnb Rentals
- Fewer Rental Homes on the Market- As Airbnb expands into the long-term rental market, it may put other rental owners at risk of vacancies. There will be increased competition, which may cause some already established landlords to make sacrifices, like lowering rates or providing more amenities.
- Lack of Proper Management- Airbnb is generally used for short-term rentals, meaning maintenance and management are often simpler than long-term stays. If you plan on offering a long-term rental property, it’s important to consider how you’ll find qualified tenants and continuously manage the property.
- Less Opportunity for Profit Maximization- Airbnb owners can set different rates for different days throughout the week or month. For instance, they may set higher rates for weekends or for holidays. However, if expanding to a long-term rental, they’ll have to set a regular monthly rate for tenants to pay.
Why Professional Property Management Is Crucial
Professional property management is crucial for any long-term rental. That said, Airbnb is generally used for short-term rentals, meaning owners could regularly check on the property and clean between each guest. However, since it’s meant for shorter stays, there aren’t necessarily the same management processes as traditional long-term rental properties.
Owners looking to make their Airbnb properties long-term rentals must carefully consider hiring experienced Baltimore property managers. For instance, finding qualified tenants to stay in your properties is important, which requires a thorough tenant screening process. Most short-term rental owners don’t spend much time vetting their guests, as they’ll usually only be there for a few days. However, if you’re allowing someone to rent your space for up to a year, you’ll want to ensure they’re responsible and trustworthy–especially if your property is fully furnished.
Additionally, you’ll want to consider taking care of emergency maintenance or repairs that may pop up. If you don’t live near your Airbnb, you’ll need to hire someone to promptly take care of tenant concerns.
Need Help Managing Your Rentals?
No matter what type of rental properties you own, it’s important to think about how you’ll manage them. For instance, if you own just one or two properties, it may be feasible to do the work yourself. However, if you own several rental properties, managing them all can quickly add up to too much work for just one person.
Luckily, Bay Property Management Group is here to help. We offer comprehensive rental management services for rentals in and around Baltimore, Philadelphia, Northern Virginia, and Washington, DC. So, whether you need help listing properties, screening tenants, performing maintenance, or collecting payments, we’ve got it covered!
