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Should Landlords Allow Tenants to AirBnb Their Properties?

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Most property management companies in Baltimore do everything they can to find good tenants and protect their rental properties. That said, becoming a landlord undeniably poses both risks and benefits. One landlord-tenant scenario that has pros and cons is subletting for Airbnb. 

Sometimes, tenants go out of town or need to end a lease early, which creates the opportunity for subletting. There are a few different options, but one of the most common is subletting for Airbnb. Let’s go over some of the pros and cons of allowing tenants to Airbnb rental properties.  

What is Subletting for Airbnb?

Subletting a rental property is typically when a third party subleases the unit from the original tenant. There are two different types of subleasing – short-term and permanent. 

Commonly, tenants use short-term subleasing if they are going to be gone for a temporary period of time. For example, if a tenant is going on vacation or traveling out of state for work, they may want to sublease their rental during that time. Usually, a short-term sublet lasts anywhere from 30 days to a few months.

On the other hand, permanent subleasing occurs when a tenant doesn’t plan on coming back to the rental, so they find another tenant to take up occupancy. 

When it comes to subletting for AirBnb, tenants become the “landlord” figures to the Airbnb guests. Since guest stays at a rental unit are typically short-term, tenants are responsible for ensuring it’s okay with the landlord. 

That said, it’s crucial to keep in mind that any time a tenant subleases a rental, they must contact their landlord beforehand. Additionally, there are usually rules within the rental contract that states whether subleasing is allowed or not. 

Why Would Tenants Want to Sublet a Rental?

There are many reasons tenants would want to end a lease early or sublet a rental property. Commonly, it’s because they are moving to a different city for school, work, or other life changes. Other times, roommates are not getting along, or another preferable living situation pops up. 

Instead of opting to pay the often expensive lease break fees or face consequences for breaking a lease, some tenants view subletting as a better alternative. No matter the reason, landlords are left with a difficult situation. So next, let’s go over some of the pros and cons of allowing tenants to sublet properties and use them for AirBnbs. 

Should Landlords Allow Tenants to Airbnb Properties?

Allowing tenants to AirBnb a rental property isn’t always a wrong decision for landlords. In fact, it can pose many benefits for rental units that are vacant or hard to rent. However, it can be a nightmare for landlords if tenants sublease unlawfully or untruthfully. 

Stick with us while we go over some of the pros and cons of allowing tenants to AirBnb their rental properties.

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Pros of Subletting for Airbnb

  • Tenants are responsible for finding guests- When you allow tenants to use your rental for Airbnb, they are accountable for finding guests to occupy it. Additionally, tenants are the ones who must provide a clean, welcoming experience for guests. 
  • No vacancies or turnovers- If you have tenants subletting your rental when they can’t be there, you are still earning income each month. On the other hand, when a tenant leaves your rental without a sublease, you’re missing out on revenue. 
  • You could work out a payment policy with tenants- The tenants who Airbnb your rental property will presumably be earning profits from it. In this case, you may be able to work out a payment policy with tenants that makes you partial income as well. 

Cons of Subletting for Airbnb

  • No tenant screening process- When you let tenants handle finding guests to occupy your rental home, you likely don’t know about every guest coming in and out. This can result in property damages, criminal activity in your rental, and other concerns. 
  • Liability concerns- If an Airbnb guest gets injured or causes disturbances in the neighborhood, you may be liable for their actions. 
  • Landlords miss out on profits- Airbnb rentals make quite a bit of money, and if you don’t set up an agreement with your tenant, you could lose out on profits. 
  • Potential damages- Damage within your rental property may happen if you let tenants choose Airbnb guests. In the end, this may require landlords to make repairs or home improvements more often.  

Before allowing a tenant to Airbnb your property, look at all the pros and cons to determine whether it’s a good idea for you. Next, let’s go over some tips for landlords while allowing tenants to sublet their properties. 

Tips for Landlords While Subletting Properties

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If you do allow tenants to sublet your rental property, even if it’s just for a short time, you need to have vital parameters in place that best protect your rental. That said, you should include strict rules in the lease for your tenants to follow while subletting for Airbnb. Let’s go over some other tips for landlords to consider while deciding whether or not you should sublet your property. 

Create a Strong Lease Agreement

Whether you want to allow tenants to sublease your property or not, you must include clear rules and guidelines within your lease. If you don’t want tenants to sublet, make it clear within your lease rules. That said, if someone violates the lease agreement, take immediate action to lessen the chance of landlord liability. 

On the other hand, set guidelines for tenants to follow if you allow subletting in your rental property. Some rules you may want to put in place include: 

  • Require landlord consent 
  • Payment system requirements
  • Encourage renters insurance
  • Keep communication consistent

Keep Local Laws and Regulations in Mind

Some cities have specific Airbnb laws that hosts and homeowners must follow. For example, landlords and tenants must follow local rules like: 

  • Zoning rules– Many cities have specific laws that regulate how you can use your home. Before letting a tenant sublet your property as an Airbnb, check out these rules and see if your property qualifies. 
  • Required permits- Some local counties may require permits for renting out a property, whether it’s an Airbnb or standard rental property.  
  • Building standards and regulations– Many jurisdictions have rules and regulations that determine buildings’ construction, maintenance, and design standards. Most commonly, these rules and regulations touch on habitability, safety, and health. 
  • Taxes and business licenses– Some local laws require Airbnb hosts to pay taxes for each stay and pay tax to that city or jurisdiction. 

Work Out a Payment System

If you want to allow tenants to sublet your rental property if they’re unable to stay there for any reason, you may want to work out a shared-payment system. After all, you wouldn’t want tenants to use your property to make a profit only for themselves. Due to this, it may be wise to develop a fair payment plan with tenants who are subletting for Airbnb. 

Hire a Property Management Team

Hiring a property management company in Baltimore can help you protect your rental at all times. For example, whether or not you want tenants to sublease your property, a property management team can help you ensure compliance. Similarly, management can perform thorough tenant screening, to protect your property against a tenant with poor rental history. 

How Property Management Can Help Protect Your Rental

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Allowing tenants to sublease your rental property has some pros, but it’s still a significant decision for landlords to make. Subletting for Airbnb rentals can increase your profits, but it can also pose liability and compliance risks for landlords. That said, Bay Property Management Group can help protect your rental by providing the following management services:

  • Tenant screening
  • Move-in and move out reports
  • Rent collection
  • Maintenance services
  • Rental registration
  • And more

If you are looking to further protect your rental property with management services in Baltimore, Philadelphia, Northern Virginia, Washington DC, or the surrounding counties contact Bay Property Management Group today.