A report by the property company JLL claims that landlords in London can earn £115 more a week using Airbnb than from a standard rental contract.
According to a March 2016 article from The Independent, the average London rent for tenants is £335 a week, but the same properties listen on Airbnb could earn £450 – an increase of £115.
Airbnb started in San Francisco in 2008 as a way for home owners to earn extra money by renting out rooms on a short-term basis. There are now more than 25,000 London rooms listed on the site.
Though landlords can earn around a third more rent through Airbnb, Nick Whitten of JLL warned that using property for Airbnb tenants for over 90 days could be seen by the authorities as a change of use from a residential property to a hotel. He recommended that landlords restrict Airbnb to times when the property is empty between tenancies.
Landlords investing in the buy-to-let property market using commercial mortgages need to make sure that listing properties on Airbnb will not be in violation of the mortgage terms. Airbnb offers Host Guarantee insurance, but landlords also need to make sure that their existing property insurance covers liability for Airbnb use.
An alternate to Airbnb is holiday letting. Ideally, there needs to be a year-round demand for short-term rentals in the property’s location.
Whilst short-term rentals can be profitable for landlords, there are both pros and cons to be considered before listing on Airbnb.