Tuesday, September 29, 2015

Why There Should Be No Airbnbs in Condos

Traveling to new cities is great for expanding one's horizons and it should be done with much research.

Not only for the city that is being visited, but also for the laws of the land that you are bound to tread on.

But did you know hosts are renting your properties extra space in their unit for as much as $300 per night in untaxed dollars and running a "non-licensed bed-and-breakfast" with Airbnb could lead to big fines in the ballpark of at least $10,000.

Airbnb has been a great resource for tourists who can't afford the price of expensive hotels in their destination city, but is not the perfect solution it may be touted up to be.

In All Fairness: Airbnb Is Bad For The Boston Real Estate Market

The model for Airbnb is suitable for people who can neither find rental space, nor be approved for their own apartment due to a subprime credit rating in a tight rental market like Boston.

But this negatively impacts the local real estate market, Boston property managers and owners because it is still a fairly new unregulated industry that is void of taxation.

This article is in support of the effort to minimize Airbnb hosts and their short-term tenancy advantages on your property.

It not only affects the local lodging business, but it also has added to the bottle-necked market where renters can't find affordable housing in Boston. The windfall comes from the following reasons explained to understand the concept of  Airbnb.

Un-Licensed to Chill: Short-Term Rentals Are Detrimental To Your Property

The short-term home Boston rentals industry is catering to the "sharing economy," where renters and homeowners alike make money renting out their homes, cars, and personal time.

Online rental websites where people bid for beds in rental units by using software such as Airbnb, Homeaway and it's subsidiary VRBO, and Uber has made home-sharing into a billion-dollar industry.

According to Forbes, Airbnb is valued at $25 billion. Since it's emergence in the tech industry haven in the Bay Area, Airbnb has made its presence stretch into 194 countries.

As a new industry looking for altering it's model upon state and federal legislation, what makes sharing an extra space so bad for the local real estate economy?

Hosts that are renting on your property are posting their extra space in their rental unit for as much as $300 per night in untaxed dollars they are keeping for themselves.

Airbnb is making condo owners into their own real estate agents, without the condo association getting a cut of that short-term rental revenue. This affects the property management company because this leaves the condo association out of pocket from paying for the contract renewals to the service via condo fees.

Issues Resulting From Using Airbnb:

  • Security is a major concern where owners are seeing an increase in people they do not know access their home with travelers who are typically in a vacation mode which could lead to rowdy activity and inviting even more strangers back for parties. Building keys could also be copied by an airbnb guest leaving unauthorized access
  • Landlords and investors seeking more profits by changing traditional housing into short-term units, reducing the housing supply. 
  • Airbnb homeowners and renters are at risk for being hosts because the city can fine them for running a non-licensed bed-and-breakfast. This could lead to big fines in the ballpark of at least $10,000.
  • Those who come for short stays are taking the risk of neglecting their property value from frequent guests who don't respect the property because they are not signed to the lease. Read more property damage control tips
  • The amount of foot traffic that neighbors must deal with from the frequent exchange of new guests on the premises moving in an out of the building. Also how is maintenance and emergency support resolved with short term rentals?
  • Increased janitorial costs where guests have no vested interest in taking care of hallways, railings, doorways, roof decks, etc. 

Neighborhood Watch: Avoid Clustering in Your Property

The condo craze in Boston has steadily risen since the start of this decade.

The shortage of home supply, influx of transient college kids, and tourists has made the caused the local groundswell of over 300 Airbnb hosts to register on their site.

For someone like an empty-nester or a tenant who does not have kids, marketing their extra room to some international guests going to explore America for the first time makes for good business. This home-sharing model helps the owner or renter pay their bills and profit.

On the flip side,  clustering of random people could lead to true nightmares for owners who don't have a registered "neighborhood-use permit." You can see the consequences in this video here of this San Diego woman who learned her lesson from using Airbnb.


Final Thoughts

Airbnbs in condos may seem generous from the owners, but they are a violation to the condo association and the city of Boston if they are not registered properly.

Have you had any bad experiences dealing with neighbors who are Airbnb hosts with multiple guests every month? Or are you a homeowner in support of home-sharing?

Tell us your thoughts in the comments why Airbnb is good or bad for the community.