Thursday, January 21, 2016

Airbnb… Friend or Foe?

Airbnb... Friend or Foe?

If you have recently booked yourself a holiday home, there's a strong chance that you used an online booking website such as Airbnb or Stayz.

These online systems are game-changers. They allow you to book your holiday accommodation directly and live like a local, all at a fraction of the cost of a hotel stay.

As a property owner you can now rent out your home to short-term guests with the potential to double the returns available, compared to traditional long-term rental clients.

However with over 50 million users, people around the globe are now experiencing what it is like when the shoe is on the other foot... rather than visiting holiday destinations themselves, they have visitors next door. Disturbances such as late night parties and new guests frequently coming and going, are starting to cause angst in many neighbourhoods across the world.

This type of 'industry disruption' (such as Uber) is happening across all industries and often the law can take time to catch up. According to a report by New York's Attorney General, a staggering 72 percent of Airbnb bookings between 2010 and June 2014 in New York City appear to have violated the permanent residential laws.

But things are starting to change...

Mid last year, a New York City Civil Court judge handed down the first known decision awarding an eviction based on a tenant's illegal renting 
via Airbnb.

So with the growing interest in these websites, what do you need to know?

You are entering the space of 'short term' rentals and you may be breaching various regulations without even knowing.

If you decide to rent out your property for less than three months, you may be contravening local laws (such as strata by-laws or zoning stipulations) and you could face hefty fines. Tenants must also seek written consent from their landlord should they wish to sublet their property otherwise they'll be in breach of the obligations under their lease.

In saying that, there are huge benefits to these websites, and we expect to see holiday rentals evolve noticeably over the next 12-24 months as more and more property owners consider this option.

Should that be you, before making those few clicks, we suggest to:

- check with your insurer that you are covered for short term rentals

- look into the local laws relating to the planning use in your area

- ensure items such as your smoke alarms, appliances, gas connections and pool are certified and meet compliance standards.

As we head into 2016 and beyond, we see that non-traditional providers will continue to enter a range of markets, providing lower cost options to consumers. It truly is an exciting time but be sure to do your homework and make Airbnb your friend... not foe.

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