The Risks and Rewards of Renting Out Your Apartment on Airbnb
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The hotel industry is running scared. The reason? Airbnb, the company that allows homeowners to rent out their spare rooms and couches to travelers. The homeowners make money and travelers get a bed for the night, often at a lower cost than what a traditional hotel would charge.

Are you thinking about renting your spare rooms out on Airbnb? Here’s why you should, and also a cautionary note on why you should think twice.

The Risks of Renting Out on Airbnb

The Airbnb model is great for travelers, but what about for hosts? Here are three major considerations you need to take into account when you rent your space out on Airbnb.

1. You Might Get Evicted

If you own your home, this doesn’t apply to you. But if you rent? Pay attention. Subletting your place on Airbnb might get you evicted.

Remarkably, it happened to Airbnb’s poster child, Shell.

Much like Madonna was the face of Pepsi in the 80s, Shell was the face of Airbnb in New York. Her face had been plastered across subway adverts for the company, and she had appeared in video commercials, talking about her experiences with providing free accommodation for those displaced by Hurricane Sandy.

Shell’s apartment was a beautiful and spacious 1880s Dutch barn, located in hip and happening Stuyvesant, just on the outskirts of New York City. Her rent was $4,000 a month. And like many rentals, Shell’s lease expressly forbade her from subletting her apartment.

When her landlord caught wind of what she was up to, he was furious. “Friends are one thing,” he said. “Groups of social-networking strangers is a completely different ball of wax.”

Not long after, he gave her the boot. Shell had to find a new flat, and her loyal customers had to find somewhere else to stay when they were in town.

In another similar story, 72-year-old artist Eileen Hickey was evicted from her home in 2018 after hosting on Airbnb in a bid to pay her husband’s medical costs. Money reported that she was hit with a $185,000 fine; it was one of the highest penalties the city had ever seen.

2. You Might Break the Law

In some locales, Airbnb—much like Uber—operates in a sort of legal grey zone.

For example, according to the law, most apartment owners in New York cannot rent out their properties for less than 30 days unless they are living in the apartment at the same time. The law theoretically helps to ease the city’s already-acute housing problem; services like Airbnb have made short-term rentals more profitable for landlords than long-term leases.

And New York is far from being the only example. Other major global cities such as San Francisco, New Orleans, Barcelona, and Vancouver have all implemented similar measures.

In its official guidance for hosts, Airbnb outlines some commons laws and regulations that you could run afoul of in your city. They include business permits, housing standards, zoning rules, taxes, and housing association rules. Rules change between cities and countries; consult with your local authority if you need more information.

You could also land yourself in hot water if you rent out an Airbnb property while paying a mortgage on the same unit. Depending on your provider and location, you might be expressly forbidden from sub-letting your flat or house.

Finally, you need to consider your insurance provider. You might not be covered for lettings. As we’ll see shortly, despite recent initiatives, Airbnb doesn’t provide liability insurance for hosts, so you need to make sure you’re adequately covered for personal injury, negligence, and property damage claims made against you by members of the public using your property.

3. Someone Might Trash Your Apartment

When you rent out your apartment or spare room to a near-stranger, you’re making some very big assumptions. You’re assuming that the person you’ve entrusted your house will treat it with respect and that none of your belongings will be stolen.

And for the most part, that’s usually the case. There have only been a few notable exceptions of people having their homes turned upside-down. But when things do go bad, they go really bad, as San Franciscan Airbnb host Emily J found out back in 2011:

“Someone named Dj Pattrson (was it a guy? A girl? I still don’t know—but I have noticed much too late that the person misspelled their own last name) came into my home earlier this month (apparently with several others, according to witnesses) and set out on what I believe to be the carefully-planned theft and destruction of my home and my identity. With an entire week living in my apartment, Dj and friends had more than enough time to search through literally everything inside, to rifle through every document, every photo, every drawer, every storage container and every piece of clothing I own, essentially turning my world inside out, and leaving a disgusting mess behind.”

The immediate response of Airbnb left a lot to be desired. In a later blog post, Emily slammed the lack of support provided by Airbnb, and talked about how her life hadn’t gone back to normal.

“In the meantime, I am still displaced, bouncing between friends’ homes, clutching my pillow and what’s left of my normalcy. I spend my mornings recalling nightmares and breathing through panic attacks, and my afternoons scouring the city’s pawn shops in the vain hope that I might recover some of my stolen treasures. I do not feel anything close to safe.”

To the credit of Airbnb, in the years since this high-profile incident, they have released their Host Guarantee, which promises to protect all hosts from damage and theft to the tune of $1,000,000.

However, the guarantee does exclude some notable items—including cash and jewelry. And even you’re fully recompensated, you are still facing all the hassle of working through the process and restoring your property.

The Rewards of Renting Out on Airbnb

Despite the horror stories, there remain some compelling reasons why you might want to rent out your space to near-strangers on Airbnb.

1. Money, Money, Money

For many, Airbnb is their main source of income, with some charging upwards of $100 a night to rent out their spare room that would otherwise lie dormant. Entire homes can go for much, much more.

And if you have a bit of capital behind you, you can acquire enough properties to build a six-figure Airbnb business, as Bradley, the subject of this FastCompany article does.

“At 90 percent occupancy, Bradley can make about $4,000 per apartment on Airbnb. He pays about $2,000 of that in rent and utilities. That comes out to about $2,000 profit per apartment per month, or $24,000 each year. With six apartments, he could make up to $144,000 in a year.”

That’s more than the average wage of a software developer in Silicon Valley. And if you’re still not planning on living entirely off your Airbnb rental, you can still offset your bills, your rent, and your mortgage.

2. You Meet New People and Expand Your Horizons

This is something that rings true for both guests and hosts.

This summer, I spent three nights at an Airbnb booking in Brussels, Belgium. The room was far cheaper than most hotels in the city and I got to stay near the splendidly modern skyscraper headquarters of the European Commission.

My host for the weekend was a Japanese translator, working in the city. And mine wasn’t the only room that the host had rented out. Next door was a Spanish couple off to attend a rock concert in the nearby city of Leuven.

After leaving Brussels, I hopped on a train to Antwerp, where I stayed with a Belgian-Nepalese couple. Like my previous booking, other rooms in the property were booked. I met a Kyrgyz UN worker visiting friends in the city, as well as two film students from Los Angeles who had taken two months off for a European trip. It makes perfect sense for digital nomads too.

It’s highly unlikely I would have met these interesting people, had it not been for my choice of accommodation. And when you open up your home to strangers, you get a chance to meet people you otherwise wouldn’t have met.

Share Your Airbnb Hosting Experience

Are you an Airbnb host? Have you had any bad experiences? Good experiences? Make sure you share your Airbnb stories in the comments below.

If you would like to learn more, check out our comparison of Airbnb, VRBO, Homeaway, and hotels Airbnb vs. VRBO vs. Homeaway vs. Hotel: Which Is Better for You? Airbnb vs. VRBO vs. Homeaway vs. Hotel: Which Is Better for You? Sites like Airbnb, Homeaway, and VRBO let homeowners rent their spaces to travelers. But which one is right for you? Read More . And make sure you also check out our list of incredible Airbnbs that were used in films and TV shows 9 Stunning Airbnb Rentals That Were Used in Movies and TV Shows 9 Stunning Airbnb Rentals That Were Used in Movies and TV Shows Want to stay overnight at a location that was used in a movie or TV show? Check out these incredible Airbnb rentals! Read More .

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  1. dragonmouth
    April 12, 2019 at 6:10 pm

    What does an AirBnB owner do when a renter injures him/herself on the premises and sues the owner? If the owner has a regular home owner's or apartment renter's insurance, there is a very good chance that (s)he will be on the hook for the entire amount of any judgement. (Ooops, there goes all that lovely profit, and then some) If the premises are being used to make money, most, if not all, insurance companies in the US require a business-type policy and will not pay for any claims against regular homeowner or renters policies.

  2. Karin
    December 10, 2016 at 1:46 am

    I own and live in a single-family home. I am in Pennsylvania. I had my Airbnb up and rented just 1 room..well I won't say "rented a room" because guests had access to the entire house and could use the kitchen. I've been doing Airbnb since January 2015 and never had an issue, then out of the blue a neighbor reports me, I had no idea why. There was nothing in the code books on home-sharing or short-term rentals. Code enforcement refused to tell me. They told me to apply for a variance, which I did, and got denied. I was told to wait for a letter so I could either appeal or stop operations, but the zoning board I could keep operating until I got the letter. I never received the letter and then I get a court summons, which said I failed to abide by the zoning hearing board's decision to stop the Airbnb rental. i'm speaking with an attorney to fight it. this is ridiculous. I had every intention of following the rules and would appeal but I never received the letter, and I was told to wait for it before I do anything. I am heartbroken. I enjoyed Airbnb very much and had all good experiences. I felt like I got fired from a job I loved.

  3. Chantal
    December 23, 2015 at 3:41 pm

    I personally have a rental apartment in Amsterdam on https://www.perfecthousing.com/rental-apartments/amsterdam . Of course the rules are a bit different for the Netherlands and Perfect Housing instead of AirBnB, but the principles are the same. I would advise everyone in doubt to rent out their apartment... provided that they are careful. Always look up the rules regarding renting your property, and try to evaluate the guests that want to stay at your apartment first. Considering you are careful, renting out your apartment can be a wonderful experience! I love the people I meet, and the money can't hurt too of course ;)

    Thanks for sharing Matt!

  4. Anonymous
    September 16, 2015 at 7:37 pm

    90% occupancy.... come on.

  5. dejan
    May 11, 2015 at 8:15 pm

    Sorry,
    Like I have promised.. This is airbnb resolution on the case dispute and it is fair enough for me, Only the feedback from ................ was not so good, but that is her problem.

    ................ , Oct 28 15:17:
    Hello Dejan,
    We understand that you're not in agreement regarding the security deposit request from your reservation with ................ . As we strive to resolve these issues in a positive way for both parties, we're no longer requesting payment and have closed this case.
    We hope that you move on to have many more positive experiences using Airbnb. Please don’t hesitate to contact our 24/7 Customer Service Team if you have any questions or concerns in the future: http://www.airbnb.com/contact_us
    Best Regards,
    ................

    P.S. I only hide the names.
    Dejan

  6. dejan
    October 23, 2014 at 10:23 pm

    Thank you Matthew,
    I will let you know. I will write here my all experience for everyone interested to know in advance what to expect and how to react in similar situation.
    Regards,
    Mr. Dejan

    • arad
      May 11, 2015 at 7:26 pm

      so ..... what happened Dejan???

  7. Dejan
    October 19, 2014 at 10:11 pm

    Thank you MAtt,
    I can only loose my nerves and my reputation with this situation.
    Airbnb team can always check my recommendations from the hosts where I stayed before.
    I also rent my apartment in Skopje, Macedonia. When my guests leave, I ALWAYS find the time to show or at least to send someone close to check the apartment with my guests and to say good bye.
    I won't pay for something that I didn't do.
    Dejan

    • Matthew Hughes
      October 23, 2014 at 9:32 pm

      Ah, shame. Agreed, you shouldn't pay for something you didn't do. It's unfortunate.

      You sound like a good host! Next time I'm in Skopje, I'll check your apartment out!

      Let me know how the situation progresses!
      Matt

  8. dejan
    October 18, 2014 at 1:31 pm

    Hi,
    I have a question and I need someone experience in this situation:
    I am a frequent traveler and I often use airbnb. Until now I am very please with them.
    I have just come back from Paris where I was renting an apartment for 6 nights throw airbnb.
    Everything was ok until 2 days after me and my family left the apartment, I have receieve a phone call and then e-mails from airbnb where it says that I have left brocken the remote door shutter at the apartment.
    The day we left we have wait the apartment owner to come and check her apartment and to say good bye but she didn't come.
    We left everything like we found and i even went to buy toalet paper for the apartment.
    Two days after we left apartment owner throw airbnb ask 759 Euro from me for that shutter.
    I have specificaly ask and demand the airbnb team by phone and e-mails to send an expert at the apartment to check her theory, and I stil wait an answer. I feel very disapointed and furious right now.
    My dignity is blackened right now.
    I wont pay even one Euro for something I didn't do.
    I wonder maybe someone have some similar experience?!

    • Matthew Hughes
      October 19, 2014 at 6:19 pm

      Hey Dejan,

      Yeah, it's bad. And you should dispute it. There's a lesson to be learned here though. Before you check in, you should always, always, always take photos of the room, so you have something to back you up should things go awry.

      At this point, it's probably your host's word against yours. And I'm sorry to say, you're probably going to lose.

      Best of luck,
      MAtt

  9. dragonmouth
    October 17, 2014 at 9:55 pm

    "And if you have a bit of capital behind you, you can acquire enough properties to build a six-figure AirBnb business, as Bradley, the subject of this FastCompany article does."
    Before you embark on a supposedly lucrative career as a Airbnb entrepreneur, make sure you check the local laws and ordinances. As an owner of multiple rental properties, you will be subject to the same laws and regulations as the proprietors of commercial hotels. In fact you will be regarded by the municipal authorities as a commercial enterprise. You will have to meet the same sanitary, safety, fire codes, etc. as commercial hotels/motels. You MAY avoid the scrutiny of authorities or they MAY tolerate you if you set up your enterprise in Podunk or some other out of the way place, but then you will not find too many people wanting a room in Podunk. If you start renting multiple rooms, apartments or homes in a municipality that has a high hotel tax, such as New York City or San Francisco, the authorities will want their pound of flesh and will diligently and with alacrity make sure you pay all the taxes, permits and graft necessary.

    The Attorney General of New York State has just concluded an investigation of Airbnb. As a result of this investigation quite a few people will be forced to pay heavy fines while others will be facing criminal charges.

    • Matthew Hughes
      October 19, 2014 at 6:20 pm

      Agreed. But New York is a bit of an outlier. Most cities and locales are cool with AirBnB.