The “sharing economy” is booming, with services like Airbnb, Uber, and EatWith allowing travelers to sleep, taxi, and eat with local citizens for a fraction of the price of traditional hotels, cabs, and restaurants. Airbnb in particular has been growing in popularity in major US urban areas, where owners and tenants can now generate extra income by renting out their units to visitors on a short-term.
However, you should know that the service is not without some serious downsides. Recently, New York City has taken steps toward legislating against AirBNB use for a variety of reasons.
Here are some of the reasons why renting your unit on Airbnb is not a good idea:
1. Legal Reasons
Most cities, including Chicago, have a policy that makes renting out a room for less than 30 days illegal if you don’t have a hotel permit. That effectively puts all Airbnb rentals in a gray area, legally speaking.
In a multi-unit building, an owner who rents his or her unit on Airbnb effectively gives a stranger the keys to the whole building. The keys can easily be copied before they’re given back. The other owners and tenants of the building you most likely not OK with this serious security breach.
Hotels have robust insurance policies for a reason. An Airbnb renter who gets hurt can sue the unit owner, or even the whole building, depending on where the injury occurs within the unit or in a common area. Without the insurance policy of a hotel, a condo building can find itself in a very difficult litigious situation.
4. Wear and Tear
Owners and renters buy into a building with certain expectations. Renting out a unit repeatedly on Airbnb takes a toll not only on the unit itself, but also on the common parts of the building, thereby undermining every other owner’s investment.
5. Quality of Life
Many Airbnb renters are perfectly respectful of their surroundings, but it’s impossible to predict a guest’s actions. Short-term guests are not always aware of their neighbors’ needs and expectations, which increases the chances for misunderstandings and tensions between neighbors.
For these reasons, you should consider carefully whether the short-term gains of renting out your condo on Airbnb are worth the risks to you and your fellow owners. We think the answer is clear, and don’t recommend this practice for anyone living in the buildings we manage.