What Are The Airbnb Hosting Risks

Airbnb: What are the risks involved in renting your home?

What Are The Airbnb Hosting Risks

What are the risks involved in renting your Airbnb home? When you read this you may decide short term rentals are too much risk. Yes, there are risks. And you must be aware of them. As in life, you cannot insure against all risks. As a clever man said, “A boat is safe in the harbour, but that’s not why boats are built!”

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  1. Is your home foolproof? If it can go wrong it will. If you have a long white hair carpet someone will stain it. They accidentally break a plate or vase. Ensure you have good quality, standard items that can be replaced in the blink of an eye rather than fancy items that may cost too much to replace when accidents happen. Be especially careful of your choice of carpet and ensure they are easy to clean. (This goes for upholstered couches too) It’s recommended that you do a foolproof audit of items in your rental.
  2. Cancellations: To protect against any last-minute changes we have opted for cancellation policy of 60 days (Bookings direct from our CapeHolidays site some guests are permitted to pay the final amount 30 days before arrival). As you know we also market on various booking sites and Airbnb is responsible for 80% and more of all bookings and (perhaps, unfortunately) critical to your success. What you read next may have you a bit worried but know the risk for cancellations is very low although the impact can be huge: Airbnb-guests can cancel anytime due to “extenuating circumstances” and get a refund IN FULL. Guests only need a doctor’s note of proof of some possible natural disaster or safety concern to cancel. On 26 November 2019 we had a meeting with Airbnb senior representatives about this risk. 
  3. Breakages, break-ins, injuries, accidents, and liability. You must have short term insurance and liability covering your home, guests, agents and others who may access your property. Although guests pay a small breakage deposit it will not cover expensive items. Owners must ensure that anything not recovered from the guest must be done against insurance. Agents, contractors, etc are also covered against injury, breakages, and damage. 
  4. Malicious Damage: From experience this kind of damage is infrequent; less than 1 in 1000 bookings. Since 2009 we can count bad incidents on one hand; a gentleman pretended to book for adults- instead of six young boisterous boys moved in, another was an infamous local South African band, the last incident was a group that enjoyed the view and booze so much they invited girls over and danced in the nude. The problem is a lack of evidence and early warning to the host (agency). Today cheap motion detection (fully declared) CCTV is recommended outside the entrance to the home. These must be monitored by the official host. Neighbours should also be notified of who to contact should they sense an issue developing.
  5. Short term regulations. Any day the local or national government may change the rules regarding short-term rentals. (Cape Town doesn’t allow bookings exceeding 30 consecutive days for the same guest/traveler. And who knows what the government has in mind). 
  6. Reviews. Very few hosts understand the importance of many 5 Star reviews. Everything possible must be done to get these reviews. They are building blocks of trust. Get this wrong and you may fail. Any issues, no matter how insignificant, must be addressed immediately and sometimes compensation may be required.? A bad review may stop all future bookings. Don’t underestimate a demanding guest who takes revenge with a review; it will be an expensive lesson.
  7. “Disasters” In case of a natural disaster, major political turmoil or local security concerns you will be required to refund any money when the guest cancels.
  8. What about cockroaches or similar? Are they natural disasters? Not really. But looking at how the odd guest re-act to seeing this EVIL you may see a side of humanity not making any human proud. You don’t want a croach or flea issue ever. And less so with your first booking. The review will kill any future attempts to attract good people. Fumigate. If the house is lived in during the year and only make it available year end then FUMUGATE! Guests will ask for a discount to start with. 
  9. Parties/Noise – early detection is critical. Here neigbours should be encouraged to contact the HOST immediately. This noise sensor could be a cool way to detect how many people are at your home at any time.
  10. Regulations: The government can any day change the regulations affecting short term rentals in general and Airbnb specifically. Read more here.
  11. Inaccurate Or Malicious Guest Reviews: Guests can be critical egos. They book a home but when they arrive they realise it’s 40 km from the Waterfront and they give you 1 out of 5 for Location. This is tame. A guest stays for a month. On day one she finds the door know broken. But she is very private (seclusive) and never really leave home. When she leaves she is so frustrated with the door know she gives you a bad review. You will never win them all. It is for this reason that we also meet guests to liaise and set our expectations; we tell them in a nice way that we are giving them “a remarkable home and we expect nothing but a 5 star review” when they depart. “If there are any issues they must notify us immediately”.
  12. Angry Neighbors. Most neigbours are easy to work with. Others may be offended by happy people. It’s important to have a communication network with guests. Be available and ask them to volunteer feedback. Most are willing to assist.
  13. Poor perimeter pre-warning: Security is a critical issue. Guests, obviously, have a responsibility but as the owner, you must give them the tools to feel secure. And we believe early warning systems; like beams outside the home is one good way.
  14. Guests not securing the property: Guests can make mistakes and leave a window open. They may sit outside under the umbrella and they leave it where the wind blows it away. All these issues common to locals are not known by guests. Inform them and have a proper house manual.

Let me remind you: Agency.CapeHolidays has been a short term rental agency in Cape Town from 2009. If the above issues were a regular experience we would not only NOT be in business, we would have departed. The risk is low. Very low. If all boats sank we would not have boats today! There is demand and we must set the rules to play a fair game.

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