I’ve been a landlord since the mid-2000s. Since then, I’ve both personally managed my properties as well as delegated this responsibility to professionals. For the most part, I’ve enjoyed the ups and downs that the role has to offer.
It was only until 2019 that I decided to list some of our properties on Airbnb. However, I incorrectly assumed that being an Airbnb host is similar to being a landlord. The reality is that these two roles are very different.
I’ve sought to illustrate these differences across the following three factors: time commitment, effort and upside.
Time Commitment
Being a landlord or host are not hands-off jobs. In fact, both require a minimum level of management and oversight.
Landlords have a limited time commitment. You’re required to perform regular inspections, be available for maintenance/repair work, as well as conduct rent reviews and negotiations. These tasks won’t consume much of your time, particularly if you have strong relationships with your tenant.
An Airbnb host’s duties are generally more time-intensive. As Airbnb stays and typically short-term, you are required to closely manage and supervise the property. This may include assisting with check-in and check-out processes, as well as addressing guest requests during their stay. These requests may be as simple as additional towels to requesting additional air-conditioning units.
Effort
I distinguish effort from time commitment, as it is effort that will determine whether your tenant/guest has a positive experience.
The overall effort level for landlords is generally low. Rental terms are typically long-term. During this time, the landlord is typically needed under limited circumstances (such as the ones outlined above). When needed, landlords simply need to be responsive and empathetic to the tenant’s requirements, to be successful in their role.
This is in sharp contrast to Airbnb hosts. The ratings you received will dictate your success and longevity as an Airbnb host. Maintaining high ratings is a product of responsiveness, consistency and memorable service standards. As such, you can’t fake effort when it comes to being an Airbnb host.
Upside
With upside, I’m referring to the expected return you can receive from being a landlord or Airbnb host.
Rental income from tenants is an excellent form of passive income. However, the rental amount is stable over the lease term, with limited instances for rent reviews or increases. Furthermore, rental amounts traditionally follow market standards. It is therefore challenging to charge above average rental prices without losing out to competition.
However, Airbnbs are different in that you are not marketing a stay, but instead an experience. Guests are willing to stay in local areas and experience local offerings, and they are willing to pay a premium for that experience.
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Whether you choose to become a landlord or Airbnb host will depend on your current workload, your personal objectives and your hospitality skills. Whichever path you choose, I’m confident you will have a fulfilling experience.
The content outlined above was written, edited and published by the Lost Realtor. The author has over 20 years or real estate sales and investing experience in the Australian property market. He has held senior positions in Australian building companies, including being the General Manager of the residential sales division of Collier Homes. His qualifications include a Bachelor of Commerce degree and a Graduate Diploma in Building and Construction Law.