Is Airbnb hosting worth it? Airbnb vs Renting

Is Airbnb hosting worth it? You might be wondering whether you should become a host. Or maybe you’re wondering if becoming a landlord might be more profitable. There are benefits and disadvantages to doing either. Find out which option will work best for you.

Is being an Airbnb host worth it?

What is the downside of Airbnb? Reasons to be a landlord

How successful are Airbnb owners

Is Airbnb a safe bet?

Airbnb vs renting: which one is the best?

Is being an Airbnb host worth it?

There are several advantages to renting on platforms like Airbnb over more traditional options like short term renting. The world is changing fast and the profile of your typical Airbnb host may vary to being a landlord. Let’s have a look at some of the biggest plus points to being an Airbnb host.

Airbnb hosts can charge a high rate

Airbnb hosts can often charge guests a higher rate than they would if they were a regular landlord with tenants.

Let’s assume you’re charging £80 a night on average as a host. If rented out 365 days a year, that works out as £29,000. According to the ONS, the median monthly rent for London is £1,425. That works out at £17,100 a year.

Of course, many hosts won’t rent out their property all year round. Factors such as nightly rates and booking will also vary from region to region. But it does show an attractive potential for many hosts wondering how much they could earn.

Check out our Airbnb income calculator guide if you’re wondering how much you could earn as a host.

Legal regulations

To get set up as a landlord, you will need to conduct risk assessments, health and safety checks and make sure your property is safe and well maintained. You will also have to adhere to regulations regarding tenant rights and handling deposits.

The Airbnb industry by contrast is still an emerging industry and is yet to catch up although there are still laws you have to follow. You will still have to follow basic regulations such as for gas, fire and safety and it makes sense to keep your property in a good shape if you want to attract more guests. Some areas such as London also impose limits on hosting, although this depends on the region of the UK you live in.

As calls for more regulations around Airbnb grow, it also makes sense to focus on providing your hosts with a safe, comfortable experience. Doing this may also improve your bottom line.

But the more stringent rules landlords need to follow may make Airbnb seem more appealing.

More flexible lifestyle

Sites like Airbnb are short term in nature. Don’t feel like having guests over? Block out your calendar. Landlords with fixed term tenants often have less flexibility however.

Many landlords contracts allow tenants to reside in the property for a minimum period of 6-12 months. Getting them to leave during this period is not always straightforward either.

If you put a premium on flexibility then running an Airbnb property may make more sense for you.

Airbnb is a big market

According to Airbnb, UK hosts collectively earned over £1.5 billion in 2021. Whilst that’s not as big as the established landlord market, that’s a sizable chunk of the UK economy and will probably get bigger as people seek new and and more authentic ways of travelling. That’s encouraging for anyone looking to dip their toes into the Airbnb hosting market compared to a landlord market that is potentially more saturated.

What is the downside of Airbnb? Reasons to be a landlord

Whilst there are many positives to being an Airbnb host, that doesn’t mean that the lifestyle will suit everyone. There are also some inherent disadvantages to being an Airbnb host, which may make being a landlord more attractive.

Potential gaps in insurance cover

With Aircover, many hosts may be under the impression that they have full protection if something went wrong, but this is not the case. Whilst they do offer some cover, what they provide is not adequate compared to dedicated insurance and could leave you out of pocket. Most standard insurance also restricts what you can get cover for. Check out our Airbnb insurance page for more extensive information around this topic.

Mortgage and leasehold complexities

The buy to let mortgage market is well established for landlords, although the lending criteria means that not everyone will be able to get one.

For Airbnb hosts, those that rent out their own home may not be covered if their property is on a residential mortgage without prior consent. If that applies to you, speak to your mortgage provider first as the rules vary.

If your intention is to buy a property with the sole intention of renting it out, some lenders (e.g. buy to let) may consider Airbnb style hosting, but this may come with restrictions such as how many days you can do this in a calendar year.

You may also need to speak to the leaseholder if your property is on a leasehold as many leases also prohibit Airbnb style hosting activity.

Less spare time

Once you are all set up and have tenants in the property, the day to day management of being a landlord could be easier than running an Airbnb. Provided that you are following all of the required regulations, have a good tenant and your property is safe and well maintained, your involvement would mainly be needed when a problem arises.

Contrast this with running an Airbnb where you may be responsible for meeting guests, cleaning the property and dealing with day to day issues on a regular basis if doing it full time.

In both cases, you may be able to hire a property manager to take care of these activities for you. But if you’re not able to do that, consider the potential work involved.

Unstable income?

Both landlords and Airbnb hosts may experience periods where their properties are unoccupied. However, once a landlord gets a tenant in their property, the typical minimum tenancy period is 6-12 months.

Given the short-term nature of Airbnb hosting, Airbnb hosts may have more periods where no one stays at their property. How often this happens may depend on factors such as the location of your home, how good you are at promoting your property and general market trends. If your property is in a popular holiday destination then you may be affected by seasonality as well. Properties situated in big cities like London may be less affected by this. Crises such as economic shocks may also convince guests to travel less.

In times of uncertainty, it could be tempting to stick to more traditional property sectors than short-term lets.

How successful are Airbnb owners?

Definitions of success will vary from person to person but according to the report by Airbnb we referenced earlier, a ‘typical’ host may expect to earn around £6,000 a month, which they claim is double the UK median salary.

Whether you actually earn this amount may depend on several factors and many hosts may earn less than this. Success is not guaranteed, but it’s clear that some hosts can make decent money from the platform.

So generating an Airbnb hosting income stream could be a potentially lucrative venture, although it may not give you the same stability as being a landlord.

Is Airbnb a safe bet?

Like many things, you won’t be guaranteed an income as an Airbnb host, but factors such as owning a property in a more desirable location will make the security of your income more likely.

There a several ways you can make Airbnb a ‘safer bet’ and we’ve written several articles on the topic. Check out our pricing and occupancy, successful Airbnb hosting and Airbnb Superhost guides for more information about maximising and protecting your income. And if you’re just starting out, have a look at our guide on how to get started as an Airbnb host.

Airbnb vs renting: which one is the best?

Whether Airbnb hosting or renting is better ultimately will depend on your circumstances and what you’re looking for. But the heart of the issue can often be distilled down to the following questions:

1. Do you value flexibility or stability?
2. Are you seeking bigger returns on investment?
3. Are you willing to put a lot of time into hosting if you’re not hiring a property manager?

For potentially bigger returns and more flexibility, many people are attracted by the idea of being a host. And if you hire a property manager to take care of things like greeting guests etc, the day to day management of the property may not be as intensive either.

But to some, the stability of being a landlord could be seen as a more attractive and safe bet in the long run. Ultimately, there isn’t a right answer and some people with multiple properties do both.

If you’re just starting out your Airbnb venture or you’re already an Airbnb host, having the right insurance in place is important in order to protect your assets and your income. At Pikl, we provide Airbnb insurance built specifically designed to cover Airbnb hosts.