Thinking of Airbnbing your condo? Maybe you're already making extra money hosting guests for a few weekends.
Landlord beware! Here are a few risks to consider before choosing this business model:
- More and more condo associations are forbidding Airbnb. Even if some continue to tolerate short term rentals today, there is no guarantee that at the next association meeting co-owners won't decide to ban the practice.
- Insurance presents a serious risk. Even though Airbnb offers its landlords some type of insurance, you can be sure your home insurer won't like short term rentals. Most insurance companies require that landlords sign long-term leases with tenants (usually 1 year+). Your insurer may not know what kind of lease you have running at this very moment, but you can be sure that if something major goes wrong they'll go digging. If you've been signing shortterm leases and your policy forbids it, they may not cover damages. The same goes for your condo association. Co-properties have collective insurance. If something goes wrong with one of your rentals and the condo association gets involved, the building's collective insurance may refuse to pay. You'd don't even want to imagine the lawsuit here!
Guest post by Terrie Schauer, Investment Property Specialist