top of page

Maximise your rental income!

A Landlord's Guide to Airbnb Vs Renting

Landlords can generate a considerable and consistent income from renting out their properties to short-term and long-term tenants. If the property happens to be located in a tourism hotspot or in a major city, then that income can be pretty substantial. The only question at that point would be the mode of choice for renting out their property.

Should you go with traditional property rental or use Airbnb? The answer will vary, depending on factors such as rental term, exact location, income expectations, property type, etc. Therefore, we need to take a closer look at those factors and compare how they play out in different circumstances. Let’s get started.

Exploring location advantages. Tourism hotspots and major cities.
Considering factors for rental options: Location, income expectations, and property type.

What is Airbnb?

Before we can discuss the advantages and disadvantages of Airbnb vs renting out, it’s important to first gain a proper understanding of what Airbnb is. Airbnb is an international online marketplace for both landlords and tenants to find each other. The landlords, aka the property owners who list their property with Airbnb are called hosts, while the tenants looking for rentable properties are called guests.

Airbnb is built around the idea of providing guests with cost-efficient homestay options that is closer to a true home away from home experience than any hotel room can ever hope to be. The platform lists several different types of host properties that range from single bedrooms in small apartments to large houses and even entire apartment buildings.

Guests can choose what they like and need, based on their specific requirements and respective budgets. For landlords who don’t actually live in or close to the property they are renting out via Airbnb, all duties and responsibilities of the landlord are managed locally through rental property management companies like UpperKey.

It should be noted that guests can rent properties via Airbnb for both short and long stays, but Airbnb rentals are best suited for short stays. Most of the host properties listed via Airbnb are suited for vacationers, tourists, and business travelers. Nevertheless, there are options on Airbnb for hosts to rent out their property to long-term tenants as well. It’s a comparatively newer addition to Airbnb, so availability will vary depending on the concerned location.

UpperKey property management blue banner

Airbnb vs Renting Out: What is the Difference?

If we were to pit one against the other in a direct Airbnb versus renting comparison, we would first have to acknowledge the fact that there are three different concepts here, each closely interconnected with the other.

  1. Airbnb is an online rental platform for landlords and tenants to find each other.

  2. Renting out refers to the actual act of becoming a landlord, be it via Airbnb, Upper Key, or any other online or offline medium.

  3. Renting refers to the act of becoming a tenant by renting one of those available to let properties.

Any property that you rent or rent out using Airbnb is still a rental property. In that respect, Airbnb vs rent out property is not even something that we can compare because they are not competing concepts in real estate.

However, if we were to compare renting via Airbnb versus renting traditionally, then that would be a more substantial comparison. There are quite a few differences between rental property listed on Airbnb vs rental real estate in its more classic sense. We will focus on those differences next.

Airbnb vs Rental Property: Differences in Agreement Tenure

One of the main differences that originally separated properties listen on Airbnb from traditional rental property is the tenure of the agreement. Airbnb rental agreements were originally short-term contracts only. The hosts and the guests were just that, which is to say that landlords played host to traveling guests for the duration of their short stays at the concerned locations.

Traditional rental agreements, on the other hand, are never as short as their Airbnb counterparts. Even the shortest classic rental agreements will normally last for anything between 6 – 12 months at least, while the shortest Airbnb rental agreements could be valid for just a few days or less. Even though Airbnb now lists properties to let for long-term guests as well, it’s still a service with limited availability and a much shorter contract length limit as compared to the average, traditional rental agreements.

Airbnb vs Renting Out Traditionally: Differences in Flexibility

The contractual agreement between a landlord and a tenant is legally binding, irrespective of whether it’s an Airbnb listed property or not. However, landlords renting out through Airbnb enjoy significantly more flexibility as far as their ability to make quick changes to rental agreements are concerned. Since each new agreement lasts for a few days or weeks for the most part, there is no law to prevent landlords from creating a new rental agreement for a new tenant at the end of the former tenant’s stay.

This allows Airbnb landlords unmatched flexibility to change terms, conditions, and rent pricing at the end of each stay to match the present demand. As far as the comparison between Airbnb vs renting income is concerned, this can make a huge difference for landlords who own properties at famous tourist spots. The ability to increase the price of rent during peak season is the kind of flexibility that only hotels and motels could enjoy, prior to Airbnb.

Endless possibilities for Airbnb landlords to create new agreements for each new tenant
Quick changes to rental agreements. Unmatched flexibility for Airbnb landlords.

There is no scope for such changes if a landlord takes the traditional route though because traditional rental agreements cannot be changed based on whether it’s peak season or not. Landlords will need to wait until the present contract has run its course before any question of rent price renegotiations can be raised. In fact, the same can go in favor of the tenant as well, depending on their circumstances.

It is quite common and completely legal for Airbnb landlords to include clauses that clearly state if the rent will go up during certain months of the year and by how much. If the tenant does not agree with those terms, they could simply opt for a shorter contract with the landlord, before moving to more affordable renting options during the peak season. From the perspective of long term tenants living in a tourist spot, the advantage is clearly in more traditional, longer rental agreements that do not allow for as much flexibility.

Airbnb vs Traditional Rental: Differences in Property Management

Airbnb offers a lot more freedom to landlords than any traditional rental agreement can. Although this will vary depending on the kind of contract we are discussing, most Airbnb short term contracts do not even make it necessary for the hosts to be present during the guests’ stay. However, that’s not always true, even for Airbnb listed properties. The responsibilities are always more serious if it’s a traditional rent agreement of course, but here are rental contracts that obligate the host to be responsible for several similar responsibilities as would be applicable for a traditional landlord.

Depending on the kind of host you signed up as, you may need to provide many of the same services that landlords are supposed to provide to their tenants in a traditional agreement. This would be especially true for comparatively long stay Airbnb agreements. Landlords working with UpperKey will not need to worry about property management duties and responsibilities, irrespective of whether it’s a traditional rental agreement or one an Airbnb rental contract. Upper Key handles all applicable responsibilities on behalf of the landlord.

Airbnb vs Renting: Faster Resolutions

When you become a landlord, any violation of the rules specified in the contract could entitle you to pursue the legal route, if conflicts with the tenant arises. However, it’s a long and often unnecessarily expensive process. Unless it’s a really huge issue, no landlord would even consider paying a fortune in legal fees to seek compensation for a small loss.

In most instances, they are left with very little choice other than to accept the loss and wait till the contract is over. Airbnb hosts have a much faster and more reliable path to find resolution and compensation for small losses. They can contact Airbnb directly and receive a quick resolution. If it’s a genuine issue, Airbnb will compensate the host in most cases.

The same goes for tenants as well. If the tenant finds a valid reason to complain about, they can raise a complaint and find quick resolution via Airbnb. Therefore, that’s a huge point in favor of the platform, as far as Airbnb vs rent agreements in the traditional sense are concerned. If your Airbnb property is managed by UpperKey, they will take care of the whole process of contacting and finding conflict resolution through Airbnb on your behalf.

That just about wraps up the most important differences in this guide on Airbnb vs rental property advantages and disadvantages. As mentioned earlier, it’s all about the location of your property, what kind of landlord you want to be, and the type of real estate we are discussing here. In terms of Airbnb vs renting income and flexibility, Airbnb is going to be the better option over traditional, short-term renting in popular locations. However, long term rental agreements still make more sense in residential areas where the demand for long term rental properties is high.

UpperKey property management blue banner


Determine your property's rental value with UpperKey as your tenant

bottom of page