Before Renting Your Property On Airbnb: What You Need To Know
If you’ve ever fancied renting out your property on Airbnb, you’re not alone. It provides an opportunity for property owners to find tenants, and make extra profit. But before signing up, there are things you should know be aware of to avoid complications.
In some cities, they have laws that will restrict you from hosting paying guests for short periods. Such laws form part of the city’s administrative or zoning codes. It means that you have to register, get a license, or receive a permit before you can have your property listed or accept paying guests.
And there are certain kinds of short-term reservations that may be outlawed altogether. Even though these rules may be confusing at times, it’s important to learn everything you can to avoid falling foul of the law.
Protection Against Damages or Incidents
Even though Airbnb provides protection insurance to homeowners inviting paying guests onto their property, they may not be fully protected against damages or unfortunate incidents. For instance, if your guest suffers physical harm while on your property, you may not be covered against such an incident. It’s therefore important that you buy insurance for the property and its contents so that you’re adequately covered against any eventuality.
Fire Safety Order
The Government’s Fire Safety Order stipulates that anyone who takes paying guests onto their property should comply with regulations concerning fire risk assessments while taking the mandatory steps to guarantee a sufficient level of safety.
Since you’re earning rental income, it’s important to pay your taxes depending on how much you’re going to earn by leasing your secondary home. Even if the tax authorities don’t send your tax documents to fill, you have a responsibility of reporting your earnings when you file your tax returns to avoid hefty fines in the future.
But before you invest in another property to put up on AirBnB, there’s something that you need to consider. Since the beginning of 1st April 2016, anyone who buys a second property for any reason will have to pay a higher rate of stamp duty compared to someone buying a property to use as their main residence. And this surcharge also applies if the primary residence your presently own is abroad. On your primary residence, you only pay tax if the purchasing price is above £125,000. However, if you plan to invest in a second property costing £40,000 and above, you should be prepared to pay tax, and at a higher rate of stamp duty.
So there you have, these are some important things to consider before you venture into short-term property rental. Besides complying with the law, you also need to exercise caution when inviting strangers into your home, and that means screening potential guests.
If you want to know what it’s like to rent out to strangers, a great way is to interview people who have rented out to Airbnb. If you don’t have friends or relatives to enquire from, attending property meets is a good option to meet property owners that have tried Airbnb. I usually recommend two, PIN Meetings of Simon Zutshi and We Buy Houses community meet-ups of Rick Otton, because they hold free events each month, so registration is easy.