How to Rent an Airbnb to Friends and Family
Acquiring an investment rental is an exciting accomplishment, especially if it’s your first one. It’s only natural to want to share your new space with your loved ones. But renting out your investment property to friends and family can get a bit tricky.
If your relatives are interested in staying in your vacation home, there are a few steps you should take to make sure your property, calendar, and personal relationships remain intact.
Advantages to Hosting
Family & Friends
Lending your vacation home to a friend or family member comes with a number of benefits. The first advantage is that you get to provide an enjoyable experience to your loved ones at a discount, if you so choose. You can also join in on the fun should your schedules align.
Allowing relatives to book your short-term rental also provides you with peace of mind, given that your home is in trusted hands. Owners renting out to their loved ones can usually expect timely payments and an undamaged home when the keys are handed back to them.
Additionally, you won’t have to go through the time-consuming task of advertising your property. This is especially beneficial if your relatives decide to book for an extended period of time. Consistently booking quality guests requires thorough descriptions, high-definition photos, and constant monitoring of the market. When you rent to someone you know, you bypass the need to stand out among the competition.
Drawbacks of Hosting Family & Friends
However, for all the benefits that hosting your loved ones may bring, there’s also a number of drawbacks to consider. Your friends and family should always bear in mind that your investment property is a business venture. As such, they have a responsibility to make payments on time, follow house rules, and avoid damages to the property. Given that you have a pre-existing relationship with your guests, contracts and payment timelines can fall by the wayside, causing disruptions in your Airbnb business.
Should a major damage take place and your friend or family member be unable to compensate, your pockets might end up taking a big hit. Friends who fail to follow house rules, such as no loud music after a certain hour, might strain relationships with neighbors. These fractured connections could come back to haunt you during future guests' stays.
Although it’s not pleasant to think about, your guests could end up taking advantage of your close relationship by asking for inappropriate price reductions or payment extensions. To avoid uncomfortable situations where your personal relationships or vacation rental business could be put at risk, it's important to establish landlord-tenant expectations, even with loved ones.
5 Ways to Successfully Host Friends and Family in Your Airbnb
Below you’ll find five guidelines every property owner should follow when renting out their vacation home to their loved ones.
Host according to high and low seasons
Understanding your peak and off-peak seasons is crucial in the travel industry. This becomes especially important when renting out your vacation home in LA to personal guests. Vacation rental hosts typically offer their loved ones a discount, but during high season, this may not be a smart business move. You’re likely to miss out on lucrative opportunities if you let family and friends stay during peak seasons.
It can be uncomfortable letting your cousins know you can’t host them during the 4th of July weekend, or that if you do, they have to pay full price. That’s why it’s best to be proactive and offer friend and family dates in the low season right off the bat. This allows your loved ones to enjoy your space at a discounted rate, without significantly diminishing profitability.
Purchase liability insurance
Obtaining liability insurance for your Airbnb is a no-brainer for any property investor. However, if for some reason you haven’t purchased liability insurance for your short-term rental, definitely secure it before hosting friends and family!
Even if you know your loved ones are financially responsible and cautious with others’ belongings, it’s best to have insurance in place to cover any kind of accident that could negatively impact your vacation rental.
Use a vacation rental agreement| contrac
It can be incredibly tempting to skip a vacation rental agreement with your personal guests, especially if they are close relatives of yours. However, it’s best not to.
Vacation rental agreements establish responsibilities of both parties throughout the duration of a stay. This benefits everyone involved, ensuring both property owner and guests are aware of their roles. It’s up to you to determine what those roles and responsibilities will look like.
A short-term rental agreement can include:
Maximum occupancy
Maintenance expectations
Payment terms and timelines
Check-in and check-out instructions
Relevant safety precautions
Coordinate with your co-host
If you’re not the one directly communicating with guests, as is the case with property owners who manage multiple rentals, remember to inform your property manager of any special conditions regarding your loved ones.
You may want to tell your vacation rental manager to reserve specific dates during the low season for pre-planned family gatherings. This avoids scheduling conflicts with future full-paying guests. You also want to discuss how you will handle any property damages, should they occur.
Organize your tax deductions
As a vacation rental owner you’re probably aware of the tax implications that come along with operating your business. Taxes can take a large chunk of your earnings, so it’s important to take advantage of any tax deductions available.
Deductions help lower taxable income, and thus, lower your tax responsibility at the end of the year. For property owners, the amount of time you spend at your vacation homes for personal purposes can be deducted from your taxable income.
New Airbnb hosts are often surprised to find out that the time friends and family stay at their vacation rental can count towards that personal time, as well. According to the IRS, all of the following stays qualify as ‘personal use’ of your vacation rental:
You
Family members
Friends
Anyone paying less than fair market rate (which varies depending on peak and off-peak seasons).
Contract a Full-Service Vacation Rental Management Company to Help You Run Your Airbnb Business
Running a successful vacation rental business is an exciting and lucrative opportunity, but the daily tasks of managing multiple properties can be challenging. If you want to maintain top-tier business operations, contact us today to learn more about our full-service vacation rental management services.
MB Experiences is a boutique rental management company, offering personalized services that are guaranteed to set your property apart from the competition. Call us today to get started!
