4th February 2019
Tenancy Issues that are Avoided with Short-Term Guests
It’s a common problem that New Zealand landlords face a huge thorn in the side of any investment, tenancy issues that dig deeply into the pockets of many property owners. Whether it’s damage to property, broken tenancies, unpaid rent or just pure time wasted, long-term tenancies are often a drain on what could be a lucrative venture – property investment. While it may have once seemed like the only viable option for homeowners, long-term tenancies are no longer the only way to do things. With the growing popularity of peer-to-peer networks such as Airbnb and Bookabach, it’s possible for people to earn more than they would with traditional rentals through these services.
What’s more, almost all tenancy issues faced in long-term agreements are avoided with short-term guests. While there are new challenges and other hurdles, short-term rentals have proven successful for a large number of Kiwi property owners. Through Airbnb investments and other similar endeavours, short-term rentals have become full-time sources of income around New Zealand and particularly in Auckland. Full-time sources of income that aren’t just existing to pay for themselves.
Short-Term Rentals Don’t Lock You Into Relationships with Problematic Tenants
Long-term tenancies are generally six-month leases at a minimum and are legally binding to both the tenant and the landlord. Laws protecting both parties restrict either from abandoning the lease without a justified reason. It is because of this that many landlords feel stuck in less than ideal situations. Tenants that disrespect property or cause problems are pretty much tied to you for as long as the tenancy is set. This means that problematic tenants could disrupt a landlord’s life for a significant amount of time if they decide to, leading to significant stress for the property owner.
With Airbnb, this isn’t the case. Not only are you able to thoroughly check references before approving someone’s booking request but because the stay is short-term, there isn’t the possibility of getting stuck in the same position as a long-term tenancy. The flexibility of short-term rentals appeals to many and not just those that want use of their property periodically. The chance to avoid undesirable tenants while still letting out a home is hugely beneficial. As this is a factor that prevents many from engaging in property investment, it’s an important point to note and a huge aspect of Airbnb’s growth in New Zealand.
Another advantage of short-term rentals being so flexible is that it is simple to make sure the property is vacant if the investor wants to sell it. By blocking the dates on the Airbnb calendar after the final booking, investors can easily make sure that they have a vacant property ready for the hammer. This can be done at short notice, and reservations can even be cancelled if absolutely necessary (although there may be a slight cancellation fee). This kind of flexibility makes property investing much more liquid than what is possible with long-term rentals.
Airbnb Hosts are Protected by the Host Guarantee
While you may have insurance on your rental property and a bond held as protection, it is often not enough to cover costs in the worst-case situations. This is an extremely unfortunate occurrence and while it doesn’t happen often, it can be difficult to recover from. When damage occurs that is higher to cover than bonds or insurance, it is always the landlord that must foot the bill in the end. Tenants that have painted without consent, ruined flooring or destroyed walls will usually get off scot-free unless legal action is taken and even then, it is a costly and time-consuming process.
Short-term rentals, on the other hand, are much better in this regard, particularly if you are choosing to go down the Airbnb route. While there’s always going to be the risk of damage occurring when you are letting somebody stay at your property, Airbnb’s Host Guarantee is there to protect users. Airbnb will cover up to 1.3 million dollars in damages if it is proven that a guest causes issues to a property, and all that’s required to make a claim is a few photos showing the damage. This large sum provides a lot of peace of mind to Airbnb’s user base and as it’s a lot higher than any bond, reassures property owners that they will be covered if things ever go wrong.
Substantial Time is Saved Through Airbnb’s Simple to Use Platform
Long-term tenancies eat up a lot of time. Finding tenants in the first place, maintaining the property and sorting out legalities, dealing with any requests they have and completing the tenancy upon its conclusion, there is nothing that happens overnight. On the other hand, one of Airbnb’s defining characteristics is its user-friendly interface, helpful customer service and its potential for fast turnarounds.
With Airbnb, many have found that they save significant time every month through the streamlined service. Its newfound popularity has also led to the sprouting of management and cleaning companies too, so, if you are truly after a hands-free investment, these businesses can completely take the reins and fulfil any duties you require.
Short-Term Rentals are Devoid of Many Issues that Plague Property Investors
Property investment should be profitable. It’s the entire premise of the venture and the only drawcard of what is always a considerable effort, planning and expense. Long-term tenancies can too often leave investors with a bad taste in their mouths, putting them off further opportunities and restricting their income. Short-term guests are a totally different story. Airbnb has allowed countless seamless experiences with their service, allowing landlords to completely avoid seriously detrimental situations.