Page 23 - Real Estate Now - November/December 2021

if there are multiple short-term visits, the insurance company might require you to buy a business policy that would
cover a hotel or a bed and breakfast.

Damage

Airbnb’s host guarantee doesn’t protect against wear and tear to your place, but you can charge a security deposit to
cover possible damage.

Installing a reasonable security deposit is a no-brainer move for new hosts. Airbnb allows hosts to set up a security
deposit to cover minor damages that would not be covered under the Host Guarantee. For example, if a guest breaks
a door handle while staying at your property, you’ll want to replace that before the next guest comes.

However, Airbnb won’t consider this damage to be major and won’t cover it under the Host Guarantee. As a result,
this becomes an out of pocket expense for you, unless you charge the guest a security deposit. When guests make a
reservation, they are not immediately charged for the deposit – only if a host makes a claim.

Even if a host is only renting a single room, a security deposit is a safe move just in case anything gets damaged.

Getting paid
Airbnb could require you to refund a guest’s
payment if you cancel a reservation at the last
minute, forget to leave the key, misrepresent
your listing, don’t clean your home or otherwise
fail to meet Airbnb’s hospitality standards.
Airbnb suggests making sure you’re available
during the guests’ scheduled check-in to
address any concerns.

Airbnb’s payment system is quick and efficient.
Payments are sent through direct deposit after
the guest completes their first night (regardless
of the length of stay).

When a guest books a host’s space, they also
agree to the host’s cancellation policy, which
dictates the percentage of the booking costs
(minus Airbnb’s cut), if any, they will get back. Most moderate policies allow a guest to cancel within two days of the
first night to get their money back. Less moderate policies allow the host to collect more of the booking money.

Host cancellations also happen from time to time. One study found host cancellations are the top complaint on
Airbnb, representing about 20% of all complaints.
Depending on when a host cancels a stay, they’ll be deducted either $50 or $100. If a host cancels three or more
reservations within a year, Airbnb may deactivate the listing.

To Airbnb or not to Airbnb
If you talk to enough long-time Airbnb hosts, they’ll be able to tell you an endless number of stories about inspiring
and interesting guests who shared their home. Others might have bad experiences. There are clear potential
advantages and disadvantages to becoming an Airbnb host.

However, if all the regulatory checks are taken care of, the space is up to par and you’re taking your hosting
responsibilities seriously, the platform can serve as a nice way to earn extra cash and meet interesting travellers from
around the world. g
The article above is for information purposes and is not financial or legal advice or a substitute for financial or legal counsel.

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