Airbnb Long-Term Rentals: Is It a Good Fit for You?

During the coronavirus pandemic and travel restrictions, Airbnb hosts experienced a decline in bookings and scrambled to find new short-term rental guests. To keep their businesses afloat, many of them converted their properties into long-term Airbnb rentals.

Today, longer-term rentals are becoming increasingly popular among remote workers, traveling professionals, and families seeking temporary housing. Bookings of 28 days or more now account for a considerable portion of reservations on Airbnb.

As demand for flexible living spaces grows, many Airbnb hosts are reevaluating their short-term rental models and offering monthly stays. But how can you know if transitioning to long-term hosting is the right option for you?

Keep reading to learn how Airbnb works for long-term rentals.

Why Are Airbnb Long-Term Rentals Popular Among Guests?

Airbnb long-term rentals tend to attract different types of guests who are looking for a temporary home away from home and don’t want to get locked into year-long leases:

• Work-from-home professionals are looking for rentals that offer a home office to have a quiet place to work.
• College students and interns who move to another city to study, and workers who have far-from-home missions, are also choosing Airbnb rentals as they offer more privacy than hotels.
• Travelers who plan longer trips often book extended stays on Airbnb instead of hotels because Airbnb stays are more cost-effective, giving guests better value for money

Keep in mind that people who book longer stays tend to actively look for listings with weekly or monthly discounts. Therefore, Airbnb encourages hosts to set a monthly discount rate on their listings.

Monthly and long-term rentals can help increase occupancy rate, providing hosts with a reliable income stream at a smaller workload. This solution comes with a price: a significant decrease in the nightly cost.

Of course, as a host, you can earn more from short-term rentals. However, you can also utilize the Airbnb monthly stays feature to rent out your property on a long-term basis. This approach can help you sustain your rental business during quieter months. Short-term and long-term rentals are a delicate balance between revenue/operations overload, and safety/peace of mind.

When you list your property on Airbnb, your goal is to make a profit, so setting the right price at the right time is crucial. The easiest way to optimize your pricing and stay competitive is to use an Airbnb dynamic pricing tool that will help you automatically adjust your rates based on changes in supply and demand.

There are many third-party dynamic pricing tools that utilize advanced algorithms and data analytics, offering automated price adjustments; however, these tools come with associated costs. The good news is that if you opt for Hospitable as your property management software, you’ll be able to take advantage of our built-in Dynamic Pricing feature that is included in Host, Professional, and Mogul plans at no extra cost.

Hospitable’s Dynamic Pricing will automatically adjust your nightly rates based on the latest market conditions to help maximize your revenue and maintain optimal occupancy. The prices are automatically updated every 24 hours and are pushed to all your connected booking channels, including Airbnb, Vrbo, Booking.com, Agoda, and your Direct booking website.

Airbnb Monthly Rentals: Pros and Cons of Long-Term Rentals for Hosts

Both short-term and long-term renting have their advantages and disadvantages. You should take them into account when deciding whether to offer Airbnb monthly rentals to your guests. Let’s take a look at the pros and cons of Airbnb’s long-term rentals.

Pros:

• Steady revenue throughout the year (even during low season).
• The most beneficial type of cancellation policy.
• You will have fewer operational responsibilities.
• Lower turnover costs.

Cons:

• With a fixed monthly fee, you won’t be able to adjust the price during a high season to maximize your profit.
• You’ll have less freedom to manage your Airbnb rental property as you like.
• Long-term guests use their Airbnb rental as a primary residence so that they may cause more wear and tear.
• Higher risks of dealing with Airbnb squatters and problematic guests that may cause damage to your property

Before accepting long-term guests on Airbnb, take measures to mitigate potential risks. Although Airbnb performs background checks on guests, its system isn’t perfect. You need to take additional steps to thoroughly screen your long-term guests before confirming a booking – check your potential guest’s profile, read reviews written by other Airbnb hosts, and search for additional information about the potential guest online.

With Hospitable, you can add an extra layer of protection on top of Airbnb's verification process and your research. We highly recommend you request an ad-hoc guest screening powered by Autohost. Check out our help article to learn more.

Ask your guests to sign a rental agreement. This legally binding document will help set clear expectations with guests and protect you and your property. The good news is that creating a new contract for each new reservation doesn’t necessarily mean doing tedious paperwork. Hospitable can automate this process for you. You can create a template agreement, and Hospitable will automatically populate it with guest and booking data, then send it to your guest for signature as a registration task.

Charge a security deposit. Although Airbnb doesn’t allow hosts to charge security deposits directly on the platform, you can take advantage of Hospitable’s built-in security deposits feature that helps hosts protect their properties and automate the collection, management, and release of deposits. This solution is currently available to all Host, Pro, and Mogul plan users, as well as users on Direct Premium. Learn more in this help article.

How to Offer Airbnb Monthly Rentals

There is no difference in the online listing of your property for short-term or long-term rentals. Still, you need to optimize your Airbnb listing and encourage guests to book your property for the long term:

• Enable longer bookings for your rental
• Offer monthly discounts to attract bookings
• Consider the different needs of long-term tenants vs. short-term guests.
• Update your house rules for monthly stays.

When preparing your place for long-term rental, consider the following tweaks:

• Offer a well-equipped kitchen, a fridge, a washing machine, and other essential supplies and amenities.
• Offer stable and strong WiFi and create a workstation to attract working professionals.
• Provide your guests with a detailed house manual with additional instructions and recommendations for day-to-day living. For example, on which days the garbage is collected.
• You should also update your Airbnb welcome book and provide your guests with more useful information about your area to help them enjoy their stay.
• Make sure to tick off all points in our list of solutions to prepare your place for rental. This will save you a lot of money in the long run.

Maintain healthy communication and support your guests during their longer stay, helping them feel like a part of the local community.

The choice is yours. You can play it safe with a long-term rental or continue betting on higher short-term rental margins.

Conclusion

Airbnb facilitates the hosting of long-term rentals on its platform by introducing several new tools to give hosts the chance to try long-term hosting. That provides advantages for hosts because Airbnb holds the funds, and you don’t need to go through a real estate agency or advertise the property yourself outside of Airbnb.

Still, Airbnb long-term rentals are a serious commitment for hosts, and you should have a good understanding of your local Airbnb regulations. However, if done right, making your rental property available for longer terms can be incredibly rewarding.

Be sure to prepare your place for rental. We have compiled a comprehensive list of solutions that can help you avoid excessive operational costs. Download now for free!