How To Talk To Your Landlord About Airbnb Rentals

Running an Airbnb is a side hustle or business that many see themselves doing, if only they owned a home.

Valued at $36 billion, Airbnb is a booming company that many travelers prefer over traditional hotels. If you have an extra room in your rental or you’re often away, it seems like a missed opportunity.

But today, an Airbnb entrepreneur doesn’t need to be a homeowner. In fact, you can start and scale your Airbnb business without owning any property at all. But you have to do it the right way. Your landlord has to be on board.

It’s very important that you do not try to start this business before you’ve received your landlord’s approval. Your neighbors could easily tell on you, or your guests might have a party and get the cops called. There’s no way for you to know what will happen.

This isn’t a “better to ask for forgiveness than permission” situation. It could cost you a lot.

Here’s how to talk to your landlord about running an Airbnb on your rental, while also maintaining a healthy relationship.

Think about what your landlord wants

Your landlord monetizes his or her property through long-term rentals. It could be their side business or full-time income. In any case, it means they opted for a secure and low-risk income plan.

Your landlord may not like the idea of short-term rentals at first. After all, what could they get out of you running a business on their property?

Nothing but more risk. This is something you need to consider when you approach them about renting out spare rooms, apartments or even full homes.

Put yourself in their shoes. You own a house and decided to rent it out long-term. Then your tenant asks you if they can host strangers in it short-term to gain a massive profit off your property.

Your income stays the same but your risk skyrockets.

That’s how you need to approach this conversation with your landlord.

Calculate the risks and propose a mitigation plan

Don’t come to the conversation pretending there are no risks.

Your landlord will find things out when they do their due diligence. Come prepared and aware of the risks and with a plan to mitigate them.

Possible risks to your landlord are:

  • Sketchy guests that damage the property and/or harass the neighbors
  • Hefty fines from illegal Airbnb operations
  • Homeowners insurance won’t cover any claims if you use the space as a business

The last one is the main issue. Come to your landlord already aware of these risks and your proposal for mitigating them.

Here are the possible solutions:

  • Show them you already have a detailed plan for screening every guest
  • Do your due diligence. Show you know the jurisdictional regulations on rental arbitrage
  • Explain how the Airbnb $1,000,000 insurance guarantee works
  • Offer to take out your own vacation rental insurance.

These are the primary risks for your landlord. Below we’ll further ways to make them feel more comfortable with the arrangement.

Study the regulations

Listing your rental property on Airbnb is legal in many places. In others, it’s legal conditionally. But in some places, it’s straight illegal. It’s not your landlord’s responsibility to research.

Know the exact regulations that apply before proposing this to your landlord.

The first place to look is the Airbnb website itself. If you go to the Airbnb Help Center.

There you can look up your region and understand the regulations of your area. You can find all the information you need there. For instance, you can find links to the City Council regulations or other resources.

Map out a game plan of how you will ensure everything is in line with the law. Bring it to your landlord to discuss face-to-face.

Before approaching your landlord, read your rental agreement

You read it when you were first getting your apartment. But you’ll need a refresher before you plunge into this Airbnb business.

Most rental agreements have the following clause: “Tenant shall not sublet all or any part of the premises without Landlord’s prior written consent.” If you violate this clause, your landlord can evict you.

You may be in a tricky situation if:

  • You don’t have a relationship with your landlord.
  • You live in a rent-controlled apartment

These are great reasons for your landlord to say no. See if you can amend this clause for your new business venture.

Make sure you get anything you decide on with your landlord in writing.

Offer to split profits with your landlord

Even if you’ve calmed their qualms about risks and aren’t violating any laws or contracts, there’s still one issue. If they’re charging you $1000 a month, why on earth would they be okay with you charging guests $100 a night? Why would they want you to build a lucrative business on their property when they’re only making a modest income?

Sometimes this is what will make or break your deal. One option is to offer to split profits with them.

You still pay the same rent, plus more. Either a fix lump sum or a percentage of the profits. In this sense, you’ll become their short-term property manager. They will get an additional source of income without having to put any extra work in.

You can also explain to your landlord that you will make improvements to the unit. They’ll get the house back in a better condition than it was before and have made a profit.

Set expectations and rules that work for everyone — stick to them

Beyond the legal and financial risks involved, there are other things that could make a landlord uncomfortable.

This is their property, so you need to respect their rules.

Examples of rules they may want are:

  • Maximum or minimum stay lengths
  • How many times a month you will host people
  • Whether people can bring pets or any other rules they may want to impose.

Make sure it’s clear you will impose all these rules on your guests and penalize anyone who doesn’t follow them.

Show your landlord how you screen guests

Have a thorough guest screening process ready to show your landlord. As a basic screening, use the systems that Airbnb already has in place. You can set up requirements for people to book with you: verified account/ID has positive reviews, etc.

If you have a nervous landlord, screen your guests beyond the Airbnb process. You can start a conversation with the guest and get a feel for them. Ask them for their reason for travel, and ask them anything else that you or your landlord deem important.

Never accept guests who seem shady in any way.

Keep everyone in the loop

Keep your landlord and neighbors in the loop at all times. When will the guests stay? How many are there? You can also add a rule that your guests allow you to share their profiles with the landlord. This can add an extra layer of comfort.

Make it easy for them to say yes, but let them say no

In the end, it’s the landlord’s decision.

You need to respect their decision. But, if you come prepared and show you’ve done your research, you can be that much closer to a deal.

Featured image courtesy of Labels for Lunch (via YouTube).