Renting out your property can be a profitable and good solution for homeowners, especially if you own a vacation home that is vacant for a large part of the year. When considering renting out, one often wonders whether to rent out to strangers from all around the world through one of the major platforms, or solely to friends and family. Both options have their advantages and disadvantages, and it is crucial to make a thoughtful assessment to avoid potential problems.
Advantages of renting out your property to strangers:
Renting out to strangers through one of the major global platforms, such as Airbnb or Vrbo, can open up a broad pool of potential tenants and guests. In addition, there are some other advantages:
- Higher price: By renting to strangers, you can potentially charge a higher rental price since you have potential guests from all over the world seeking accommodation. However, keep in mind that a higher price does not necessarily mean higher rental income, as many of the major platforms take a relatively high percentage of the rent.
- Less personal: This is not an advantage for everyone of course, but some prefer to have tenants and guests with whom they do not have a personal relationship, treating it strictly as a business arrangement.
Disadvantages of renting out your property to strangers:
- Higher risk and uncertainty: Having strangers as guests means you need to spend more time ensuring that they are reliable guests, although it is impossible to guarantee it completely. Once the guests have arrived, you also need to ensure that they behave appropriately, do not disturb neighbours, and do not damage your property or furniture. This can be challenging and time-consuming when the guests are not personally known to you.
- Higher costs: As mentioned, the global platforms charge high fees, and in addition to that, many external companies cover various services you have to pay for such as monitoring, key handover, and cleaning. Furthermore, wear and tear on furnishings and furniture should also be considered, even when renting to friends and family. Generally though, people take better care of something when they have a personal relationship with the person they are renting from.
Advantages of renting out to friends and family:
Renting out to friends and family (and even friends of friends) can be appealing due to the already existing relationship. There are several other advantages, for example:
- Trust: You already know your friends and family members and have an established relationship with them. When it comes to friends and family, you can generally trust that they will behave and take good care of your property.
- Simpler communication: Since they are people close to you, it is easier to communicate and handle any issues or questions that may arise during the rental period. On the major rental platforms, everything that happens needs to be communicated and reported through the platform, which can be a lot more complicated.
- You help each other: By renting out to friends and family, you help them find accommodation while generating a rental income for yourself. It doesn't get much better than that—a win-win situation for everyone!
Disadvantages of renting to friends and family:
Of course, there are also potential disadvantages renting out to friends and family, and it's good to be aware of them as well. Here are some drawbacks:
- A limited number of potential guests: If you restrict yourself to renting out to friends, family, and friends of friends, you naturally have fewer potential tenants. On the other hand, you know who they all are, so even though the supply is lower, it may be more comfortable knowing them.
- Lower price: This may not always be the case, but often a slightly lower price is agreed upon when renting out to friends and family. This means a slightly lower rental income, but it also potentially saves you a significant amount of money on booking fees and other costs associated with renting out through the major global platforms.
- More personal: This is also not necessarily a disadvantage, but some may feel uncomfortable with the more formal aspects of renting out, such as contracts, deposits, etc., when there is a personal relationship with the guest. In this case, clarity is essential, and if you as the owner want a contract (which can be beneficial), you should arrange for one.
Making the right decision for you and your property:
When it comes to renting out your property to strangers or to friends and family, there is no simple answer or right or wrong choice. The best decision for you depends on your personal preferences, risk tolerance, and other circumstances surrounding your situation and property.
Fees for both guests and hosts on the major platforms for rentals are however increasing, and the risks associated with renting out to strangers are significant. Renting out to friends and family is becoming more appealing, but at the same time, organizing rentals can be challenging because there has not been an easy way to advertise your property to friends and family.
heimo - your social network for housing
On heimo, a new innovative service platform for the housing market, you can easily control whom you want to rent out to. You create your profile, add information about your property, and indicate that you are open to renting out. Invite friends and family to join your network, just as you are accustomed to on other social networks, to create your own personal housing network of reliable individuals and professionals. Then, you can choose whether you want to rent to your network of friends and family, friends of friends, or people from around the world. It really couldn't be simpler. Sign up to join heimo now!