Airbnb vs Traditional Renting: How the Two Compare?

Over the last three months as I've delved into doing Airbnb, I've realized there are a lot of advantages and disadvantages of it compared to traditional renting. What has been even odder is that the house I'm Airbnb'ing is sitting next to a house that has been vacant for four months while it awaits new renters.

airbnb rentalOver the last 8 years I've watched my neighbors house have five different renters. This house is a 3-bedroom 2-bath house that has an unfinished basement and upstairs. We live in a primarily military community that is very transient and a lot of families come and go pretty quickly. So it is fairly easy to get your house rented, but you need to have it listed between February and May if you want to find renters.

Now compare that to our Airbnb experience. Between September and December we've had six Airbnb tenants for a total of 21 days over the last four months. For those 21 days of usage we've made $2802. That is an average of $133/day. As you can see there can be huge upside potential for listing your house on Airbnb vs traditional renting.

Here is a breakdown of some of the perks of listing with Airbnb:

Bigger upside potential

Our Airbnb rental has been rented for 21 days over the last four months and made an average of $133/day. If my same Airbnb rental could be listed for 30 days out of a month, then it is possible this same unit could make $3990 over a month's time frame. Now compare that to my neighbors house that has been vacant for the last four months, which is listed for $1400/month. That is the potential for a 3x earnings compared to renting it out.

Better tenants

The Airbnb community is huge and people rely on ratings and reviews. With the tenants we get we're able to pre-screen them and ensure that we don't get anyone that isn't verified and won't just trash your place. So far, everyone has left the place extremely clean and were a delight to deal with. I've been really amazed at how much they've cared for our rental, and treated it like their own home. The point here is to be sure you read the possible tenants reviews!

Ensuring that your house is well-maintained

The benefit of utilizing Airbnb is that you can frequently check up on the house (after each visit), and ensure there isn't any damage to walls, furniture, flooring, or appliances. With traditional renting you probably are only ever able to enter the house, but once per year. With Airbnb it gives you the frequent ability to make sure your house is being well taken care of.

Airbnb provides host protection insurance

Airbnb provides coverage of up to $1 million for host protection insurance. Compare that to your traditional renting. You have to cover yourself with insurance, which eats into your profits. Be sure to read the Airbnb Host Protection policies on what it covers, but it is definitely a nice insurance policy.

More posts on Airbnb:

Over the last four months I've truly enjoyed working with Airbnb and think it provides a better option than traditional renting. Some people in California are even evicting their traditional renters in order to list them on Airbnb, because the profits are so lucrative. Make sure you know what you are doing before you make the switch, because you can definitely get in trouble with the law.

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  1. Man, I’ve still heard renting horror stories from both traditional renting and AirBnB. While I’m sure this doesn’t happen the majority of the time, it definitely makes me stop and think.

    I really would like to earn passive income through renting one day. But it’s important to understand what types of properties and renters you’re willing to work with!

    • Mrs Picky Pincher – You have to be careful when you step into either traditional renting or Airbnb. This is where tenants make all the difference.

      If I were you I’d start out with Airbnb just to get started in the passive income rental business with just renting out your primary residence. Have you tried that yet?

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