Being a homeowner can be rewarding but can also be headache financially with property taxes and mortgage payments. For those who are behind their payments, one of the homeowner’s options is to have their houses rented temporarily to help cover the costs. Using Airbnb to rent homes as a temporary let is one of the best ways to earn income to pay the mortgage.

As long as you don’t mind the thought of strangers invading your home and make cruel remarks about its quirks and features, then renting your home temporarily can be tempting. With Airbnb, you can choose to rent out your entire house or a single room. It is the best way to earn cash. However, it needs to be approached with caution. Aside from the fact that you’ll be entrusting your home to strangers, it has ramifications in your investment particularly if you still have a mortgage in your house. You also need to inform your lender, home insurer, and taxman of your plans.

Legal Considerations

Anyone can create an Airbnb account and set their houses up for temporary let and its unlikely that Airbnb hosting can put the homeowner in breach of contract. But that doesn’t mean that there aren’t any legal ramifications that an Airbnb host needs to think about. Some cities are pushing back against short term rental platforms such as Airbnb. They may incur potential violations of homeowner policies or can even affect the homeowner’s insurance agency. Some cities may require licenses to operate Airbnb.

All the homeowner has to do is to practice due diligence to ensure that no legal considerations have been missed.

  • Check if there are no short-term occupancy rules or licensing requirements in the city.
  • Certain localities might require a business license and will need to pay taxes for the income owned. They might have to pay a transient occupancy tax which is the same tax that applies to hotels.
  • Most condominiums have rules against short-term rentals as there is a concern of security when different people show up every night.
  • Expect that there will also be complaints and the board may bring up actions against renters putting up Airbnb and likely have to pay fines.

Insurance and Liability

Although Airbnb does offer $1 million Host Protection insurance but never rely on this insurance alone. Airbnb’s insurance is not a substitute for homeowner’s renter’s insurance and it does not protect against theft or personal liability.

Airbnb offers liability insurance for US hosts for up to $1 million per occurrence and is secondary to any other insurance such as landlord’s insurance and homeowner’s policy that might cover the accident. Like most policies, Airbnb has insurance conditions and imitations, thus read the fine print of the policy thoroughly.

Airbnb also provides an option for refundable security deposit which should be recommended for each guest renting out the place. This is essential for guests to take extra caution for renting out the place and they would likely cause any destructive behaviors.


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