One big issue that would-be buy-to-letters face is that, until very recently, there was no way to get any real idea – beyond reading blogs like this one – of what the experience of buy-to-let is actually like.
There’s no denying that buy-to-let property is a VERY sizeable investment, and probably not one that anyone would want to make without taking part in some form of trial run beforehand.
While it’s not exactly the same, letting out your home or some space within it using Airbnb is a comparable experience. In this post I thought I’d do a rundown on some of the pros and cons of Airbnb, with a particular focus on how it compares to buy-to-let.
- If you’re nervous about leaving people alone in a property that belongs to you, you can get the ball rolling by letting out a single room.
- Airbnb offers a £600,000 Host Guarantee to cover damage, so there is considerable protection from the risks associated with letting to a stranger.
- There’s serious profit to be had: I found a one bedroom flat in Chelsea listed for £1250 per week, and that’s not even a huge ask by Airbnb standards.
- You maintain a lot of control, as there’s no minimum letting period, and you can take a break from letting – or stop entirely – whenever you want to.
- There are horror stories out there about Airbnb guests using and abusing their hosts’ properties.*
- Airbnb isn’t designed for long-term lets, so it can’t be used as a true alternative to letting out a property.
- Not all insurance companies will cover theft or accidents relating to someone who isn’t listed as a permanent resident, so you need to look closely at your coverage before signing up.
- There are mortgage and tax implications associated with renting out even a single room, so Airbnb isn’t necessarily an easy answer.
* It does have to be said that these experiences are very much the minority.
So, is it worth giving a service like Airbnb a try if you’re thinking about investing in a buy-to-let property? I’d say so. If for no other reason than you’ll make some extra cash from it without any initial investment beyond the time it takes to set up an account.
The experience isn’t exactly the same, in that you’ll probably never think of a buy-to-let property as being ‘yours’ in the same way you do your home, but it’ll definitely give you some firsthand experience of what letting (including sourcing and dealing with tenants) is actually like.
And because you can choose to let a room rather than the entire property, you can get a close-up look at how you find it having a stranger living somewhere you own. Of course, they may be on their best behaviour if they sense you looking over their shoulder…
Even so, I think letting your property in any capacity will give you a better idea of whether or not buy-to-let is something you feel comfortable with. And, with hundreds of thousands of pounds potentially on the line, that can’t be a bad thing.