A precautionary tale for vacation rental operators post COVID-19

As a professional Airbnb manager, I’m a member of a lot of Facebook groups filled with other hosts and managers.

Some of them are very helpful and offer a wealth of knowledge; some of them I’m a member of more for the entertainment factor that anything else.

But I’ve been seeing a LOT of hosts lately making comments that concern me. They’re all along the same vein, but here is a paraphrased quote of one of them (I removed all the swearing and typos) :

“I didn’t pay my rent on my Airbnb unit in March, April or May. I’m not planning on paying at all until August at least. That’s the earliest the complex would be able to evict me based on current eviction bans because of the virus. Until then I’m just going to ride the gravy train. Plus the lease isn’t tied to my SSN, so I won’t even have the eviction on my record. Yay, me – I’m so smart!”

Really?

Do people really think this is ok?

There are so many things wrong with this statement. Where do I even start?

The blatant violation of a contractual agreement? The outright stealing? The bragging about said stealing? Comments like this (of which I’ve seen many the last few months) make me physically sick.

Many hosts complain that bad guests are making things difficult for them. But not many of them say anything about how other hosts are also making things difficult for them. If I was a landlord, I sure wouldn’t want to rent to someone who might sublet my place out and then plan on not paying me for 6 months or more!

Many Airbnb hosts jumped on the gravy train when bookings were easy to get, overextending themselves because it was “easy money,” and now they (and everyone they’ve rented or purchased from) are paying the price.

But it’s more than that, too. I’ve seen a consistent trend of Airbnb and other short-term rental hosts proudly exploiting loopholes in the system or even outright violating the rules so that they can operate. They seem to have no regard at all for respecting the rules of the community within which they’re trying to operate.

Thus they operate where they know they’re not allowed, lie to landlords, refuse to pay rent, and all sorts of other illegal or unethical practices.

If this is your business plan, your exit strategy, if you’re even considering doing this or anything like this, let me be clear: you’re not a business person, you’re a con man.

You’re a thief, a common criminal. And you should not be proud of this. You should be ashamed.

That woman entered into a contractual agreement that she is choosing to flagrantly ignore. It’s not even that she doesn’t have the money. She just wants to hold onto it “just in case.” She hasn’t bothered talking to her landlord and working out some sort of deferred payment plan. She’s just giving the middle finger to the person who’s enabled her primary source of income for the last several years.

People, this is not right.

If you want to start a business with Airbnb….make it a business. Make it legitimate and honorable. Do your best to pay your bills and honor your obligations. If you’re unable to do so because of unforeseen circumstances, talk to your creditors. (And yes, a global pandemic that cripples the world economy definitely counts as an unforeseen circumstance.) Be honest with them and tell them what’s going on.

More often than not they’ll be understanding and willing to work with you, as long as you’re upfront with them.

That is the only way to create a business that will survive the long run.

Now I know that if you’re in the situation right now where you have multiple properties and can’t pay the rent or mortgages on many of them, there’s not much that can be done in hindsight to change that, although I’d still recommend you talk to the landlords.

But hopefully this can serve as a precautionary tale for vacation rental operators moving forward.

I know that it can be tempting to just buy, buy, buy (or rent, rent, rent), to expand your empire as quickly as possible and bring in the moolah. But rapid growth like that isn’t healthy. We’ve seen this over and over again throughout history – it’s called an economic bubble, and it always eventually bursts.

I encourage you – I entreat you, I beg you – for your sake as well as all of ours, restrain your growth goals. Don’t gain new properties quicker than you’re able to manage them responsibly. Keep a healthy financial safety net to get you through the unexpected bad times.

There’s no question that COVID-19 threw a nasty and unexpected wrench into vacation rental operators’ plan everywhere. But there’s also no question that if they had been operating their businesses more responsibly and ethically in the first place, a lot of them would be in a much better place than they are now.

Let’s do better next time. Our guests, other hosts, and the landlords or banks who are entrusting their resources to our care deserve it.