As far as ‘disruptive’ startups go, Airbnb has stirred up a tropical storm since its launch in 2008. It is forecast to double its global nightly bookings to 80,000 by the end of the year and is valued at an astounding $25.5 billion. It’s been taken as a sign that the prophesied “sharing economy” has arrived; although, its skyrocket to global infamy certainly hasn’t been a smooth ride. It has caused unsettling disturbances among the hotel-owners and regulators of the world, who are understandably disgruntled at the profit margins that Airbnb is creaming off and the tenuous legal premises of the whole operation.
What’s more, amid the glowing reviews from flushed post-vacation travellers delighted with their bargain accommodation, and satisfied hosts who have successfully earned extra cash from their spare space, a slew of horror stories afflicting both unsuspecting travellers and naive hosts have emerged into the limelight. There are some serious lessons to be learnt from these misfortunes.
Behind Airbnb’s slick marketing, flashy website-and-mobile-friendly user experience, and confident reassurances of a $1 million Host Guarantee, there lies a dubious number of legal stumbling blocks, countless opportunities for things to go wrong, and lots of strange and/or fraudulent people willing to take advantage of others’ blind trust. So while Airbnb may seem like the easiest get-rich-quick scheme out there, anyone considering becoming a host should take heed of these disasters as cautionary tales.
Here are the top 3 Airbnb horror stories which have hit the headlines, and some crucial tips on how to mitigate your chances of ending up in similarly sticky situations.
1) Creepy Vandalism
Among all the trashed apartments and illicit parties, this particular case stands out for the creepy and weird behavior of the invited intruders. A young woman, who goes by the online name of EJ, from San Francisco arrived home in 2011 to find that the guest had spent the week carefully rummaging through her belongings. They’d even gone so far as to smash a hole through the locked closet door, stealing jewellry, a camera, iPod, laptop, external hard drive and personal documents from within. They used her cards and coupons to go on an online shopping spree, left her all her clothes in a wet pile in the middle of the floor, and, despite the summer heat, burnt other belongings including the spare guest sheets in the fireplace.
All the while during their stay, EJ notes that the guest was sending her friendly emails, thanking her for being a great host. EJ wrote on her blog, “It makes me sick to my stomach to think now of these emails.”
It was this case which prompted Airbnb to implement the Host Guarantee program, created with the notion of “protecting the property of hosts from damage by Airbnb guests.” Be sure to read the smallprint however, since this clearly states it will not cover your for the loss or damage of items such as cash and securities, pets, jewelry, collectibles and artwork.
Aside from the horror of finding your Airbnb rental in disarray and ruin, the essential takeaway from this case is to make sure that your insurance plan is robust and to ensure that if it’s your own personal space which you share with guests, that valuable items and personal documents are kept in a locked theft-proof vault. Don’t ever forget that you’re inviting a complete stranger into your home, and be careful to vet guests by way of their online referrals from previous hosts. If your gut instinct is telling you that the guest may be trouble, trust it.
2) Unwanted Squatters
Traditionally squatters take the old-fashioned route and occupy abandoned and vacant properties, but several have turned their attention to Airbnb to target unsuspecting hosts and exploit loopholes in the legal system.
Two brothers took a condo owner in Palm Springs, California for a ride when they booked her rental for 44 days and stopped paying after day 30. The host, Tschogel, threatened to shut off the electricity, but they informed her this would cause them to lose $1,000 to $7,000 of income per day if they were unable to work. They also ignored Airbnb’s offer to host them free in a hotel nearby for 30 days. They threatened to sue Tschogel for “blackmail and damages caused by [her] negligence and malicious misconduct… as well as medical bills for my brother’s hospital visit after he got sick here drinking unfiltered tap water.”
These squatters knew they were protected under California tenant law, which “requires a landlord to pay a relocation fee to tenants they wish to evict.” But after two months of arduous battling and negotiation, the squatters left quietly under cover of night. Probably the mounting media attention, and the presence of a private investigation service hired by Airbnb put them off their plan. Thankfully they hadn’t inflicted any damage upon Tschogel’s property, although she reported feeling violated, and emotionally and mentally drained by the experience.
So how do you avoid being targeted by unscrupulous scammers? Firstly, carefully check your state law, but in many states if someone rents for more than 30 days then they are officially considered a month-to-month tenant and are granted similar rights to a tenant. This means you may have no recourse but to serve them an eviction notice or pursue a Cash for Keys agreement with them to hasten their departure.
If you want to do a long-term rental via Airbnb, consider carrying out a credit card check on them and verify their identity on social media. Make sure they have lots of positive reviews from other hosts on Airbnb. Then allow them to stay for a shorter-term period to ensure they are the kind of tenant you would like, and extend their stay via written communications which clearly state the termination date of your mutual agreement. Never make a deal or accept payments outside of the Airbnb platform.
3) Healthy And Safety Tragedy
The latest story to break into the media is a painful family tragedy which the journalist, Zak Stone, has bravely shared via Medium. Having written positively about startups and entrepreneurship trends such as Airbnb for publications like Fast Company and Good in the past, he happily arranged a family trip to stay at an Airbnb lodging in Texas. But his father lost his life in a horrific accident, where the branch a swing was hanging from broke and fell on his head.
This highlights a huge grey area about liability in the case of an emergency, and the lack of stringent health and safety measures to protect either guests or hosts. Investigation revealed that the tree had been dead for two years, rendering the swing perilously unsafe. As the writer and victim points out, “Hotel rooms are standardized for safety, monitored by staff, and often quite expensive. Airbnb rentals, on the other hand, are unregulated, eclectic, and affordable, and the safety standards are only slowly materializing.” There are limited health and safety guidelines on the website, and “nothing is done to make sure hosts actually comply with [them].”
As a host, you doubtless want to avoid the guilt and liability of a serious accident happening in your rental, especially if it was avoidable by taking safety measures. Again, make sure you have a robust home insurance policy which includes commercial activity. Furthermore, ensure you do your due diligence and carefully follow Airbnb’s guidelines on Responsible Hosting and Home Safety. This includes basic things like providing a first aid kit and a fire extinguisher, checking your smoke alarm and carbon monoxide detectors are functioning, ensuring the fire escape route is clearly marked out, and providing the numbers of the local hospital and emergency services. Make sure there aren’t any exposed wires, the ventilation is working, and the air conditioners and heaters are fully functional. Establish safe occupancy limits and don’t allow more people to over the limit at any one time.
Know The Risks of Airbnb
We’re not trying to put you off the idea entirely, but when you’re making a business out of your spare room or sofa bed, however small an operation it is, you should be aware that you will carry liability. You should consider those worst case scenarios and what-ifs, because you never know how the dice will land. Airbnb does its best to make hosts and guests feel safe, however if your closely read the terms and conditions, as Ron Lieber points out in his article “Home Sharing? Don’t Ignore Liability” published in the New York Times, Airbnb is “crystal clear” in its assertion that they are “not responsible for and disclaims any and all liability related to any and all listings and accommodation”. Don’t expect Airbnb to rush to your rescue.
If you feel like the risk is too great, there are other ways to make money from property. You’re not just limited to pursuing a traditional lease agreement by renting out to tenants. Check out this helpful list of the Top 100 Ways to Make Money from Real Estate.