Howdy to all you happy hosts and rental rock stars. Yes, even with the pandemic in effect you are all still rock stars! Now, this is the part where I usually say to you "hope your April was full of booked nights and 5-star reviews" but right now just getting through it is good enough. I hope you are staying safe out there. In an attempt to provide hosts with information this month, we are going to look at the two big Airbnb controversies and try to understand what the CARES act says about mortgages. Not the most exciting topics, but I will try to keep it short and to the point. Good luck out there! Let's take a look back at the April Host Wrap-Up!
Airbnb's New Cleaning Policy
Airbnb has announced a new cleaning policy. The policy is essentially a 24-72 hour down period between guests and a set of cleaning procedures outlined by CDC doctors that hosts can become certified in. Nothing I have read from Airbnb says any of this will be mandatory, but the certified hosts will have it noted on their listings. Guests will be able to search for properties that are doing these new cleaning procedures and it seems these properties will get a bump in the rankings. How much getting this certification will actually affect bookings is a guessing game right now. You can read about the policy in Airbnb's own words in this blog post.
I am seeing a lot of backlash against this policy. But I think we need to see it for what it is. It is a publicity move to make guests feel more comfortable with short term rentals. When people start traveling there is going to be a battle in consumer confidence between traditional hotels and short term rentals. It looks like Airbnb is making the first move to win this battle. If the average traveler believes that short term rentals are safer and cleaner than a hotel, there could be a massive boom for hosts. But if stories of people contracting COVID from staying at a short term rental start entering the news, this downturn for hosts could last way longer. So although the specifics of the policy might not be to your liking, hosts need to see it for what it is; a move to win the battle for consumer confidence. Us hosts need to do our part to make sure that guests feel like STR's are their best and safest travel accommodations.
Airbnb Money to Host
North Georgia Wilderness Wonderland
What the Cares act says about mortgages
The CARES act has been in effect for about a month now and all the headlines are going to the PPP program and the states messed up unemployment systems. But for real estate investors (which hosts very much are) there didn't appear to be much for us in the bill. But there was one important clause. Federally backed loans are required to offer a 180-day deferment on mortgages without plenty, fees, interest charges, or negative impacts to your credit. But what the bill does not address is what happens at the end of the deferment period. Will it have to be paid back in one lump sum? Tacked on to the end of the mortgage? Spread out over a few years with an increased mortgage? No one, not even the banks, knows how they are going to handle this. I don't know your situation, so you need to do what's best for you, but I would look very hard at taking advantage of this deferment as a means of holding on to cash. Just make sure you do two things. First, check that your loan is federally backed otherwise they are not required to do a deferment and doing one could destroy your credit. Second, hold on to those mortgage payments until we know if they will have to pay a lump payment. For more information on what the bill says please check out this very help write up.
Question of the Month
Rental hosts rarely receive the opportunity to see how other hosts operate. Which makes it difficult to learn and improve. The solution? Every month I ask a question so we can all learn from each other. Let's take a look at last month's question:
- 42% - Pretty good all things considered.
- 43% - Ok, it could be better.
- 15% - Terrible. A piss poor job.
Honestly, this was a lot more tempered than I thought it would be. If you look online there seems to be a lot of anger and venom being thrown at Airbnb by hosts. But it seems like that could be coming mostly from a loud minority of hosts. Or maybe people were hopeful those payments would live up to the hype. Personally I am still in the "Ok, it could be better" but I could see myself going either way from here depending on if they can win back the guests or not. Because in the end, the professional hosts will go wherever the guests are.
For this months question, I want to know about the Airbnb payouts: