Over 40m people carry student debt, so what are the practical impacts of forgiving this debt? How will student loan forgiveness affect the real estate market?

How Will Student Loan Forgiveness Affect the Real Estate Market?

Student loan forgiveness isn’t just an idealistic concept anymore — it’s becoming a reality for millions of Americans. 

Soon, applications will open to forgive as much as $20,000 of student debt per borrower. It’s a bold plan, and one that’s inspired much speculation on how it will impact the broader economy. 

Homeowners, especially property investors, are certainly watching. Over 40 million people carry student debt, second only to mortgage debt. What are the practical impacts of changing so many people’s financial standing in this way — and how will it affect the housing market? 

Some homeowners might be eagerly awaiting a rush of newly debt-free buyers, while others might see it as an unjustifiable cost, not worth its potential benefits to the economy. 

It’s a complex question, but let’s try to unpack it. How are student loan forgiveness and the housing market related? 

Currently, the Biden administration plans to forgive up to $10,000 of student debt per borrower, and up to $20,000 for Pell Grant recipients. Loan forgiveness will be available to borrowers whose yearly income is under $125,000. 

In the United States, most people with student debt owe around $25,000. By various estimates, forgiveness of $10,000 would completely erase the debt of 33% to 50% of these borrowers. 

And there’s more to the plan than just canceling debt. Thanks to new, income-based repayment standards, those with loans remaining after forgiveness will see their monthly payment cut in half.

Low-income households stand to benefit the most from student loan forgiveness. Nearly all Pell Grant recipients come from households earning under $60,000, and are significantly more likely to be Black, Hispanic or Indigenous. 

Together, these measures have the power to free up a significant amount of discretionary income — especially for Millennials, Gen Z, and people of color, who made up the largest proportion of Pell Grant recipients.

How debt, forgiveness, and the housing market are related

Two things are necessary to enter the housing market — an available down payment, and eligibility for a mortgage. 

Student loan debt can affect both qualifiers. In fact, student debt is one of the most commonly cited factors that hold people back from buying their first home. 

Monthly loan payments can eat up disposable income, making it harder to save up for a down payment. Lenders also consider applicants’ debt burden when considering them for a mortgage, with large loans seriously holding back what they’re able to qualify for. 

Eliminating or reducing that debt load could allow borrowers to save more money for a downpayment, as well as increase their purchasing power and get approved for a larger mortgage. 

In theory, that could release an influx of eager buyers into the housing market. That increased demand could drive home prices higher, creating what’s known as a seller’s market. 

Imminent housing market changes — what to expect? 

But in reality, of course, things are rarely so simple. In practice, it’s unclear if Biden’s plan would affect the housing market this dramatically — or indeed, create a noticeable effect at all. 

First of all, demand for housing already outstrips supply in much of the United States. While of course, markets vary by region, most homeowners are not struggling to sell. 

This reality is reflected in the rising problem of housing unaffordability in the US, with over half of Americans considering it a major problem in their community. 

Debt cancellation also doesn’t realistically translate into the immediate ability to buy a home — at least not for the majority of borrowers. 

Even in a best–case scenario, would-be homeowners would need time to save up a down payment with the newly freed-up funds. That means it would take at least 12 to 18 months before this new influx of buyers hit the market.  

In many cases, student loan forgiveness won’t even result in extra spending money. Most loan repayments have already been frozen for the last two years. Borrowers have likely allocated those funds elsewhere, such as to keep pace with rising gas and grocery prices. 

Nor is student debt the only factor keeping new buyers out for the market. For example, mortgage interest rates are sky-high right now — recently hitting their highest since the 2008 financial crisis.

Any changes in the housing market would take a while to become apparent after loan forgiveness is introduced. While there’s the potential to unleash major demand, in practice these effects could be limited. 

But overall, student loan forgiveness should be seen as a positive for homeowners. 

What does look fairly certain is that loan forgiveness will not outright harm the housing market, especially in active urban areas. There are already plenty of buyers looking for homes, and forgiveness would likely exaggerate forces already at play, rather than transforming the real estate market entirely. 

Depending on your region, owners may opt for a ‘wait and see’ approach, anticipating an influx of demand from newly debt-free buyers. In the meantime, renting out your home is a savvy move in many markets, allowing owners to generate passive income while their property rises in value. For a detailed outline of the factors to consider when determining whether to rent or sell, check out our e-book.

If you’re interested in renting out your home, but intimidated by the time and effort that goes into being a landlord, check out Belong. We’re a modern alternative to property management companies, making renting magical for homeowners and residents. 

Curious to see if your home qualifies? Reach out and schedule a consultation today.

Learn how to prepare your home for an inspection from potential tenants, from access to cleaning and clearing furniture.

Prepare For Your Inspection

To set you on the right track from day one, Belong inspectors will make sure your rental home is safe, comfortable and ready for occupancy. This means they will need access to all areas of the home. If the home is currently occupied, ensure it is ready for inspection and any residents are aware of what is taking place. Any pets should also be secured. If the home is vacant, it's a good idea to remove any furniture or personal items, or at least ensure there there is nothing preventing access. 

In order to accurately test utilities throughout the home, please ensure that water, gas and electricity are up and running during inspection. 

Homes under construction or DYI projects make it difficult for our inspectors to understand the current state of the home, we want to make sure that your home is ready to be loved and taken care of by your upcoming residents.

Please ensure that a full set of keys is provided to us either prior to or at the time of inspection. Your homeowner growth associate can ensure that the keys are kept secure at all times. 

Putting your home on the rental market? Learn how to prepare your home for an inspection from potential tenants, from access to cleaning and clearing furniture.

11 rental regulations property managers must abide by

Are Property Management Companies Regulated? 11 Renting Regulations to Know

Renting out your property is so much more than a business transaction. You’re sharing a place you care about, and you want to see it protected. But you’re also providing your residents with something very important — a home.

That’s why property management, and landlordship, is so tightly regulated in the United States. These rules ensure that residents get a safe, peaceful place to live, and that the home you’ve invested in is well taken care of. 

If you’ve ever wondered, “Are property management companies regulated?”, the short answer is yes. Property management companies (and self-managing property managers) are subject to laws governing both landlords as well as all businesses operating in the United States. Regulations vary a lot from state to state, but here are some of the most important federal regulations to know. 

1. Prospective residents are protected from discrimination

Passed in 1968, the Fair Housing Act prevents choosing — or denying — residents the opportunity to rent a home on the basis of: 

Hopefully, this is common sense for most property managers in 2022. But it’s still one of the most important rental regulations in the United States. Belong ensures all residents are given a fair shot at a home by approving qualified renters on a first-come, first-served basis. 

2. Residents must be informed if they were rejected due to their credit history 

Access to credit information is important to help you find reliable, financially secure residents. But this sensitive information should ideally be used with applicants’ full, informed consent. 

Under the Fair Credit Reporting Act (1970), landlords do not technically need tenants’ permission to access their credit reports and scores. However, getting permission is more considerate, and generally appreciated by renters. Regardless, property managers will need to let residents know if they were rejected for tenancy because of their credit history. Belong communicates directly with prospective residents on the homeowner's behalf, so homeowners can rest assured that all regulated communications are happening automatically. 

3. Service animals must be allowed in rental homes 

When it comes to the question, “Are property management companies regulated?”, the answer is straightforward when it comes to allowing animals in a property. You don’t need to allow pets in your rental home. But according to the Americans With Disabilities Act (1990), you do need to allow service animals, like guide dogs.

As long as the animals comply with local laws like licensing and vaccinations, property managers cannot preclude residents who rely on these important furry friends. 

4. Property managers cannot restrict children in a home

As part of the Fair Housing Act, managers cannot discriminate against applicants with children when looking for residents to live in your rental home. 

Not only are you unable to limit families with children from renting your home, but you also can’t keep certain rooms off limits and restrict children to specific areas of your rental. So, if you have any valuable or breakable items on the property, you’ll likely want to put those in storage before residents move in.

5. Property managers can choose renters of their own free will 

As long as they aren’t discriminating against protected groups, property managers can choose residents at their own discretion. That includes following whatever criteria they like, such as employment history, rental history, or income level. Typically, as long as your standards are reasonable and grounded in reducing financial risk, you don’t need to worry about discrimination.

Belong works hard to find quality residents that meet income and credit thresholds, then takes care of those residents from day one, ensuring they treat your property like home. 

6. Property managers may charge a security deposit of their choosing

While this is not a federal regulation, property managers are allowed to charge a security deposit in every state. Belong's required security deposits vary by market. 

7. A legal eviction process is required to remove a renter

No matter how late on rent a resident is, or how much they’ve damaged your property, you can’t simply change the locks or tell them to vacate the home. This is considered “taking the law into your own hands,” rather than going through proper, legal channels. 

Instead, you will need to follow your own state’s established processes for eviction. Any experienced and trustworthy property manager will agree. If the need to evict a resident from a home managed by Belong, we will work with you to make it as painless and fair of a process as possible. 

8. The home must be in safe, clean, livable condition

When asking the question, “Are property management companies regulated?”, regulations around the condition of a home should really be common sense. Your residents are looking for an enjoyable living space, and as a landlord or property manager, it’s your job to provide that. 

Belong makes this easy for homeowners, because all Belong homes are maintained by full-time, in-house Belong Pros that are on-call 24/7 to handle maintenance emergencies and ensure your residents are well taken care of. 

9. Tenants have the “right to quiet enjoyment”

Your property manager will likely need to visit your rental home on occasion. But they’ll need to give your residents plenty of notice, and they can’t show up without a good reason. 

10. Property management companies and landlords must be properly licensed 

Just like any other business, property managers need to comply with their state and region’s licensing regulations. In some states, that could mean a property management license, and in others, a real estate broker’s license. 

11. Property management companies must follow state and federal business regulations

Every business in the United States needs to follow certain rules to operate ethically — and that includes property management companies. A few of the most important are paying your taxes, complying with labor laws, and registering for an Employer Identification Number (EIN). 

We’ve now explored the question, “Are property management companies regulated?” and walked through 11 regulations. These legalities protect both you and the residents of your rental home. But for homeowners and managers who want to go above and beyond, these regulations should be considered the bare minimum. 

Renting out your home is all about making sure residents feel welcome, supported, and comfortable in their living space. Often, homeowners who excel in this area will be rewarded with reliable, committed renters who take care of the home as if it was their own. 

The property management companies of yesterday were too often inefficient and not human-focused, viewing renting as nothing more than a financial transaction. 

Today, modern alternatives to the property management company have emerged. These platforms, like Belong, leverage technology and put service first, creating a better experience for both owners and residents. 

Are you a homeowner looking for a better way to manage your property? Learn more about Belong and find out if your home qualifies today.

Property managers are subject to laws governing landlords and businesses operating in the US. Here are 11 regulations property managers must abide by

Are Property Management Companies Regulated? 11 Regulations to Know

Miami is one of the fastest growing rental and real estate markets in the country. Learn more about investing in and managing a rental property in Miami, Florida.

The Local Investors’ Guide to Miami Real Estate

Smart people have long seen the enchanting possibilities of Miami — that’s even how it got its beloved moniker of Magic City. The tropical climate, vibrant neighborhoods and culture has made it one of the fastest growing rental and real estate markets in the country. 

If you own a single-family home or condo in Miami, or are considering a rental investment in the city, this guide will direct you to tips on everything from school districts to property taxes and rental management for Miami. 

Why Miami is a great place for rental investors with single-family homes

Demand for single-family rental homes is soaring across the country, with Americans of all generations wanting larger homes with outdoor spaces. While rents have grown significantly for single-family homes in all markets, CNBC reported that Miami homeowners have been the biggest winners, with single-family rents soaring over 36% (up from 2% the previous year). 

Housing affordability can be an issue when breaking into the Miami housing market as an investor. RealtyHop’s affordability index ranks Miami as the least affordable housing market in April 2023, beating out LA and New York. Affordability is calculated by the average earnings of Miami residents, estimating that potential buyers need to spend 80.46% of their monthly income on the cost of homeownership. 

It's great news for people who own a rental home in Miami or have recently inherited a house in Miami. Because even as one of the least affordable rental markets, long-term renting is a better option than trying to break into the buyer’s market for many residents. This is keeping demand buoyant for rentals and should for some time. 

Best school districts in Miami to own rental property

Single-family homes attract parents. If you’re interested in investing in Miami real estate, you’ll want to understand the role school districts play in how potential residents will evaluate your rental property.

Miami is home to the fourth largest school district in the country: Miami-Dade County Public Schools. The school district your home is located in can have a real impact on how potential residents value your property, impacting your pricing and return on investment. 

If you’re researching neighborhoods, check out our list of the best school districts in Miami, or check out sites like Niche and GreatSchools to do your homework on cities such as Orlando and Tampa. 

Read More: Best Miami School Districts To Own Rental Property

We’ve already established that the Miami rental market is red-hot, but how much rent is too much to ask? How do you price a Miami rental and optimize long-term rental income when the market has gone a bit mad? With realistic, real-time rent valuations. 

The simple fact is that the rental market in Miami isn’t the same market of years past. Property values have changed too much, we’re all playing a different game now. Yet, it seems this is news to the property management industry, who are still using a handful of comps to price Miami homes in this complex rental market.

Belong addresses these rapid changes by taking a modern approach to pricing homes on the rental market. In fact, Belong has ditched the property management model to offer a completely new approach to the rental market.

When helping homeowners in Miami, Belong uses technology to blend live market data with an all-important metric: real demand for each home. We determine the right price for your home that will maximize rental income and keep vacancies low, long-term. And because we extend our services to renters as part of our community, we attract the best of the best to place in your rental property. Learn more about real-time rental valuations for Miami in this article. 

Read More: The Realistic Way To Price a Miami Rental Home When The Market is Mad 

How much property tax will I pay in Florida?

Property taxes in Miami are collected by the Tax Collector's Public Service Office for Miami-Dade County. While the tax will vary per property, the average property tax rate for Florida is 0.89% (accurate as of August 2022). Compared to other states, this places Florida around the middle-range, ranked 23 out of 50 for the lowest property tax rate.

Who are the best property management companies in Miami?

The best way to ensure your investment home is well-kept and profitable is to find the best company to help you manage it. But when comparing the best property management companies across Florida, you’ll be looking at a handful of differences between them all. Things like how much they charge in management fees and how often you are going to get slogged for more (if they even tell you!). 

With Belong, there’s no comparison. Because Belong isn’t a property management company, it’s a completely unique experience that is humanizing the rental market. 

Belong does things differently in Miami, by offering owners of rental homes:

Guaranteed Rent: Receive your rent on time, every month, regardless of when it’s paid by residents. 

24/7 Concierge Support: Both homeowners and residents have access to real-time support, going beyond emergency maintenance requests.

Transparent fees: No hidden costs like setup fees or lease renewal charges.

Modern-day marketing: Virtual tours and video marketing is included in listings.

User-friendly app: Belong's app provides convenient access to documentation, cash flow insights, and financial and insurance solutions. 

Long-term residents: Belong takes a personalized approach to match the right people, so they stay longer and feel at home.

Innovative financial solutions: Homeowners can manage cash flow effectively, even splitting the cost of maintenance and placement fees.

Eviction protection: Owners are shielded from legal costs if we ever place the wrong people

Extensive vendor network: Belong connects homeowners with a vetted network of over 10,000 professionals for repairs and renovations.

Comprehensive insurance solutions: Belong offers insurance options that protect homeowners, their properties, and residents.

Market-driven insights: Belong utilizes market data and real-time interest to maximize the value of your home.

Even though Belong topped the list (you can see the rankings here) when we compared Miami’s top-ranked property managers, it became clear we were comparing apples with oranges. 

Read More: Why Florida's Top-Rated Property Managers Are More 80s Than Miami Vice

As a land of sunshine, high demand and low taxes, Florida is an attractive state to own a rental home. If you own a home in Miami, now is the time to find out if you’re eligible to join the Belong residential network. We specialize in single-family homes and condos, helping individual homeowners to achieve their financial goals in the rental market. 

Here is a snapshot of what Florida homeowners are saying about Belong…

Great personal experience with Belong. They treat you like people versus other agencies that are focused on numbers. I recommend Belong 110%” - SBF

Wonderful experience with Belong Property management. They are taking wonderful care of my tenants. The level of professionalism they have shown is impressive, I will continue working with them as long as I have properties.” - Thalina V

I contracted with Belong to do construction and paint work at Curaleaf. Their price, quality, and timing was on point. Great people to work with!” - Danielle G

Think your Florida home belongs with us? Check out one of our local homeowner pages below to see if you qualify:

To speak to someone about listing your rental home, you can also call 786-628-0600 (English) or 786-786-1073 (Español).  

Before buying a home with an HOA, learn the HOA red flags to avoid.

HOA Red Flags to Lookout for Before Purchasing a Home

If you purchase a home in a community or building with a homeowner’s association (HOA) and intend to rent out that property, you must evaluate the HOA to understand if they will be supportive. A homeowners association or HOA is responsible for managing a community or building. Generally, HOAs are led by a board of directors, and the association’s members are residents of the community or building.

While HOAs can be a vital part of a thriving community, a poorly run HOA can cause headaches, fines, additional costs, or even require a homeowner to engage in legal action. Several things may indicate issues or prompt future consideration if you purchase a home with an HOA. 

HOA reserve funds are set aside for unexpected costs or maintenance. The HOA budget and this reserve are comprised of member fees. If an HOA does not have a healthy reserve in its budget, it could indicate improper budgeting or that its expenses exceed its member dues.

If there is a limited reserve fund and unexpected costs arise, members of the HOA could face a special assessment. In the case of a special assessment, the HOA would require homeowners to pay an additional fee on top of current monthly or annual payments to cover the unexpected cost. 

To better understand the HOA’s financial situation, consider asking if they have any renovations planned in the coming months or years. Asking this question can help you assess their approach to large maintenance projects. Do they plan for major repairs or renovations, or do they rely on special assessments rather than a well-planned budget? 

If you are considering buying a rental property inside a larger building, it’s wise to inquire about the roof and other major systems like HVAC or a boiler. If the building needs to make a significant replacement or repair, you could be facing a special assessment if their reserve funds won’t cover the entire cost. 

Community guidelines can be a helpful way to ensure that the neighborhood or building remains in good condition and is well maintained. However, unreasonable or excessive rules may indicate a likelihood of issues or conflict in the future. Well-intentioned maintenance rules help to keep a homogenous look and feel within a community. However, these guidelines can sometimes be outdated or fail to account for new trends and approaches.

For example, does your HOA entirely prohibits the use of xeriscaping instead of providing helpful guidelines on how you can execute it? As a homeowner who plans to rent the property, consider how you might expect the residents of your home to maintain the landscaping. If xeriscaping is part of your maintenance plans for a rental property, you’ll need to review the HOA guidelines closely. 

You will also want to review maintenance rules and potential consequences or fines carefully. Keep in mind that you will ultimately be responsible for those fines. You may also consider including HOA guidelines in your future lease agreement. 

Amending HOA rules is difficult or prohibitive 

The purpose of an HOA is to protect the best interests of the community it serves. As with any organization, the governing documents should be regularly reviewed and updated. It’s prudent to carefully review HOA documents, looking for the process by which an association member can amend rules. 

If a policy change requires a vote with 75% support, you may be looking at an HOA that is unwilling to change to adopt new guidelines. For most associations, a majority vote is an excellent way to gauge the communities desires and respond to the evolving needs. 

You will also need to watch out for issues with quorum. Quorum will be defined in the HOA documents and may require that a certain number of people vote among the total number of possible voters. Quorum policies can quickly complicate or make rule changes more difficult. 

While it’s not uncommon to see consequences or fines for the rules outlined by an HOA, it’s wise to keep an eye out for escalating penalties. These types of fines double or increase significantly every time they are issued. For example, the first maintenance fine might be $25, the next might be $50, and the third could be $100. 

Escalating fines could indicate that residents are apathetic about penalties issued by the HOA. The HOA may feel it’s necessary to increase the fines to gain the attention of residents. In this case, closely inspect the neighborhood or building. Does the community seem well-maintained? 

Escalating fines, especially if they are excessive, could also suggest that the HOA is a bit overzealous. Are fines issued for significant violations, or do they seem petty? If it looks like the HOA has a nit-picky approach to penalties, you may spend excessive time and money addressing violations. 

Rules limiting the number or percentage of property permitted to be rentals 

In some communities or buildings, HOAs have implemented amendments that restrict leasing. These changes are designed to improve the community’s financial strength but can impact how you move forward. 

If they permit you to lease the home you are planning to purchase, you may be at an advantage since there will be limited competition in the immediate area. However, the HOA may not be able to guarantee you will be permitted to lease the property, or they may have already reached their leasing percentage limit.

Read More: How To Rent Your Home and Stay HOA-Board Approved

If the HOA is currently facing a lawsuit, you may want to investigate further before moving forward with your purchase. Litigation is expensive, so most people will not proceed with a case unless they think they have good reasons. Carefully research any pending litigation to understand the scope and origin of the issue. For example, a slip and fall claim may not be alarming, but keep an eye out for anything that may be more substantial.

Suppose there is pending litigation against the HOA. In that case, insurance will likely cover the costs associated with legal proceedings. Still, you can expect that the HOA’s insurance will increase the following year and that the HOA will extend those costs to association members. 

Once you know how to identify concerning trends, you’ll need to complete a careful assessment of any potential HOA. You can learn more about the HOA and gather the information to help decide if the association will support your investment property in their community. 

Financial documents can provide significant insight into how an HOA approaches its responsibilities. As discussed, you want to look for reserve funds that equal to or exceed 10% of the monthly/annual dues. You can also verify that reserve funds are allocated in the budget to cover any overages. 

HOA financial documents should also indicate the number of units or homes delinquent on dues. If there is a significant number of delinquent association members, it may be difficult for the HOA to meet its financial obligations, and the HOA may pass on those additional costs to homeowners. 

Similarly, you’ll want to look for a record of how many units or homes in the community are currently in foreclosure. If many residents default on their loans, they are unlikely to have paid their association dues. Further, this may indicate more significant issues in the community. 

Finally, you should verify that the HOA has fidelity coverage which protects them from theft or embezzlement. 

In recent years many HOAs have begun to record their meetings, and viewing or listening to these recordings can give you significant insights into the association’s state. If you see the same issues coming up monthly, you can expect those same things to be a problem if you purchase in the community or building. You can also look for mentions of recent fires or other insurance claims. If the association recently made an insurance claim, you can expect their insurance costs to go up the following year.

Chat with neighbors or building residents

Don’t be afraid to talk with people you see in the neighborhood or building. Most people are happy to share their experiences. If they negatively perceive the HOA or have had bad experiences, they will likely share it openly. In contrast, you may find that neighbors speak positively about the community. 

A successful real estate investment strategy requires the right support. Once you've identified the ideal property with a supportive HOA, consider building a team of experts to support your next steps. Belong offers homeowners an alternative to traditional property management. We’re not a property management company but a complete residential network and service that goes above and beyond for homeowners and their residents. 

With guidance from our team of real estate and maintenance professionals, your home will always attract the best price and the best residents. With Belong, you can expect fewer vacancies, good people who care for your home, and profitable rental income. 

Learn more about Belong and see its role in your real estate investment strategy.

A poorly run HOA can cause headaches for homeowners, especially rental property investors. Before buying a home with an HOA, learn the HOA red flags to avoid.

Home Owner Association Red Flags to Lookout for Before Buying

Which will be more profitable for your home? We cover the pros and cons to weigh up your options

Short-Term Rental vs. Long-Term Rental: The Pros and Cons

Short-term vs long-term rental, airbnb vs property management — if you’re looking to rent out your home, this is one of the first decisions you will need to make. Is it more profitable to rent it to a single person/family or can you optimize your rental income by listing it as a short-term vacation rental on platforms like Airbnb, VRBO and HomeAway?

Ultimately it will depend on your personal circumstances, including how much time, money and energy you have to invest in managing the home. To help you weigh up your options, we dive into the pros and cons of both short-term and long-term rental for your home. 

The pros and cons of short-term vacation rentals

On the surface, the economics of renting your home as a vacation rental look promising. With rates charged per-night and huge fluctuations during holiday seasons, in the right location a vacation rental can be lucrative. It also allows you to access the home whenever you want it, so if you use the home throughout the year, this is a great option (provided you don’t mind the wear-and-tear on your furniture).

On the flipside, the payday that can come from a popular vacation rental becomes a lot less attractive when you factor in the number of hours you’ll spend working as a frontline customer service agent for your own property — especially when many Airbnb hosts are reporting a big increase in vacancy rates. 

Flexibility — you can rent out the home as little or as much as you like

You won’t need to put your furniture in storage if you are leaving temporarily

The per-night/per-week rates are higher than a flat monthly rental rate and can therefore be more profitable if the home is in a tourist hotspot and booked regularly 

There are several online platforms that are simple to list and manage bookings yourself

The property will be cleaned after every stay to help maintain the condition

You may be able to claim some costs on tax — such as fees, maintenance and cleaning

There is no guarantee of regular income as bookings will be inconsistent and you’ll be subject to last-minute cancellations

Many Airbnb hosts are reporting an increase in vacancy rates and that the work involved is making the option less profitable/unprofitable

You will need to handle all of your guest inquiries and demands — most likely on weekends, evenings and during holiday periods

You are removing housing options from your neighborhood and contributing to the rental price squeeze that is impacting families that are priced out of home ownership

The property will need to fully furnished and you will be responsible for the upkeep and replenishment of all amenities

You will need to hire a professional cleaner or be prepared for a lot of hard work between guests, cleaning the home throughout and laundering all bed linen and towels

You risk your home being destroyed during parties and a high turnover of guests (they’re technically banned, but there’s little you or Airbnb can do to stop them)

If guests are unsatisfied with the home or service, you could be forced to give a full refund within 24 hours, in accordance with Airbnb policies

There are ever-changing local regulations to comply with — some areas like LA have even outlawed short-term rentals for investment properties

You may need to collect and pay additional taxes or fees to have a legal short-term rental under local ordinances, which are becoming increasingly common 

You will have additional costs such as paying for all electricity, water, internet access etc

Neighbors don’t like short-term rentals, so you risk souring any relationships if you intend to come back to the home (and you could be in violation of your HOA agreement)

Management fees are high — if you don’t want to handle the workload yourself, you will pay up to 20-50% of total income generated for a company to manage a short-term rental



Airbnb guest coverage doesn't provide the right insurance to protect your home, with short-term rental insurance costing between 10-70% more than a homeowners policy

With rising inflation and property values in recent years, more Americans are feeling locked out of home ownership so they are renting for longer. There has been a sharp increase in rental pricing as a result, meaning the average rental homeowner is receiving drastically more money in rent than previous years. 

This means it’s a great time to hold an investment property and if you don’t intend to use the home during the year, having a long-term lease agreement on your home may be more profitable than a short-term rental, even at a lower per-month rate. 

Predictable income, with less vacancies and one person/family living in your home for 12-months or longer

High demand and attractive rental rates locked in for the lease term

Residents are vetted and screened, helping you to place responsible people in your home who will treat it as their own

With the right management, income can be truly passive, with no need to play customer service representative for holiday-makers

Provides a stable living environment for people who don’t want to, or can’t, buy their own home

Favorable tax breaks and capital gains depreciation

No need to furnish the home or worry about cleaning costs and replacing amenities

No utility costs, as residents will typically pay for these unless it’s included in their rent

Management fees are lower, usually around 8 - 10%

Less local ordinance hoops to jump through

You won’t have access to the home throughout the year as residents will be living there full-time

Short-term vs long-term rental, airbnb vs property management - which will be more profitable for your home? We cover the pros and cons to weigh up your options

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