As you can guess, Airbnb has grown in the last few years, with Boston condo landlords cashing in on this new and growing industry.
As you can imagine, Airbnb can be very lucrative for Boston condo landlords, especially near hospitals in Boston proper and Brookline. A typical Beacon Hill studio condo can fetch $1,800 to $2,000 per month, but with Airbnb they can obtain $300 – $400 peer night.
But before you swtch from long-term apartment rentals to Airbnb, rememeber it comes with some drawbacks. First not all Boston condo associations allow Airbnb which may implement daily feesif not adhere to. It in some rare instances this could lead to lawsuits from the condo assocation.
with that said, Airbnb is here to stay, and brings value in many locations throughout Boston.
Here are some issues to consider
First, is it legal?
Boston Condos: The City of Boston does not currently regulate short-term rentals. Anyone who runs a business in the city is expected to apply for and obtain a business certificate every four years, but most Airbnb hosts do not consider themselves an independent business and therefore, do not register as such with the city. Some residents have urged the Boston City Council to adopt a short-term rental policy, but no action has been taken in that regard to date.
Cambridge Condos: In August of last year, the City of Cambridge passed an ordinance that restricts short-term rentals to units in owner-occupied buildings. A host can rent his or her home and one other unit in the same building, provided that structure has fewer than five units. Hosts are also required to pass a city inspection to ensure the rentals are safe.
Somerville Condos: At least one Alderman in Somerville has proposed an ordinance that would prohibit the short-term rental of an entire unit (e.g., hosts could only list individual bedrooms—not entire apartments), and hosts must live in the same building. Homes that are used exclusively as Airbnbs would be taxed and inspected as though they were hotels. The proposal is still under consideration. It is not clean when, if at all, the ordinance would be approved and go into law.
Second, will insurance protect you?
Let’s assume its legal and your condo assocation allows it. Now you need to determine whether your insurance policy will cover you in the event of damage or injury caused while renting on a short-term basis. Conventional homeowner’s insurance, for instance, does not typically cover you when something goes wrong with a paying guest.
Before renting a unit on Airbnb, you may need to add coverage or buy an entirely different policy – like business insurance – to ensure you’re fully protected. And be careful about renting to anyone with pets. If your policy does not allow long-term renters to have pets, it probably will not cover short-term renters with pets either. If a guest’s dog bites someone and that animal wasn’t listed on your insurance policy, that damage could far outweigh any potential earnings generated through Airbnb..
What impact will it have on other residents?
Even if it’s legal and more profitable to rent your Boston condo on Airbnb, you may want to consider the impact this will have on your other tenants. If people are coming and going at all hours of the night, this could lead to tenant turnover and vacancies – costs that quickly add up for landlords.
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Updated: January 2018