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Diversifying your portfolio with Airbnb

13 June 2019

Airbnb started life in 2008 after one of their founders put an air mattress in their apartment and became a bed and breakfast. Since then, Airbnb has grown into a convenient alternative to booking a hotel, with many talking positively about their experiences using the company. A 2018 YouGov survey found that Airbnb was talked about positively by 69% of respondents.

Airbnb simplifies the process of renting out spare space in a property as if it was a hotel.

Some people use spare space in their property to rent out a room, whereas some people will rent out their entire property for extended periods, as it is believed that renting out property as a tourist space will bring in more money than renting to tenants.

We have outlined some of the pros and cons of using Airbnb below so that you can have an idea of how you could use Airbnb to diversify your property portfolio.


The evening standard reported in 2018 that the average monthly rent cost for a property in London was £1,271, whereas Airbnb estimates that renting out your property in London for 4 guests could give you a higher figure for your property, potentially around £2,000-£3,000.


When you agree to let your property through Airbnb, you are able to set the terms of your rental, such as prices, availability and house rules. By setting your own prices, you can ensure that you won’t be out of pocket by using Airbnb rather than having rental tenants, and by being in control of availability, you can decide when you want to host guests.


Airbnb has a dedicated support team, who are available 24/7 to answer your queries, give you tools and tips and give you access to an online community of people who also rent on Airbnb and can share ideas, answer questions and offer solutions.


When you host through Airbnb, you are provided with an Airbnb Host Guarantee, and Host Protection Insurance, both of which cover claims up to $1 million (*approx. £600,000 as at 25th May 2019). They are given free of charge for each booking and during the guest stay, not necessarily all of the time, see their website for further details on these covers.

All guests are given the option to submit a photo of themselves and must provide a phone number and email address, allowing you as a host to make an informed decision as to whether or not you want to host your guest. Both guests and hosts can also review their experience, allowing you to give feedback which may help other hosts.


Irregular tenants

Whilst there is the possibility than you can generate more income by using Airbnb than you can by renting, a traditional tenant will offer you a regular income from your property rather than ad hoc visitors.


When you have a tenant in your property, they will be the ones responsible for looking after the property, including the cleaning. However, as an Airbnb host, you will need to do a lot of the cleaning work yourself after each guest leaves to make sure that the property is ready for the next tenant. You could hire a cleaner to come in when you need them, but this will eat into your income.


Although Airbnb has covers in place so you don’t suffer a financial loss because of damage caused by your guests, this still leaves you with the stress of having to claim for any damage to your property, or losing valuable or sentimental items. Whilst you could face similar issues if your usual residential tenants cause damage to your property, it is likely that they will repair any damage themselves as they are the ones who live with the consequences of the damage, whilst an Airbnb guest could vacate your premises with no consequences.

Lack of safety

Although there may be reviews for guests, at the time of writing, there are currently no vetting systems in place to look at the background of your guests. You may need to resort to your own research to see what kind of person your guest is, or ask some questions before their arrival to see what they plan on doing on their trip. This however won’t give you any guarantees of what your potential guest may be like once they’re in your property.

Although there is cover provided by AirBnB if you decide to choose to rent your property in this way, there are other insurance covers that you should consider as a property owner.

If you decide to take on cleaning staff to make sure that your property is ready for your next guests, you may need to take out Employers’ Liability insurance. Employers Liability is a legal requirement if you employ a member of staff that isn’t a member of your immediate family.

Whilst AirBnB may provide a guarantee on your home for damage during a guests’ stay, they don’t necessarily provide this cover during the time your property has no bookings, or for any loss of income during the period of time that you are unable to host guests following damage. Speak to the insurance experts at Premierline to talk about Buildings, Contents and Loss of Rent cover, which will ensure you can repair or replace any damage and protect your income for a period of time, (indemnity period), following damage caused by an insured event. When discussing Loss of Rent, if your building is unique or complex, you should consider how long it would take to reinstate the building to its former glory and allow you to earn the same as you did prior to any loss when setting your indemnity period. 

Our insurance experts are trained to assess your needs and find you the right insurance cover that could protect you against unforeseen events. Speak to one of our advisors who will compare insurance quotes from some of the UK’s most trusted insurers.

It is important to make sure that you have the right insurance in place to protect the business that you have built. Every business is different and has its own business insurance needs, which is why we work with some of the UK’s most well-known insurers to ensure that you are getting the right insurance cover for your business.
The information and tools contained in this guide are of a general informational nature and should not be relied upon as being suitable for any specific set of circumstances. We have used reasonable endeavours to ensure the accuracy and completeness of the contents but the information and tools do not constitute professional advice and must not be relied upon as such. To the extent permitted by law, we do not accept responsibility for any loss which may arise from reliance on the information or tools in our Insight Hub.