Apartment Building Owners: Should You Allow Airbnb on Your Property?

If you're a landlord, chances are good that you already know what Airbnb is.

You've either had tenants who secretly listed your property on Airbnb, or you're being openly approached by tenants requesting permission to host. Either way, it can feel unsettling — like you're losing control over what happens inside your own buildings.

So should you allow hosting on Airbnb? Maybe. Here are the important considerations to help you make a more informed choice about putting your apartment building on Airbnb.

Make Sure Airbnb Hosting Is Legal in Your City

First things first: stay on the right side of the law.

Many cities have updated their laws and regulations to clarify what is and isn't allowed when it comes to short-term rentals and homesharing — and yes, there is a difference between the two.

• Short-term rentals are usually defined as a property used solely for renting to guests for less than 30 days at a time.
• Homesharing is usually defined as a resident renting out a portion of their primary residence to guests for any length of time.

Your city may define these differently, but the key distinction is that homesharing is for primary residences while short-term rentals are dedicated spaces rented for under 30 days. Many cities are still writing legislation or only beginning the process of legalizing these arrangements.

Pro tip: Check with your local city hall and find out exactly what's currently allowed, as well as what's on the horizon.

Give Notice to Tenants on the Current Status

Chances are, your current lease agreements strictly prohibit subletting in any form without your express written consent.

If you want to be strict about Airbnb hosting in your building, send a friendly notice reminding tenants of what they signed. Be explicit that it is not okay to list a unit on Airbnb without your approval.

If you're open to letting current residents try hosting, keep them informed of the process. You can send a notice explaining that tenants have asked about the possibility, but that you first want to confirm the legalities with the city and explore any negative implications for the community.

Let tenants know that the safety and comfort of the community is your foremost priority and that you're open to their feedback. Until and unless a tenant has written consent from you, they must abide by the current lease agreement. If hosting isn't currently legal, say so in the notice and invite tenants to report any violators.

The negative implications of running Airbnb out of your building are worth weighing seriously:

• Parking
• Resident safety
• Noise levels
• Liability and property risk
• And more

Understand the Airbnb Economics in Your Market

Not all markets are created equal. Some do far better than others when it comes to demand for Airbnb listings.

If you're not in a core Airbnb market, allowing tenants to list their units may not add much to your bottom line. And if the economics aren't appealing, your tenant hosts are the ones doing all the work for little reward.

Knowing the numbers also helps you have realistic conversations with tenants who may have an overly rosy view of hosting income. In fact, ask any tenant who approaches you to estimate their Airbnb hosting income and show you the math — it's a useful reality check that confirms the plan actually makes economic sense.

Get the Right Insurance

Accidents happen, so protect yourself, your property, and your tenants before issues arise.

You probably already have insurance in place, but it most likely will not cover liability resulting from short-term rentals on your property. Talk to your insurance agent to find out what the extra coverage costs.

If your current provider doesn't offer options you can add to your existing policy, talk to an insurance group that specifically covers this type of business.

Start Slow, Then Grow

Even after doing your due diligence, move slowly.

Start with just one tenant in one unit and try it for a few months before allowing a second listing. This gives you time to see what works and what needs adjusting so you're maximizing both the guest experience and your income.

Note any negative issues that need to be addressed — parking, noise, neighbor complaints, and the like. After seeing how the rental performs, decide whether the financial gains outweigh the negatives, if there are any.

Think and Plan Long Term

If everything is working with your test unit and you're considering rolling it out to more of your units, don't do it haphazardly. Plan ahead.

You might position all the homesharing units on a particular side of the building or corner of the property to minimize disturbance to other tenants. If you have a perfect unit in mind, you may want to offer an incentive for current tenants to move out so you can free it up for the program. Then, any time a vacancy opens within your designated homesharing units, you can grow your portfolio of Airbnb rentals.

And if you're making significant renovations or building from the ground up, work with your designer to incorporate homesharing-friendly elements: concierge desks, dedicated entrances, key exchange, lockers, and more.

Have an Exit Strategy

Any time you allow a tenant to list your unit on Airbnb, establish a new leasing agreement.

Besides properly assigning the new liability risk to the tenant, make sure it's a month-to-month lease with a mutual opt-out. If the tenant isn't meeting your standards, you can give a 30-day notice to come off Airbnb — and they can either stay under a new long-term lease or move out.

But why mutual? With homesharing units, you can potentially charge more rent since the tenant has a chance to earn side income. If that income disappears or comes in lower than expected, you don't want to keep a tenant there who can no longer afford the unit. Freeing it up lets you find someone who can.

Know Your Tenants Well

Everyone involved needs to be on the same page. Ask yourself:

• Do they travel frequently?
• Does their tenant history suggest they're considerate, thoughtful neighbors?
• Are they genuinely informed and ready to be Airbnb hosts?

Ultimately, you want to see whether becoming a host fits their current lifestyle. If it doesn't, no worries — when there's enough margin, you can bring in an outside professional host instead. Some experienced hosts in your market may be looking to manage additional units through co-hosting arrangements, but the margins have to be there for everyone to benefit.

Airbnb's Friendly Buildings Program

Tracking and auditing funds with each individual tenant can be difficult and time-consuming.

If you're seriously exploring multiple Airbnb listings on your property, see whether Airbnb's Friendly Buildings Program is available in your market. You can email buildings@airbnb.com to find out and get more information. By having Airbnb manage the process and using their platform to document and track everything, you minimize the overhead needed to make it all work.

That said, the exact financial arrangements through the program aren't always clear. You may be trading some profit for convenience and access to top hosts — which could reduce your homesharing revenue compared to running it on your own, directly with your tenants.

So, Should You Host on Airbnb?

There's no denying it: Airbnb is here to stay, and it's reshaping the real estate industry.

At the end of the day, the decision comes down to gaining enough control over any homesharing activity in your building and earning a worthwhile return for the extra work and risk involved. How worthwhile it is depends largely on your market — the greater the gap between the potential revenue of an Airbnb listing and what a long-term lease earns, the more lucrative the opportunity for everyone involved.

If you want to go deeper on the strategy behind running profitable short-term rentals — whether you own the building or want to manage units for owners who do — the BNB Mastery Program breaks down exactly how to build a real, scalable Airbnb business. You can also connect with active hosts and owners working through these same decisions inside the BNB Tribe community, and browse more practical hosting guides on the blog.