Social media is used by literally millions of people around the world and is adapting rapidly for many uses and many users.
If you are a landlord, how might you go about tapping into this vast potential of short and long-term rentals?
Social travel sites
First of all, it might be helpful to consider just what makes a social travel site.
In general, of course, any of the many hundreds of social media platforms might be used by those wanting to travel or already underway – and potentially in search of the type of accommodation you may be able to offer for rent. These networks allow users to connect with literally millions of members all over the world.
Bebo, for example is the second biggest of all the social networking sites in the UK, according to Social Media Today which lists just 40 of the most popular. Other immediately recognisable addresses are the ubiquitous Facebook, Orkut, LinkedIn, Twitter and many, many more.
But there are also specialist social networks specifically designed not only for travellers but for those looking for accommodation along the way – typically somewhere to stay in the short-term, but many of them also looking for somewhere somewhat more permanent.
Examples of these social travel sites are becoming increasingly numerous, but the following may give some idea about how they work – especially since the names may sometime be something of a giveaway:
- couchsurfing, for example, says it all – a site for travellers not only looking for someone’s couch on which to crash for a few days, but also a meeting place for like-minded friends, local bars and restaurants and upcoming events;
- airbnb was originally called airbedandbreakfast.com, again giving away the whole point of the site in the name alone – linking up travellers with either an extra room in someone’s home, the entire house and even igloos and castles;
- wimdu works on a very similar basis, but might be considered a little up market from airbnb in that it focuses more on the rental of self-contained apartments, flats, houses and even houseboats;
- 9flats also offers travellers a way of renting their own space in an apartment or house.
How do they work?
All of these sites – and many others – operate in much the same way. The supply of various types of accommodation, in practically every part of the world, is advertised on the site; the demand comes from travellers who logon in search of somewhere to stay. The principle really is as simple as that.
As a landlord with premises to let, you might choose to become part of the supply side of that equation and take advantage of the demand from travellers as potential tenants. Using social travel sites in this way may certainly be an option for you to consider.
Typically, the travelling guest pays the social travel website the rent due and the website subsequently pays out that rent, minus the site’s commission, to the landlord.
A report in the Guardian newspaper in October 2014 warns that the commission charged by the website may sometimes appear quite steep and cites the example of 9flat’s charge of 12-15% of what the guest or tenant pays and airbnb’s charge of 3% to the landlord and 6-12% to the guests or tenant. You may want to compare these commissions with that you are likely to be charged by your local lettings agency.
Another factor you may want to take into account is the relatively short-stay which many of those using social media travel sites may be looking for in the first instance. Some, however, may be looking for a rather longer-term tenancy. This suggests a couple of options for you as a landlord:
- you might welcome the short-stay traveller to boost your rental income during the inevitable gaps as one long-term tenancy finishes and the next one starts; or
- you might take advantage of an initial short-term tenancy to get to know individuals who may be looking for longer-term accommodation under a long-term tenancy.
A concern shared by many property owners lies in renting out their rooms or entire premises to tenants from social media travel sites – they are relative strangers after all, and you have little opportunity to conduct the full-scale credit checks and background references you might usually make.
In response, some of the more established social travel websites make every effort to verify the identity of the traveller concerned. Airbnb, for example, operates its own “verified ID” routine to gather a traveller’s email, telephone number and social networks activity.
The fact remains, however, that tenants you may find through social travel sites are at the very least strangers.
This may have important consequences not only for your own peace of mind but also for the providers of your landlord insurance. Some insurers, for example, may make it a condition of the cover that all tenants are fully vetted and that a formal tenancy agreement is signed. For short stays of just a night or two, this is probably unrealistic, although if temporary guests ultimately become long-term tenants, all the customary checks may then be made.
If you have any doubts or queries about how any of this may affect your landlord insurance, you may want to consult a specialist provider – such as those of us here at Cover4LetProperty.
A salutary tale
Things may go wrong, of course, when you are looking to generate a little extra rental income – even if it is for a relatively short duration.
Let’s hope that you are not as unfortunate as New Yorker Ari Teman, for example, who decided to let his apartment to an individual he found on a social media travel site and who said that he was on a brief visit to the city for a wedding.
According to the story in the Guardian newspaper, Mr Teman made a surprise visit back to his apartment to discover that the temporary tenant was using the premises to host an orgy! All of his furniture and belongings had been moved out of the apartment and was either broken or covered in dirt. The police had to be called to encourage the so-called tenant to leave.
Mr Teman is apparently a comic and may have been able to incorporate the situation into one of his stand-up routines – as a landlord, though, you may have had a harder time of seeing the funny side.