AirBNB vs. Renting: Which Offers the Best Real Estate Strategy?

If you’re looking for additional income, renting out your property can be a sound investment strategy. You may have an additional dwelling that’s not being used, so why not make money off it from renters?

In terms of renting, there are two viable options. Either you can go the traditional route and rent to tenants for an extended period of time, or you can use AirBNB. This hosting platform allows you to list your home or apartment on their site, for vacationers and tourists looking to stay on a temporary basis. Both options have their pros and cons, but which offers the best real estate strategy?

airbnb vs renting

Legal Issues

There are some legal concerns you need to stay mindful of when using AirBNB, particularly if you don’t own the property you’re trying to rent out on a short-term basis. Every state has different regulations, so you’ll want to see where your area stands as far as short-term leasing. Some states may require you to have a permit, in fact, in order for people to stay in your rental property.

When you take the traditional renting route, you obviously don’t have to worry about any legalities. You can rent for as long as you want and to whomever you want. For this reason, traditional renting is a little less complex from a legal standpoint compared to AirBNB.

Hospitality Effort

The great thing about renting your property out the traditional way is you don’t have to offer as much hospitality. Sure, you want to greet your tenants when they first arrive. After the initial first days, though, you pretty much can leave tenants alone to live their lives in peace. You may stop by occasionally to make sure they’re enjoying the property and to fix any issues. For the most part, though, traditional renting is pretty hands-off.

AirBNB is more oriented towards hospitality, however. After all, the people looking for short-term leases are often on vacation or touring a new city. You thus want to give them the best experience possible, which means taking a more hands-on approach. This may include cooking meals, providing transportation, and cleaning up the space while they’re out.

meal tray on bed

Additionally, AirBNB works on a review system. So, if you provide better service and go the extra mile in being hospitable, you’ll probably receive better reviews from guests. The more positive reviews you get, the more profitable your AirBNB listing can be long-term.


Pricing varies quite a lot between traditional renting and AirBNB listings. The price for traditional rental properties is essentially determined by the market. So, if other rental properties in your area are priced around $1,200 per month, you can expect to get a similar rate. There will be times when you can vary off this price baseline, though. For example, if your property is much larger or equipped with a lot of modern amenities, you may want to increase the monthly rent.

room clean

AirBNB listings work a little bit differently in terms of price. Instead of basing your price off properties around the area, you generally come up with estimates based on how coveted your AirBNB listing is. For instance, if your listing is near a local attraction or in a popular city, you can charge more. You have to be careful, though. Pricing the listing too high may put people off and limit the amount of reservations you receive each month.

You also have to remember you’re competing with other AirBNB users in the area. As such, it may be necessary to make your rental prices cheaper to garner more attention. Once you’ve gained a lot of positive reviews and garner more attention, you can start increasing your rates.

Meeting New People

If you’re a person that likes meeting new people and learning about their stories, AirBNB is the best option. Every weekend, you can have different guests stay in your property. This includes people of different cultural backgrounds, ethnicities, and walks of life. While you’re giving them the best vacation they can have, you’ll take away something yourself. You can thus grow as a person, and ultimately better your rental service because you’ll be working with guests that are unique each time.

girl drinking wine on couch

Conversely, if you like keeping to yourself and having some consistency, traditional renting is the route to take. When tenants sign a lease agreement, you know they’ll be the same party that you work with up until the end of their lease. In some cases, you may work with a particular tenant for decades. You may take comfort in this because it lets you get to know them on a more personal basis. Then, both parties can work in harmony and avoid heated dilemmas.

The only thing you have to watch out for is renting to bad tenants. Individuals who are hostile or fail to pay rent on time will make renting a living nightmare. For this reason, if you decide to take the traditional renting route, you’ll want to screen every applicant. You need to make sure candidates have a full-time job, a good rental history, and are trustworthy.

Listing Fee

One of the major downsides of attracting tenants to come look at your property is the listing fee you have to pay. This may be calculated on a per day or monthly basis, depending on what listing platform you use. If you fail to market your rental property appropriately, these fees could start adding up real fast.

man on website

A more cost-effective option is to list your property on AirBNB’s platform. The listing fee is completely free. The only thing you’ll have to cover are the costs per booking. Therefore, you don’t have as much added pressure of getting people to fill your properties.

Income Stability

One of the most important aspects to consider in terms of investing in both options is the income stability. Generally, you’ll have more stability with traditional renting. Tenants are required to pay their rent each month, according to the contract that they signed before their lease ever began. It’s nice to know when this money is coming in, as you may have to pay for repairs and regular upkeep.

cash handing out man

You don’t get as much income stability when you decide to go with AirBNB. This is mainly due to the short intervals in which people stay in your home. They may only be there for the weekend, and you don’t exactly know when the next guests will arrive. Your reservations with the AirBNB platform could also be seasonal. For example, if you have a property on the beach, you’ll probably only get reservations during the summer when the weather is nice.

Property Damage

Although AirBNB gives you the chance to meet all sorts of people, there is a higher likelihood that damage occurs to your property. After all, it’s so hard to screen every candidate that comes through, especially if your AirBNB listing receives a lot of traffic every month. Then once damage is identified, you may have trouble tracking down the responsible party.

Traditional renting does leave you susceptible to property damage as well, but you won’t have to cover these costs. That’s because you can have tenants pay a security deposit, in advance, that takes care of any damages that occur on their behalf. This essentially gives you a security blanket, saving you from paying for costs you shouldn’t be held accountable for.


The great thing about these renting options is both offer insurance coverage. So, if something severe happens — such as a fire or vandalism — you will not be out thousands of dollars. With AirBNB, you can get host protection insurance. It covers damage from guests up to a million dollars, and you don’t have to pay a cent for this type of coverage.

phone paper money

With traditional renting, you do have to pay for insurance. However, there are many different insurance options available. From basic to comprehensive plans, you can choose a coverage option that you’re comfortable paying long-term and one that works for the type of damage your home will likely experience.

Customer Satisfaction

Customer satisfaction is huge if you’re looking for more AirBNB reservations. Guests hoping to stay in your area examine these reviews in great detail, and one negative experience could send them to your competitors. As a result, you have to go above and beyond to make sure guests are happy. This can be somewhat challenging if you’re not good with people or simply don’t have enough time to cater to their every need.

woman pillow happy smiling

With traditional renting, though, you don’t have to really worry as much about customer satisfaction. Sure, you want tenants to be happy and have zero problems with your unit. If they get dissatisfied, however, your business is not greatly affected. You can simply part ways with a tenant after their lease is done and find someone else to take over.

Final Verdict

There are so many differences between AirBNB renting and traditional long-term renting. They both have their pros and cons, and it’s really a matter of what you’re looking for in a real estate strategy. If you’re looking for added flexibility as far as when you rent and who you rent to, AirBNB is the best option. If, however, you want systematic practices in place and desire long-term relationships with tenants, you’d be better off with traditional renting.



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