Profiting from Airbnb: Is it really worth the risk?

If your side hustle is hosting guests in your property, you need to brush up on your insurance terms – or upgrade to a commercial policy, understanding what will be covered

AIRBNB might have revolutionised accommodation the world over, but opening homes to strangers is always going to be a risky business. And in a high-risk country such as ours, hosts need to think carefully about their security and that of their property.

As one of the world’s largest marketplaces for places to stay and things to do, Airbnb offers stays in more than seven million sites and 40 000 activities. More than half a billion people have used the app, in more than 190 regions. It’s helped local entrepreneurs monetise spaces and driven tourism to communities.

Appealing as the concept might be, it’s also been mired in controversy: In Cape Town, it has sharply driven up property prices and put pressure on a tight market.

It has transformed quiet neighbourhoods into revolving hotel districts and forced major cities to clamp down on short-term rentals.

After Halloween, the company was forced to redouble its efforts against stopping unauthorised “party house” bookings, in the wake of a shooting at a rental home in California. Five people died during the incident. Airbnb reportedly plans to verify every listing on its platform by the end of next year through a mixture of company and community monitoring.

Most recently, reports have outlined how easy it is to exploit the company’s rules in order to scam users through phony listings, fake reviews, and even intimidation.

While most stays are without incident, there are instances of houses being wrecked by wild parties. In Melbourne, 70 guests trashed a beachfront property causing damages amounting to R1.5 million. In another case, a guest put a sofa, a single bed and chest of drawers in the shallow end of a swimming pool while another guest recreated a beach inside the owner’s property.

Then there was the £26 000 (R493 000) public liability claim brought about in Wales when a guest slipped on decking steps. There was a sign on the back door, warning the decking could be slippery when wet, but the guest still claimed for personal injuries, time off work and legal fees.

Christelle Colman, the managing director of Elite Risk Acceptances, warns that being a host isn’t without risk: “You just never know what you’re letting yourself in for when renting to virtual strangers, and a big risk for homeowners is that their property will be damaged.”

And that risk must be managed. Colman says when Airbnb came onto the market, insurers weren’t geared for the consequences. “It wasn’t an issue 1 1 1 1 2 2 1 1 3 3 1 1 3 1 2 1 4 1 2 4 4