After ten years as a host, it’s been a great way to generate income from low performing properties and during vacancies.
So how do you join the short-term rental business while reducing risks?
Our experience has been that you have to be careful as you are on your own and Airbnb only covers about 20% of our claims, even though we experience losses in about 25% of our rentals so that about 5% of actual covered loses.
A few things you can do to protect yourself.
- Save receipts
Make an inventory with receipts, pictures, and the serial numbers of items when possible, particularly electronics. After being robbed by guests, we were not reimbursed because we didn’t have some of this information, although requests for information vary depending on the person helping you from the Airbnb trust and safety team. If you have to get the police or an insurance company involved, they will both request the same information.
We recommend having all this stuff in digital copies and saved in the cloud in an email folder or both. In case your computer or paper documents are stolen, and you're left with no proof, which happened to us. As you add more items to your rental; snap a picture of the thing, receipt, the serial number, and save the information in an email folder with the heading describing what the item is. This will keep you organized and allow you to respond quickly when an incident occurs. We’ve been denied claims because we couldn’t get all the information together fast enough.
- Protect your mail and personal documents
We’ve had guests break into locked closets and filing cabinets to steal personal information. Use a safe to guard your information or move it off the property. Professionals, prefer to take your personal information versus your property as it is more valuable and harder to notice. After breaking into a storage area, one guest stole over 50 rental applications; complete with date of birth, social security, bank accounts, and a treasure of other personal information.
I became aware of the incident when a group of 4 detectives came to my hospital to speak to me months after it had happened. It was scary, and they asked me a lot of questions because they thought I could have been in on it. Police showed me several 4" thick binders with 100's of pages of my documents that they had discovered when they arrested the thieves and nothing was returned to me because it became evident. They were making credit cards, drivers licenses, applying for lines of credit under everyone’s name, and selling some of the info on the dark web.
Other guests have left behind piles of stolen mail, credit cards, and additional personal information they had taken from other hosts. Use a locked mailbox and don’t allow guests to have access to your mailbox. If you let them receive mail, you can give them their mail after you go through your mail.
Remember if someone steals from your home the police won’t get involved because you permitted for the thieves to stay in your home. They will only investigate if it’s a burglary case, which means they had forced entry into an area of your home that was locked and they did not have permission to go into such as a closet, filing cabinet, or safe. So, using locked spaces for valuables allows you to get help from the police if you're robbed.
- Make sure guests are verified with government identification.
Before confirming a reservation, make sure the person is verified with a government identification on their Airbnb profile. Currently, Airbnb only requires this for "Instant Book".
A guests account can say verified if they enter an email or phone number, which anyone can get temporarily under a fake name, and they do. After they rob you, they open another email, get another temporary phone number, and move onto the next host. Having a government ID on file makes people think twice before they still from you.
However, we have also had people use fake or stolen identifications and rob us. Most of the professional criminals are going to use counterfeit identifications anyway, but the ID still helps to make some people think twice before stealing.
Unfortunately, Airbnb no longer cooperates with law enforcement when you get robbed unless they get a subpoena from a court. So, every detective tells me they don’t rely on Airbnb for help because Airbnb doesn’t help unless they're forced. When you contact Airbnb after being robbed, they direct you to a particular contact for assistance with law enforcement requests, and they'll tell you they cooperate; however, they can comply with law enforcement. But in reality, they don’t help with investigations again unless they get a subpoena which doesn’t happen in burglaries or vandalism cases because it would waste too much of the courts time.
The only thing you can do in this case, install video camera surveillance on the property so you can identify who stayed there. Just make sure you state in your property profile that you have surveillance cameras or Airbnb will give the guest a full refund if they complain about the cameras and it is not stated in your profile. It’s happened to me when a guest complained about a camera on the porch after staying there for a month, and we lost the entire month’s rent close to $3,000.
If the person doesn’t have the government ID on file ask them to upload it into the Airbnb system before you can approve them.
- Get insurance for contents
Content insurance will only help if you’re renting the house you live in, but if you have multiple properties the insurance companies won’t provide content insurance for the others. There are also some forms of rental insurance available in some areas.
- Squatters
In my opinion, this is the most difficult to protect yourself from and the Achilles heel of Airbnb. In most states, if someone has stayed under 30 days in your rental you can call the police, they’ll escort them off your property. It’s called the innkeepers or hospitality law and its meant to protect hotels from squatters. However, on the 31st day, the tenant has tenant rights, and you would have to go through a full eviction to get rid of someone.
We had a case that took six months in court with an attorney to evict the people, and that was after we ended up paying a settlement for the people to leave. Airbnb does not provide any protection for this, and their insurance is for liability if the people get hurt or damage your property, not for squatters. If you end up with squatters Airbnb will call the guest repeatedly and tell them they need to leave, basically harass them, and hope they go. In our cases the guests just blocked them, and it had no effect.
What you can do is not take bookings over 30 days, or have them check out for a day after the 29th day and check back in. That’s all you can do. When we have had to call the police to get squatters out, the police will ask you “how long has the guest been at your house?”. They won't get involved if they are outside of the 30 days; otherwise, they can be sued for violating tenants’ rights.
I know of people who have waited for the squatter to leave and just thrown all their stuff out and changed the locks. This strategy often works, but you run the risk of being sued or put in jail for an illegal eviction which is a criminal offense if it can be proven. Depending on where you live and your local laws.
The best recommendation would be to research your local rental laws and know how the system works so that you can operate within it. I know in Nevada an eviction only takes three days, so the requirements vary from area to area.
- Get the media involved
We have had some awful cases where people trashed our houses, sex, and drug parties, left everything saturated with marijuana odors, and Airbnb denied the claim even though we had before and after pictures and evidence to back up our claim. They will either tell you they will escalate the investigation, so you feel like something is being done and never get back to you. It’s happened several times to us. Or they’ll just shut you down with an answer like “we will no longer be discussing this incident with you and all communication will be ceased”, and that’s it.
The only option you'll have is to contact your local media until one of them picks up the story. In our case, the television news came out, videotaped my house all trashed, interviewed me, and then contacted Airbnb to ask if they would like to comment. Within 10 minutes I received a phone call from Airbnb saying they were very sorry about what happened and they were going to handle my case with a special department who offered to pay for my credit monitoring services and assigned a claims management company called Crawford and Company to handle the case and help determine a fair reimbursement for the damages.
Airbnb is headed for an initial public offering (IPO) this summer and they don’t want any negative press. So if you have no other options seek out a newspaper or news channel to help you get justice.
- Use a VPN router
This type of router gives everyone who stays at your rental a unique untraceable IP address, this way if one of your Airbnb guests is engaging in illegal online activity from your house you won't be blamed for it.
- Make detailed house rules
If it is not written in your house manual and someone does it then Airbnb will not cover it. You have to be very specific and detailed with the information you provide with guests or your guests will get free stays at your house. We had a guest get a refund because we said the rental was 10 minutes walking distance from a lake and it turns out the guest used google maps and it was 12 minutes walking so Airbnb gave the guest a refund.
Another guest got a refund after several weeks of staying at my house because the description said it was a one bedroom, but the bedroom actually didn’t have a door on it so it wasn’t considered a bedroom. After the guests sent in a few pictures, they got a full refund. Airbnb says they are a neutral party, but my experience has been that they are more on the guest's side. So be very descriptive and if a guest mentioned something that you have missed quickly add it to your description.
In end, ask the Airbnb agent helping you with your claim how you can avoid the problems you had with a guest in the future. The Airbnb staff are very willing to give you some insight if you ask for it. Otherwise, they'll just close the case and move on. This information is valuable because it gives you some insight into how to avoid having the same issues and if they happen again how to prepare for them so you get reimbursed. This is how you can become a pro very quickly because these are the details they don't publish in their guidelines.