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‘A Bargain With the Devil’—Bill Comes Due for Overextended Airbnb Hosts


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2020 Apr 29, 12:30pm   1,545 views  11 comments

by EBGuy   ➕follow (0)   💰tip   ignore  

Entrepreneurs built mini-empires of short-term rental properties, borrowing against revenue that’s now vanishing under coronavirus lockdowns
For years, Cheryl Dopp considered the ding on her phone from a new Airbnb Inc. booking to be the sound of what she called “magical money.” A property she rented out in Jersey City, N.J., on Airbnb could gross more than $8,000 a month, she said, double what long-term tenants would pay.
Now, Ms. Dopp associates the dings with cancellations and financial misery. The 54-year-old information-technology contractor said she had about $10,000 in bookings evaporate overnight in March. She has $22,000 in monthly expenses for a largely...
Avoid the paywall (hat tip @zzyzzx): https://www.foxbusiness.com/lifestyle/bill-comes-due-for-overextended-airbnb-hosts

Comments 1 - 11 of 11        Search these comments

1   MisdemeanorRebel   2020 Apr 29, 12:31pm  

"I want the reward of short-term vacation rentals, without the risk of cancellations!"
2   RWSGFY   2020 Apr 29, 12:36pm  

Remember Casey Sirin?
3   Shaman   2020 Apr 29, 12:40pm  

Pay wall...
How does a property cost her $22,000/ month? Especially one that she’s making $8,000/month on. Seems to me like she should have had some savings.
The hosts in trouble are the ones who leveraged out a whole bunch of properties.
5   zzyzzx   2020 Apr 29, 12:43pm  

Airbnb hosts saw $1.5 billion in bookings vanish in mid-March as the travel industry froze, according to market-research firm AirDNA LLC, which analyzes bookings. Airbnb gave guests full refunds and forced hosts to dip into their pockets or beg for leniency on April loans and rent.

The startup that gave rise to the short-term rental economy is slashing expenses and secured $2 billion in financing this month, including a $1 billion loan at a hefty interest rate. The Wall Street Journal reported last month that Airbnb had racked up hundreds of millions in losses due to the pandemic. The company hasn't publicly reported figures.
6   RWSGFY   2020 Apr 29, 12:44pm  

Shaman says
How does a property cost her $22,000/ month? Especially one that she’s making $8,000/month on.


All her properties cost her $22K. She used to make $8K from one of them.
8   Shaman   2020 Apr 29, 12:51pm  

Ok I see, she had a bunch of properties. Time to seek traditional renters.
This could help to alleviate some of the housing problems AirBnB created.
9   EBGuy   2020 Apr 29, 1:35pm  

It looks like Jersey City passed a pretty extensive short term rental ordinance in June, 2019 (PDF FAQ here). If the unit in not owner occupied, you can rent it out as a short term rental for no more than 60 days a year. This ordinance is similar to what quite a few Ess Eff Bay Area cities have passed. The Jersey City ordinance does allow you to grandfather in one non-owner occupied unit, which is, I believe, how Ms. Dopp rents out the one unit in a multiplex via AirBnb.
10   RC2006   2020 Apr 29, 1:42pm  

This is great news for people looking for vacation home for personal use!
11   RWSGFY   2020 Apr 29, 1:43pm  

Shaman says
Ok I see, she had a bunch of properties. Time to seek traditional renters.
This could help to alleviate some of the housing problems AirBnB created.


Unless these properties don't pencil out with what the traditional long-term renter would pay. Which I expect they don't.

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