Real Estate Blog

3 Things You Should Know Before Putting Your House on Airbnb

Renting out a room in your house or the entire house is often touted as a great way to earn extra money. And in many cases, it could be a great way to get income from a spare room or your property. What many don’t realize are the risks and potential problems this can cause, and we aren’t just talking about the unauthorized party while you’re on vacation. Here are three things you should know before putting your house on Airbnb.

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Your Goals

If you want to earn some extra income, you can rent out a room on Airbnb when it is convenient for you. If you’re seeking consistent, reliable secondary income, you’ll have to provide consistently excellent service and serve a steady stream of customers. Income replacement may require turning your home into a de facto bed and breakfast. Know your goals so you can set expectations from the onset so that you get what you expect out of Airbnb.


If you have standard car insurance, you probably don’t know that it doesn’t cover you if you’re being paid to drive your vehicle. The auto insurance company won’t cover you when you’re in an accident acting as a delivery driver or Uber driver because you were engaging in a higher risk activity than the policy you signed up for.

This same logic applies to your homeowners’ insurance. You can run into insurance issues with Airbnb in several different ways. In California, for instance, hosting people through Airbnb is considered a business pursuit.

If the visitor is injured on your property, you’ll have to go through the HPI insurance Airbnb offers. Unfortunately, their insurance only covers the scheduled stay, so it doesn’t protect you if the person is injured when they show up early or stay late. And it doesn’t cover extra people who show up to stay. If the person is injured when they aren’t covered by the Airbnb policy, your homeowners’ insurance won’t cover it due to exclusions in the homeowner policy for business use.

Another consideration is the exclusions in Airbnb’s policy. It won’t cover you if someone intentionally vandalizes the property – and neither will your homeowner’s insurance. It won’t cover product liability, such as when someone is injured by an appliance in your home. It doesn’t provide any coverage if Airbnb decides to sue you, either. You probably want to get additional coverage above and beyond your existing home owner’s insurance policy if you’re going to be an Airbnb host.

The Legal Considerations

Depending on where the house is located, you may be legally required to acquire a permit or business license to rent via Airbnb. Note that these may be listed under rules for short-term occupancy. Then there’s the fact that you may not be allowed to rent out property full time via Airbnb in many jurisdictions.

Your Homeowners Association may limit Airbnb rentals or prohibit them altogether. Your mortgage lender may also consider it a violation of the mortgage to turn a private home into a de facto hotel. If you use Airbnb to help pay your mortgage, know that using the property this way could affect the interest rate you have to pay if you try to refinance the home loan.


Do your due diligence before you decide to put your home up on Airbnb. Miss one of the issues we’ve outlined above and you could run into serious problems in your effort to earn extra money.

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