AirBnB’ing a house while it’s on the market

snusria

Hi all

We are lucky enough to be able to purchase a house without creating a chain. Basically, we are taking out a large mortgage close to the value of our current house as a bridge loan, which we will repay as soon as we sell.

Now, our new house purchase is moving along nicely and we expect to complete in a month or so. Our old house sale — not so much. It has been on the market for over a month with the best agent in the area, and we only had a handful of viewings and no offers yet. Even if we’re being optimistic, the old house will sit empty for several months after we move, and in the current climate it’s really hard to tell how long it might take. While we own both houses, we will be paying extortionate interest to the lender, and so we thought it might be good if we were able to offset the cost by renting it out.

Long-term rent does not seem to be an option, but we thought that AirBnB’ing it for 1-2 months at a time could work. There is no long term commitment and we are thinking of setting the price well below market average in exchange for asking the guest to accommodate viewings (nothing crazy, no more than once a week) by leaving the house for an hour or so and making sure it’s not a complete mess for when the potential buyers come around.

Now, on the surface, it sounds like a smart idea, as it takes the pressure off to drop the price and sell quickly, and we won’t be feeling like we’re bleeding money because of a house that we don’t even use. However, I am a bit worried that we may be shooting ourselves in a foot and potentially blocking the sale process, putting off potential buyers and risking that the house will be left in a state of disrepair.

I would be grateful for any advice, opinions or personal experience!

_Penny_Dreadful

snusria said:

Hi all

We are lucky enough to be able to purchase a house without creating a chain. Basically, we are taking out a large mortgage close to the value of our current house as a bridge loan, which we will repay as soon as we sell.

Now, our new house purchase is moving along nicely and we expect to complete in a month or so. Our old house sale — not so much. It has been on the market for over a month with the best agent in the area, and we only had a handful of viewings and no offers yet. Even if we’re being optimistic, the old house will sit empty for several months after we move, and in the current climate it’s really hard to tell how long it might take. While we own both houses, we will be paying extortionate interest to the lender, and so we thought it might be good if we were able to offset the cost by renting it out.

Long-term rent does not seem to be an option, but we thought that AirBnB’ing it for 1-2 months at a time could work. There is no long term commitment and we are thinking of setting the price well below market average in exchange for asking the guest to accommodate viewings (nothing crazy, no more than once a week) by leaving the house for an hour or so and making sure it’s not a complete mess for when the potential buyers come around.

Now, on the surface, it sounds like a smart idea, as it takes the pressure off to drop the price and sell quickly, and we won’t be feeling like we’re bleeding money because of a house that we don’t even use. However, I am a bit worried that we may be shooting ourselves in a foot and potentially blocking the sale process, putting off potential buyers and risking that the house will be left in a state of disrepair.

I would be grateful for any advice, opinions or personal experience!

I think it’s a bonkers idea. You’re looking for a very specific type of renter who has a main home elsewhere and is looking for accomodation for less than 3 months and will allow viewings otherwise you’re at risk of creating an AST and/or no viewings being allowed. You should also check the local authority’s rules about short term lets in case you need a licence or similar. 

Are you really taking out a bridging loan to finance the purchase of the new home or is it just a regular mortgage? Which property will this loan be secured against? 

housebuyer143

I don't think any OP is actually getting a bridging loan but a mortgage to bridge the gap. 

snusria

You’re looking for a very specific type of renter who has a main home elsewhere and is looking for accomodation for less than 3 months and will allow viewings otherwise you’re at risk of creating an AST and/or no viewings being allowed.

@_Penny_Dreadful Sure, it should be short term, which I don't think is a problem. There are holidayers and people who have their house refurbished and need to rent somewhere for more than a couple of weeks but less than a few months. The problem is them potentially blocking the viewings or putting the buyers off, even if we agree otherwise verbally.

You should also check the local authority’s rules about short term lets in case you need a licence or similar. 

It shouldn't be a problem if we keep it under 90 days.

Are you really taking out a bridging loan to finance the purchase of the new home or is it just a regular mortgage? Which property will this loan be secured against? 

It is just a regular mortgage on our new house that allows unlimited repayments. The old house is owned outright, no debt there.

TheJP

Agree, not a very good idea. 

When i am buying a house i google the house and area, i doubt a buyer would be impressed if the house was listed as airbnb. What if the renters upset neighbours leading to a dispute that has to be highlighted as part of the conveyancing.

Is it worth the risk?

snusria

TheJP said:

Agree, not a very good idea. 

When i am buying a house i google the house and area, i doubt a buyer would be impressed if the house was listed as airbnb. What if the renters upset neighbours leading to a dispute that has to be highlighted as part of the conveyancing.

Is it worth the risk?

Wow, didn't even think of that as a possibility. Thank you!