One Dublin homeowner told Newstalk.com how he's earning far more since switching to short-term holiday letting...
It's been seen as a contributing factor to the home rental crisis, particularly in Dublin, for some time, and Airbnb might become an even more appealing option for those with property if Minister Simon Coveney's controversial proposals to cap rent increases at 4% – or an even lower compromise – gets the green light before Christmas.
With the capital's Airbnb market deemed to be "out of control" in the summer, as the number of short-let spots was shown to be almost double that of the number of houses available to rent, one Dublin property owner told Newstalk.com why he's gone the Airbnb route and never looked back.
Bob Haugh, the CEO of Travel Market, owns an upmarket 3,000 sq feet three-bed in Ranelagh that would typically garner €4,000 per month in rent.
He now lists it on Airbnb at a price of €450 per night and says that, with an average occupancy rate of close to 90%, he's coming away with €131,000 gross annually. Taking expenses away, this comes to €113,000.
By stark contrast, Haugh says he was previously earning roughly €48,000 per year when he had long-term renters.
Taking umbrage with the new attempts to control rent, on a point of principle, Haugh argues:
"Interfere with economics and the market will find a way to correct itself... Airbnb is the correction."
Haugh doesn't consider himself to be a professional landlord, saying that he has a love for property and architecture and previously lived in the home himself, which he describes as "very high-end" and "somewhat unique".
While the figures would appear to speak for themselves, you would assume that there are other considerations. Surely having someone long-term ensures you have a guaranteed income and allows you to build a strong relationship with the tenant, as opposed to having to deal with people coming and going every few days?
"Long-terms renters are almost more difficult," Haugh says to the contrary. "They use the kitchen, the washing machine, the TVs etc... Short-term are actually not as hard-wearing as long-term. They are out all day and most of the night!"
As for ensuring high occupancy, he says:
"My work experience allows me to yield manage the property so we increase the rates in the peaks and reduce during the quieter months. We have picked a hotel in Dublin and we follow their pricing trend. They tend to know what's coming down the tracks and are a good lead indicator."
While any Coveney cap will not affect Haugh's set-up, he believes it is doomed to failure in any event.
"[It's] regulation and regulation does not work – its complex to implement and rarely distributes wealth evenly.
"It’s a disincentive to build to rent and may force people to look at Airbnb, which further reduces rental supply."
He's also keen to avoid the issue becoming a discussion centred around how renters are currently suffering in Ireland.
"Rental is business," he says. "It's hard to bring sympathy into business. Nobody felt too sorry for the landlords or developers when the bottom fell out of the market but we quickly forget this.
"Supply and demand solves most business problems and not intervention. Look at what price fixing did to aviation in the '70s – look what deregulation [did]. It brings competition and quality improvements."
DIT housing lecturer Dr Lorcan Sirr questioned whether the difference in earnings was really as dramatic once taxes were factored in, though Haugh responded that in his case, after-tax income was still "significantly more from Airbnb than long-term rent".
Dr Sirr noted that, while Haugh was right that people will do what brings them the most income, when it comes to a wider shift to Airbnb hosting he believes it will be common for people to be "looking at the gross income but less keen on paying the tax that goes with it."
It is true that Airbnb income does not qualify for rent-a-room relief, but things certainly seem to be working out well for Haugh. He also avoids PRTB fees (for Ireland's National Tenancy Register).
Whether more people with properties see this as the way forward and – perhaps more crucially – how long it would be before the government moves to regulate this area are now the big questions.
With the cost of rent in Dublin at its most expensive level ever, there have been calls for a Berlin-style approach to regulating Airbnb and similar services.
Fearing that these homestay networks were driving up rents and cutting into the property supply, authorities in the German capital fully implemented a new law – Zweckentfremdungsverbot – earlier this year that limits owners to renting only rooms, rather than entire flats or houses. Fines of as much as €100,000 have been threatened if people are caught in breach of the law as the city appealed to the "civic pride" of its residents – essentially asking them to anonymously report people who were possibly ignoring Zweckentfremdungsverbot.
Indeed, we already have a precedent for regulation, thanks to a case relating to a Temple Bar property this year.
In October, An Bord Pleanála upheld a ruling that a property owner in the popular tourist area needed to apply for planning permission to continue renting it out for short-term holiday lets.
Local residents had objected to Dublin City Council's initial ruling that the owner's activity amounted to a change of use.
An Bord Pleanála backed up the DCC, citing the extent and frequency of visitors, the solely commercial nature of it, as well as associated security concerns and general disturbance to other renters.
Airbnb said in a statement:
"We remind all Irish hosts to check and follow local rules before they list their space.
"This is made clear on our responsible hosting page, which contains useful information and resources on home sharing rules in Ireland."
However, the authorities' ability – and desire – to realistically enforce this remains in doubt.
Haugh, meanwhile, doesn't foresee his handy little earner being affected any time soon...
"In the longer term, the market always wins," he concludes. "You hear that Uber was outlawed in France – turn on your app outside any French airport and see what happens. You can’t row against the tide of change."