Risks of Airbnb in Malaysia

Risks of Airbnb in Malaysia

Airbnb first penetrated into the market with a plain and simple concept: to allow property owners to rent out their properties or spare rooms to guests in order to earn money from short term rentals. Though, it may seemed like a brilliant idea that could generate enough interest and eventually fade into the background which no one expected it to turn into the giant that it is today. In just six years, Airbnb has shifted the lay of the land property investment and threatened the hospitality industry. Property investors from Singapore saw it as an opportunity to monetize their investment. This is because to rent a house for short term lease like Airbnb in Singapore is quite restricted and also the property tax in Singapore is much higher than Malaysia (before currency conversion). However, while all seems too good to be true, there are some risks that property investors need to be aware of. 

War of price

Due to the unpredictable nature of the online business, it has also become increasingly difficult to regulate and control prices. It will 10 days to break even and to cover your one month rental with the additional of two to three days just to cover up your utility bills, that’s when you run your Airbnb full time. This also means that you will need to rent out your property for a total of 20 to 22 days to make profit. Furthermore, with the large discrepancy in prices happens, mind you, the hosts do not depend on the earning from the Airbnb rental to make a living undercut the average market price that affects those full-timer.

There is another challenge where if your property is priced higher due to the furnishing you have placed and installed with the comfort you offer, it may still not appeal to those who don’t look beyond the price tag and that suppresses the price. But then again there are some who appreciates for better facilities. 

Wrong crowd attraction

While we are tempted to keep price low to garner more interests but be careful that you might attract the wrong group of people. There are some who abused the property by throwing rave parties and leaving damages and stubborn stains behind once the party ended. When such neglect happens, you will be wasting your time and effort even if they are willing to pay for the cost of cleaning and repairs. The time spent to get it back in shape again will cost you the opportunity to rent it out. Let’s not forget the noise disturbances caused to the neighbours and the safety risk it puts the other homeowners under.

Illegal business activities operation

Hotel has been implementing tight security systems causing the hotel to be increasingly difficult for those offering sex-based services to operate their business. While the short term nature of Airbnb has made it the perfect platform to operate such illegal activity. 

There are cases where some rented the property for weeks and pay upfront, sounds too good to be true eh. As days go by, residents started noticing that there were different visitors coming in day in day out. They were only discovered after they have checked out and weeks later, they rented another property within the same area. 

Scam victim in the making

Upon declaring your information on Airbnb will make you vulnerable to scammers. When your property is being booked online, the bookee will gain the full access of the owners’ personal information such as contact details, home address and etc. This allows the scammers to use this tactic and gain access to the country. Once they reached the immigration, they will claim that you are their guarantor by providing all of your personal details. 

Robbery and false bookings

Do you know these culprits will book your property between 11:30pm and 1am? Yes, this is the time where banks do their clearance and update or complete system maintenance. Once the booking is done and dusted, they will then call the owner to inform that the property has been booked by others and they would like to check in which can be done immediately because most of the properties has been digitalised. By the time the bank calls you in the morning, they will inform you that they have detected a suspicious activity and by the time you check your property you would have already been robbed clean. 

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