If you’re seriously considering using your rental as an Airbnb as a tool to supplement or provide income, you probably have some mortgage-related questions. Let’s see if we can answer them for you here.
And while Airbnb will never replace the consistent income and security that comes with long-term lets, it can offer much higher returns. In Nairobi, the average daily rate stands at Kes 10,000, which translates into an extremely healthy 30-day monthly revenue of 300,000 on the average occupancy rate (61%)*.
Can I get a specific Airbnb buy-to-let mortgage?
In short, yes. Though there are still some lenders in the Kenyan market who completely prohibit Airbnb hosts, a number of special holiday-let mortgages have been introduced in recent years to handle Airbnb and other short-term letting platforms.
Can an Airbnb property be financed with a buy-to-let mortgage?
All mortgage products are unique really, so, unfortunately, there’s no one answer to this question. The best thing to do would be to contact your lender who can fully review your circumstances and what options are available to you.
In most cases, an existing residential or buy-to-let lender would not be comfortable with the property being rented out as an Airbnb or for the tenants.
Do I have to have a buy-to-let mortgage for Airbnb – or can it be residential?
Not necessarily – so yes, in some cases, you can Airbnb on a residential mortgage.
For example, say you have a spare room you’d like to rent out from time to time, or while you travel, this wouldn’t be defined as a buy-to-let situation. In terms of lenders, some are flexible in the case that you want to purchase or remortgage a residential property to live where you want to let out a room or two to supplement your income, and they don’t have a limit on the number of days in the year you can rent out a given room either.
However, we would still advise that you tell your mortgage lender before making your home an Airbnb. After all, if your mortgage lender finds out that you are renting rooms in your home, you could be in breach of your mortgage terms, and could even get your property repossessed.
Related: Does Airbnb break your mortgage rules?
The advantages of Airbnb for landlords:
- Higher rental yields (typically)
- Outside of the tax rules because Airbnb is run as a business rather than a buy-to-let. In other words, all mortgage interest can be offset
The restrictions of Airbnb for landlords:
- It’s not necessarily a restriction, but landlords who want to let their property be an Airbnb MUST with their lender that there are no restrictions on their mortgage.
- Landlords should be aware if there are local planning restrictions for short-term let properties.
Can I switch back if Airbnb doesn’t go well?
Yes. If you’ve decided to go full steam ahead with Airbnb and set up a holiday-let mortgage, some lenders will allow you to switch (or switch back) if you change your mind. Just make sure this is something you discuss with your lender when deciding on the best mortgage option.
Before making financial decisions always do research, or talk to a financial adviser. Our views do not constitute financial advice.
