Compared to Airbnb, PadSplit offers more revenue and fewer property management expenses. It’s a win-win.
With the changing landscape in residential real estate investing and the rise of the sharing economy, buy-and-hold investors must pivot their traditional strategies to alternative rental platforms such as PadSplit vs Airbnb. These two exit strategies have become the top choices for many investors due to rising interest rates and low inventory.
As an account executive at PadSplit, I’ve spoken with a record number of hosts that leverage PadSplit as a way to stop the hemorrhaging losses of their underperforming short-term rentals—enabling them to earn more while reducing the amount of management needed for their real estate investments and giving them the flexibility to truly enjoy life on their terms through financial freedom and, more importantly, time freedom.
Let’s compare the property management associated with PadSplit vs. Airbnb to help prospective hosts make an informed decision on which platform aligns best with their investment goals.
Introduction to PadSplit and Airbnb
PadSplit
PadSplit is the nation’s leading platform for shared housing, providing affordable and flexible housing solutions. Through the Padsplit model, underutilized space is converted into additional rooms. It generates more revenue for investors and creates more supply for the affordable housing network for the workforce. It’s a win-win.
The PadSplit marketplace aims to serve the mid-term rental market by offering high-quality, furnished weekly room rentals to working-class individuals. Individuals who book a room on the platform are referred to as “Members” due to the legal structure, which minimizes liability for the host.
PadSplit offers a number of benefits to property owners, including:
- Higher occupancy rates: PadSplit typically has higher occupancy rates than short-term rental properties, as it is solving a need for affordable housing.
- Less turnover: The average stay for a PadSplit member is about 6-8 months. Unlike short-term rentals, PadSplit offers lower-cost rentals, positive credit reporting, and a platform designed for co-living. This includes a built-in rating and communication system.
- Reduced management: PadSplit handles most management tasks, such as marketing, member screening (background check, income verification, and eviction report), payment collection, and 24/7 member support via email, phone, and chat.
Airbnb
Since it was founded in 2009, Airbnb has grown to become the leading platform for short-term rentals. Their platform allows homeowners to rent out their property to guests for short periods of time (typically less than 30 days).
Although earning potential can be higher than traditional long-term rentals, many investors are experiencing the fallout of the “AirbnBust” due to a saturation of homes on the platform and increased regulation in metropolitan cities such as New Orleans, Dallas, and more.
Airbnb offers a number of benefits over long-term traditional rentals, including:
- Shorter stays: Airbnb hosts can charge based on a nightly rate, enabling them to serve those in need of short-term rentals and generate more revenue than a traditional long-term rental.
- More flexibility: Airbnb property owners have more flexibility with their properties, as they can rent them out for as long or as short as they want. They also can block out dates for their own personal use.
- Diverse Guest Base: Airbnb hosts cater to a broader range of guests: vacationers, traveling professionals, or even short-term stays for relocation or work projects.
Differences in Property Management and Earnings
The property management expenses for PadSplit vs Airbnb can vary depending on a number of factors, including the size of the property, the location of the property, and the amenities offered. However, in general, PadSplit will usually have lower property management expenses than the Airbnb marketplace.
Here is a table that compares property management for PadSplit vs Airbnb:
- Occupancy Rates:
- PadSplit properties may have more stable, longer-term stays, resulting in lower turnover-related costs.
- Airbnb properties often experience higher turnover, potentially leading to more frequent cleaning and maintenance expenses.
- Revenue Potential:
- PadSplit is best suited for standard single-family homes (3-5 bedrooms) in major metro cities. We offer more consistent and higher monthly rental income with the room rental strategy. There is also significantly less seasonality due to the need for affordable housing.
- Airbnb will typically outperform PadSplit with high-end properties (5+ bedrooms) in vacation destinations that offer attractive amenities for the area. It’s important to consider the high seasonality with short-term rentals and the high capital requirement for acquisition.
- Management Intensity:
- PadSplit typically requires less intensive day-to-day management but may involve longer-term relationship management with members.
- Airbnb requires significantly more active management, including frequent communication with guests, handling check-ins and check-outs, and managing reservations.
Similarities in Property Management
Although there are stark differences between the two platforms, there are a few key similarities that investors should be aware of regarding the host’s responsibility for property management. Below is a list of activities the host will be responsible for on both platforms:
- Furnishing the property.
- Setting pricing.
- Establishing the house rules and providing move-in/move-out instructions.
- Monthly utilities and contract services such as lawn care, pest control, etc.
- Any maintenance items or capital improvements to the property.
- Filing for eviction.
Should You Go With PadSplit or Airbnb?
Ultimately, the choice between PadSplit vs Airbnb depends on the property owner’s real estate investment goals, preferences, and the nature of their property. Investors who own or plan to buy a traditional rental (3-5 bedrooms) in a major metro market should consider PadSplit as a potential exit strategy to maximize earnings.
On the other hand, investors who own or plan to buy high-end properties (5+ bedrooms) with amenities should consider Airbnb. Keep in mind that you will likely have a greater capital requirement with this strategy and be subject to greater swings in your monthly revenue due to seasonality.
Find Out How Much You Can Earn with PadSplit
Every real estate opportunity is unique and requires a detailed analysis of the property, location, and, most importantly, the earning potential. The PadSplit Growth Team is committed to serving investors in achieving their growth goals.
Book a meeting with the author of this article, Emanuel “E” Premate, to experience the difference PadSplit can make in your real estate investing.
Not yet ready to book a meeting but interested in learning more about PadSplit vs Airbnb? Join us for an upcoming panel event that will be held in partnership with the Jacksonville Real Estate Investors Association. Details below.
Diversifying Your Portfolio with PadSplit and Airbnb Panel Event
Saturday, January 6th – 11:30 AM – 2:00 PM
1819 Ionia Street, Jacksonville, FL 32206
Sign Up – Free to join, but RSVP required
Learn how PadSplit compares to Airbnb.
About the Author – Emanuel “E” Premate – PadSplit Account Executive
Emanuel Premate, better known as “E,” is a member of the PadSplit Growth Team as an account executive and is based out of Jacksonville, FL. E was a former corporate account manager at GE Healthcare who pivoted into real estate investing. He has experience as a short-term rental host and previously worked as a Sales Executive for the nation’s largest vacation rental management company, Vacasa.
As a real estate investor and corporate sponsor of the Jacksonville Real Estate Investors Association, E strives to go above and beyond for his clients to maximize their earnings through a consultative approach focused on analysis, strategy, and execution.
