Airbnb is a website that connects people looking for a place to stay with people who have a spare room, home, or other space. Airbnb can be a great way to make extra money, but it also carries many risks. Here are some things you need to know before signing up for Airbnb.
Why you should buy Airbnb stock
Over the last two years, Airbnb has become a popular way to make money while traveling. It can make it easy to stay with a local or even have a place to stay while you’re staying at an expensive hotel.
There are two types of revenue investors can look at when they’re trying to value Airbnb: gross bookings and gross bookings growth.
Gross bookings are the amount of money it earns from a single trip. For Airbnb, the breakdown of its revenue by type of trip is as follows:
while the market is only interested in gross bookings growth, the company is focused on all three.
Airbnb is still a relatively young company. It was founded in 2008 and listed on the New York Stock Exchange in 2015. But in terms of its history, Airbnb is not a new entrant. It has roots in the sharing economy, having been in business for 10 years now.
Airbnb was founded by Brian Chesky, Joe Gebbia, Nathan Blecharczyk, and Nathan Blecharczyk. The original name of the company was Spacemob. While they were in college, the three co-founders helped friends find places to stay.
They quickly realized that homeowners could make a lot more money by renting out extra space to travelers.
When the founders were looking for a name for the company, it didn’t take long to come up with one. People frequently stay in “a space in your house,” which is exactly what Airbnb means.
What are the risks to investing in Airbnb?
Airbnb has had its fair share of problems. The startup received nearly $2 billion in venture capital in 2014. That’s a lot of money for a company with just $4.3 billion in annual revenue. However, Airbnb raised that money from big names, and the company has been trying to make its mark on the world.
In the same year that the company raised a massive amount of funding, Airbnb was hit with a class-action lawsuit that alleges the company has damaged its tenants’ credit by listing their information on Airbnb.
Airbnb also had issues getting started. It had to go through 13 cities before it was allowed to operate in Portland, Oregon legally. Airbnb, the New York Times reported in April 2014, began to see its growth slow.
How can you minimize the risks?
Airbnb is popular among people who want to generate extra income by renting out their extra bedroom or even their entire home. For instance, someone might offer their extra bedroom on Airbnb and do so from time to time.
However, if there’s an emergency and the homeowner needs to be at the hospital, Airbnb hosts won’t always be able to make it home and will need to depend on other accommodations. There have also been many cases in which renters failed to pay or damaged the home, which could result in hefty fines.
Even if the Airbnb host is in a situation where they can no longer rent out their room, Airbnb is not a long-term solution.
Like any online business, Airbnb isn’t guaranteed to be successful. But there’s a lot to like about it. Despite the risks, it could be a profitable investment for you.
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