People who launched mini-empires of Airbnb rental properties are experiencing extreme financial hardship as a result of the coronavirus pandemic, reports The Wall Street Journal. These are people who bought or leased residential property with the sole intention to list them on Airbnb. In March alone Airbnb lost $1.5 billion in canceled bookings.
From The Wall Street Journal:
Smaller players have spent hundreds of thousands of dollars each buying homes for short-term rentals. Jennifer Kelleher-Hazlett of Clawson, Mich., spent about $380,000 to buy two Michigan properties in 2018. She said she and her husband cashed out their financial investments and borrowed $100,000 from employers to furnish them.
The 47-year-old expected to net up to $7,000 a month from Airbnb after mortgage payments, supplementing her income as a part-time pharmacist and her husband’s as a schoolteacher. Before the virus struck, the couple was considering buying more homes. Now, they can’t make mortgage payments because no one is booking, she said. “We’re either borrowing more or defaulting.”