Apartment Landlords Are Hopping Into Bed With Airbnb For Long-Term Rentals
2017-5-11 11:05:28, Julia Bunch bisnow.com
As Airbnb continues to jump over regulatory hurdles, the home-sharing giant is working to expand its long-term rental business -- which is fraught with hurdles of its own. The major landlords that could really bring credibility to its long-term rentals are the same landlords that, so far, have been the most resistant, Yardi Matrix director of business intelligence Dough Ressler said.
Airbnb already has a
landing page dedicated to long-term rentals and sublets that last 28
days to six months. Fully furnished abodes can be rented monthly in more
than 65,000 cities worldwide. Renters pay for their stay, which typically
includes all bills and utilities, through Airbnb’s online portal monthly.
Though Airbnb's long-term
listings are vast, most stem from individual homeowners and tenants renting out
their own properties and units. So far, these longer-term rentals have not
affected the big players in the multifamily market, especially those with
50-plus units, Ressler said.
“We see limited impact on
the apartment market because I think Airbnb is still trying to get a strategy
that scales,” Ressler said. “I think they’re determining how to effectively
scale and ethically maintain and provide rentals for apartments with 50 units
and above.”
A
Leasing Agent For Small Apartment Owners?
When thinking
about the economics involved in renting units for the long term using a
third-party rental service, Steve Kinder said there is value in using
a social platform like Airbnb.
Kinder, who owns a
mixed-use building in Dallas with 11 live/work units that will deliver in June,
plans to use one or two of the units at his 1808 Good
Latimer property exclusively for Airbnb rentals that could last from weeks
to months. Kinder found Airbnb's long-term rental options compelling for
two reasons: First, his 1808 property, which is anchored
by co-working concept Good Work, has community building at the heart
of its mission.
“The value of Airbnb is that it's a social
network. When somebody chooses to go through Airbnb — a brand with credibility—
it helps build an audience,” Kinder said.
Airbnb rentals at 1808
will come with a day pass to Good Work, and Kinder is toying with the idea of
including other add-ins, such as a Turo car rental.
Secondly, Kinder said his
busy schedule does not afford him time to market and handle transactions like
he would wish. Because of this, he said he likes the fact that Airbnb handles
transactions and acts as an off-site leasing agent.
“For a guy like me with
multiple ventures and companies, [to have] Airbnb doing the heavy lifting and
making a margin off my rentals, I’m willing to do that.”
Unlike Kinder, for a landlord that already has
a network of leasing agents and on-site staff, renting units monthly through
Airbnb adds to the overhead. But Ressler thinks as jobs continue to
automate, landlords will catch on that Airbnb could be an alternative to
in-person staff.
"They might think
'those leasing agents are costs, and I could transfer that business function to
Airbnb,'" Ressler said.
Craigslist Competition
Airbnb enlisted consulting firm McKinsey &
Co. to research the long-term rental market back in March. Such an
expansion would put Airbnb in competition with Craigslist’s housing
section, which includes categories for sublets and temporary housing.
McKinsey was expected to
present findings to Airbnb in April, but Airbnb has yet to publicly comment on
these reports.
At present Ressler said he
only knows of landlords with fewer-unit apartments that market and rent empty
units through Airbnb, both for the short and long term. He estimated within the
next 18 to 24 months, more major landlords will get involved in long-term
rentals through Airbnb.
“I think the five- to 49-unit properties will
be the first guys over the fence, but they’ll eventually all see that it makes
you money and [doesn't] cost you money," Ressler said.
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