Landlords Get Innovative to Fill Vacancies
Turnkey rental solutions are a viable alternative and supplement to traditional tenancies. Be sure to check local laws and lender requirements first, though.
With both the National Apartment Association and the National Multifamily Housing Council predicting that demand for apartments will soar over the next decade-plus, property owners throughout the U.S. are seeking innovative ways to set themselves apart in an increasingly competitive landscape for new development.
For owners with vacancies that need to be filled, there are many options to minimize the time that their rental property sits empty. In the coming months and years, landlords that want to optimize occupancy and maximize income must pay attention to three rapidly emerging trends:
“Co-living” apartments allow landlords and building owners to give renters the option to double- and triple-up with roommates in shared suites. Companies such as Ollie, WeLive and Common are now partnering with developers on co-living projects in markets across the country. This provides on-the-move millennial renters with access to convenience, comfort and community.
While the prospect of renting out your building this way is enticing, there are some cities, such as New York, where it is illegal to allow unrelated adults to live together in single room occupancy, co-living suites. Securing funding for co-living as a landlord is also difficult. Banks need the certainty of a proven market when providing construction loans, and generally won’t consider co-living when filing loans for planned apartment communities. Regardless, modern renters enjoy the hassle-free online rental processes and fully-connected environments these co-living options offer. So, if a property owner can clear the legal and financial obstacles, the rewards are plentiful.
While Airbnb has mainly served thrifty tourists in the decade since it was founded, the short-term leasing service has also attracted its fair share of business travelers. Companies can save money on short-term corporate housing costs that can instead go to other expenses, like conferences, meetings and retreats.
Online marketplaces such as Airbnb and CouchSurfing (among others) can help landlords achieve 100% occupancy and steady cash-flow, but it’s important to understand that they bring with them certain challenges that may land you in court. In New York, for instance, it is currently illegal to lease an unoccupied apartment for fewer than 30 days, and City Hall has been going after New Yorkers who use Airbnb and similar sharing services to do so. Lastly, managing a rental property takes a lot of time and effort, especially when it comes to short-term bookings. You’ll need to deal with check-in and check-out scheduling, maintenance issues, advertising, guest requests and complaints, etc.
Fully Furnished Apartments
Increasingly, owners are realizing that the property mix of a building must include furnished apartments. Forward-thinking landlords have learned that they can offer fully furnished apartments on a medium or extended-stay basis, as an easy and cost-effective solution for leasing unoccupied units. For landlords and property management companies, partnering with services that offer these living options is the best bet to ensure full occupancy for several years. Furnished apartment providers, like blueground, lease multiple units before they hit the market, with the aim to continue leasing them for many years. The apartments are then outfitted with modern, practical amenities and services, such as cleaning and laundry, that can be accessed through an app. Ultimately, extended-stay services like these offer peace of mind. Even if there is no tenant during a specific period, companies such as blueground pay the rent in full.
By Alexandros Chatzieleftheriou is the founder and CEO of blueground, a hospitality technology company that leases apartments in the most sought-after areas and buildings to renters looking for a turnkey living solutions.