Airbnb in Multifamily: Friend or Foe?
- Oct 18, 2016
by Donald Davidoff
A couple of weeks ago, Airbnb announced its Friendly Building program. By applying to join, multifamily owners can control which units are eligible for short-term rentals as well as terms such as lengths of stay, number of nights, etc., and the landlord will earn 5 to 15 percent of the tenant’s revenue on any rentals.
Then, at the MFE Conference in Las Vegas, I met an owner from Kansas City who was testing renting two units to a small business that placed units on Airbnb. This business was paying a 60 percent premium for those units on a 12-month lease.
With all of this new activity, I thought it might be a good time to discuss the opportunities and potential challenges with Airbnb in multifamily. There are three ways in which apartment owners can participate in the sharing economy:
1. Allow residents to sub-lease through sites like Airbnb. This is what the Friendly Building program is all about.
2. Allow businesses or individuals who have no intention of living at your community to lease apartments (at a premium) that they will then sell on sharing sites.
3. Participate directly by furnishing one or more units and marketing them for short-stay through Airbnb.
These options each come with their own set of considerations. I’ve sat in on at least four industry conference panels or presentations, and to read a summary of the concerns that I’ve heard, click this link.
Donald Davidoff is president of D2 Demand Solutions and focuses on bringing people and technology together. A former senior executive at Archstone and Holiday Retirement, his practice covers pricing, sales, marketing, leadership development, customer experience and BI.