By Meeghan Fuhr
In fewer than 10 years since its founding, Airbnb has grown its home-sharing platform to more than 65,000 cities and 191 countries. While the company has become the premier marketplace for hospitality services, the multifamily industry has not only been slow to accept it, but has been actively fighting against it.
Although there is push-back from the apartment industry, small-balance multifamily owners can utilize the service to their advantage and earn additional income, and if done responsibly, with relatively little risk.
Property owners and residents alike have concerns about short-term renters inhabiting their buildings causing security issues, crowded amenities and damage to units. Smaller multifamily owners and managers may have an advantage over larger companies because they can more closely manage their units and monitor how the introduction of different factors such as Airbnb impact their communities.
If on the fence about allowing home-sharing services in your properties, it may be a good idea to survey existing residents to measure their openness to it. If there seems to be no appetite from residents, it may not be worth the added effort. However, if residents seem willing to allow and/or utilize home-sharing, it can be a great way to differentiate yourself from your competition.
Before You Do Anything, Check Your Local Laws
First and foremost, it’s important to understand the laws impacting home-sharing in your community. Christy Miller manages four properties with nine units in Denver and had to adjust to the city’s rule limiting Airbnb rentals to 30 days or more. “Prior to [the 30-day rule], there were extreme benefits to using Airbnb because you can make so much more money when renting it out,” Miller said.
However, if compliant with local laws, you can still use the home-sharing service to your advantage, as Miller still finds significant benefit renting out three of her nine units on Airbnb. “I would say that I probably make at least 30-40 percent more doing it that way,” Miller said.
Longer-term rentals of 30 days or more typically bring less risk as well. “Most people who want to rent for that long aren’t coming in for a party weekend,” said Miller, so less issues typically arise. New hosts on Airbnb concerned about risks may find longer-term rentals a good place to start.
Set Your Expectations Up Front
Screening renters is very important and can eliminate the risk of issues before they arise. Airbnb accounts can be set up to automatically accept anyone who requests, or it can require the request be reviewed first. According to Miller, reading the reviews and not basing her decision on the star count alone brings her greater peace of mind.
Jaja Jackson, Airbnb’s director of global multifamily housing partnerships, said setting clear expectations upfront is key. “Hosts can outline specific expectations for the unit and the building (like quiet hours) in the house rules,” he said. Every guest is asked to provide all of their personal information before booking, but hosts can also require guests to provide Airbnb with a government ID before booking their listing as an added layer of security.
Let Your Residents Use Airbnb Using Your Rules
The Friendly Buildings Program created to bridge the divide between the home-sharing company and landlords is a great way to allow residents leasing your units to utilize Airbnb under your desired rules. “By signing on to the Friendly Buildings Program, multifamily owners can gain transparency and control over Airbnb activity in their buildings, while also receiving a portion of the revenue. This adds to a building’s bottom line, while also benefiting residents who want to share their homes,” said Jackson.
If Worst Comes to Worst…
According to Jackson, there have been more than 260 million guest arrivals in Airbnb listings to date, and negative incidents are extremely rare. However, in the off chance that an issue does arise, Airbnb offers some protection.
The Million Dollar Host Guarantee covers listings for up to one million dollars in damage and is free for all hosts and every single booking. “In addition, our Host Protection Insurance provides home sharing hosts with additional protection against third party claims of property damage—including in common areas of the building—or bodily injury up to $1 million,” said Jackson.
Set Yourself Apart and Earn Additional Income
Though there has been significant hesitation from the multifamily industry, small-balance multifamily owners have the opportunity to utilize Airbnb to add to their bottom line. “By supporting hosting activity, multifamily owners can make their property stand out in crowded markets, encourage current tenants to renew, and market their brands to Airbnb guests who may be looking for a new home,” said Jackson.