Due to the immense popularity of the sharing economy, apps like Airbnb and VRBO have completely changed the way people locate and secure short-term rentals. Short-term rentals—also known as vacation rentals—are defined as homes or rooms in homes that are rented out for less than 30 days. These rentals provide a sense of home to their renters, as well as access to necessities not otherwise found in a short-term rental setting such as fully-equipped kitchens and in-unit washers and dryers. Combine this with the fact that most rentals are conveniently located near desirable, vacation-worthy city centers, and you have the perfect formula for a massive phenomenon.
Currently, Airbnb has over 6 million listings in 100,000 cities and 191 countries with 500 million cumulative guest arrivals. With numbers like these, the short-term rental sector is being described as a “gold rush”— with no sign of the momentum slowing down anytime soon. Originally, short-term rentals were marketed towards the “budgeted traveler,” the average American on their bi-annual vacation, who was looking for a low-cost alternative to the pricier hotel or resort. While there are still plenty of affordable options available on the app – with the average rental amounting to 80-dollars per night – it’s now also saturated with an array of luxury homes and villas worthy of A-list celebrity stays.
Despite the opulence, short-term rentals procured through these apps remain a cost-efficient option for travelers, business professionals, and other short-term renters. In fact, 53 percent of users choose to utilize Airbnb’s services due to price point, and an astounding 93 percent are left satisfied with the rental housing service. With an average of 2 million people continuing to utilize Airbnb each night, it’s about time your apartment community offered short-term rentals, alongside your long-term options.
These platforms have already provided extra income for homeowners, whose goods don’t accrue value by sitting idly, and in exchange, the buyer receives all the benefits of short-term ownership without the long-term costs. By acting as an intermediary between sharing consumers and taking a percentage of all transactions, sharing economy apps have built a lucrative enterprise, which is expected to grow into a $335 billion industry by 2025. So, why shouldn’t the multifamily industry take part in this profitable development while the getting is still good?
After all, the popularity of short-term rental apps has been spearheaded by Millennials and Gen-Z — two generations who grew up intuitively using the Internet as an avenue for just about anything, whether it’d be shopping or socialization. With these two generations also forming the largest demographic of modern renters, our industry must cater to their desire to live a more mobile, connected lifestyle without any insignificant material items in tow.
Airbnb has already set up a webpage dedicated to sublets that extend beyond the typical, short-term stay and range from 28 days to six months. Though Airbnb’s sublet listings are vast, most stem from individual homeowners or landlords, who rent out their individual properties and/or units. So far, these longer-term Airbnb rentals have not affected the big players in the multifamily market, especially those with 50-plus units. But, the keywords here are so far.
The National Multifamily Housing Council estimates that 43 percent of Airbnb bookings were already taking place in multifamily buildings, like apartments and condos, without the permission of property managers. Therefore, the multifamily industry must realign its stance with short-term rental platforms—joining the fray, since beating them is next to impossible. While the demand is there, we recommend that you take what is rightfully yours.
Some multifamily properties, such as 1808 Good Latimer, a mixed-use building in Dallas, have already thrown their hat into the ring, listing their property amongst the ranks of Airbnb’s extended short-term rental options. The community has set aside two units at the property specifically for short-term rentals, which can last from a few weeks to a couple of months. Since Airbnb has already developed the technology appropriate for these transactions, the property manager and leasing agents of 1808 Good Latimer do not have to concern themselves with marketing, leasing, or other transactional tasking associated with the traditional apartment rental process. Instead, the Airbnb app handles it all for them, acting as its own leasing agent of sorts, allowing multifamily professionals to pursue their normal workloads.
Whether it’s through Airbnb or other blossoming apps, such as WhyHotel or Stay Alfred, it’s becoming clear that the residential space has been merging with the hospitality industry for quite some time. A hyper-amenitized, furnished hybrid space between the apartment and hotel is what short-term renters are seeking. By leveraging your property using next-gen hospitality technology, you can transform a lifestyle trend into a substantial method for increasing your community’s cash flow, lowering operational costs, and boosting brand awareness.
