Not long ago, the vacation rental industry and the multi-family rental industry could be defined by two very different models: One hosted overnight guests looking to get away from their homes, and the other provided comfortable space for residents to stay inside their homes. But thanks to the quickly-progressing trend of home-sharing and the success of major players in the vacation rental space, like Airbnb, a hybrid model has emerged and opened up realms of opportunity for multi-family properties.
Since Airbnb’s launch in 2008, over 5 million hosts have joined the platform and contributed to the company’s $2.7 billion in revenue over the past 10 years. And whether you’ve hosted or rented a charming cabin in the woods, a beachfront cottage, or the spare bedroom above your garage, you probably haven’t considered an apartment building as your next rental. But according to the National Multifamily Housing Council, an estimated 65% of recent Airbnb bookings were in multi-family buildings, from condos and apartments to even pop-up hotels. The term “alternative accommodation” has taken on new meaning and redefined travelers’ options when hotels aren’t as appealing due to price, location, or trendiness. And for multi-family property owners and property managers, home-sharing provides an additional revenue stream when units are vacant, willing tenants are out-of-town, or during the 6-12 month lease-up period when properties are establishing their roots in a new community. Consumer demand for home-sharing is certainly there – but how can property owners begin the process and take advantage of the trend? Keep reading to see how home-sharing can benefit your business and your tenants, in addition to potential risks you should consider before implementing a home-sharing program.
Models & benefits
There are multiple implementation models available to multi-family property owners and managers for home-sharing; deciding where to start depends on goals and willingness to experiment. Many properties are exploring options during lease-up or dry leasing periods, when occupancy is stagnant and a multitude of units are vacant and unfurnished. Enter pop-up hotels led by companies like WhyHotel, which takes vacant units in multi-family buildings and turns them into furnished, amenitized apartment units for shorter-term rentals. For travelers, this combines the comfort of a hotel room with the space and convenience of apartment units: they have access to an in-unit washer and dryer, a fitness center, and the ability to experience a new city as a local rather than a tourist. WhyHotel operates in popular locations such as Seattle, Houston, and Tyson’s Corner in Virginia, which is in close proximity to Washington, D.C. Zak Schwarzman, an investor in WhyHotel, explains to Forbes the advantages that a home-sharing model like this can offer property owners: “WhyHotel offers developers significant newfound revenue by managing their yet-to-be-rented inventory as short-term hospitality during a building's lease-up period. Who would say no to that?”
In addition to leasing vacant units when occupancy is slow or in its early stages, property owners may also choose to partner with existing tenants to lease their units while they’re away from their apartments for an extended period of time. Similar to the concept of car-sharing (fueled by Turo), this approach allows residents to leverage their units as an additional source of income. Airbnb, one of our integration partners, announced its Friendly Buildings program in 2016, which allows tenants to share in the property’s revenue generated through home-sharing. Of course, this comes with added risks of security and safety on all parties involved, which is why Airbnb includes a strict screening process of potential renters and also offers Host Protection Insurance. For added convenience and protection, property managers can invest in a universal access control system such as RemoteLock, which can create self-expiring access codes for shorter-term rentals on all doors throughout the property. This alleviates the stress experienced on the property manager’s side to replace lost or stolen keys, and it also provides peace of mind for tenants who may be concerned about short-term guests copying keys to their long-term homes.
Learn more about RemoteLock’s integration with Airbnb.
While many multi-family rentals have joined the home-sharing trend, many others are hesitant to offer home-sharing options to renters and/or to residents. Although an estimated 65% of Airbnb bookings occured in multi-family buildings, 43% of property managers have reported shorter-term rentals occurring without their knowledge or their consent. A possible solution to this “black market” of home-sharing could be an incentive program for current residents: Offer rewards, complimentary cleaning services, rental discounts, and revenue share in return for a home-sharing partnership. Home-sharing also requires property owners to pay close attention to local laws and regulations, which may prevent multi-family properties from operating as temporary residences for visitors, and may result in fines and requirements to obtain a state license.
Lastly, COVID-19 has introduced a host of cleanliness and proximity issues in the hospitality industry that extends to vacation rentals and multi-family properties. Ensuring proper sanitation and cleaning measures will be vital to success of home-sharing initiatives, and requiring minimum lengths of stay, such as 7-10 days, can help minimize contact and protect long-term tenants. RemoteLock’s cloud-based platform serves as a solution to track user access – from short-term tenants to maintenance and cleaning teams – to verify rental units are aptly-prepared for residents.
Need an access management system to increase security and appeal for your home-sharing program? Contact RemoteLock today to see how our powerful solution can help enable more sales and increase occupancy.