Real estate developers seeing the benefits of short-term multifamily home-sharing
United States: The National Multifamily Housing Council (NMHC) estimates around 65 per cent of recent Airbnb bookings have been in multifamily buildings such as apartments, condos and pop-up hotels.
It comes as part of a growing trend where many long-term hosts are renting out their units on Airbnb anyway as the NMHC found that 43 per cent of property managers have had short-term rentals occur without their approval.
Multi-family developers and property managers are taking a different approach with regards to pop-up hotels, like WhyHotel.
Clelia Peters, founder of MetaProp and an early investor in WhyHotel, said: “WhyHotel works with developers during the lease-up period, when often a significant portion of units lay fallow. It takes those fallow units and basically turns them into furnished, amenitised hotel units.”
Peters said approaches like this, which blend hospitality with residency, have been picking up steam as of late.
She said: “There has been a proliferation of these models — things that exist in the hybrid space between the existing residential leasing models and Airbnb. So, it’s hyper-amenitised, often furnished units that require a shorter term commitment. We’re seeing more and more models like this popping up.”
Stay Alfred uses a similar model which offers an upscale short-term hospitality experience in vacant apartment units in prime locations. As soon as those units are identified, Stay Alfred furnishes them, rents them out and even staffs the building.
There are also models like that of YOTELPAD Miami, which takes a proactive approach to the inevitable leasee-turns-landlord dilemma. The downtown condo community is the first in the city to allow short-term rentals without restrictions.
Developer of YOTELPAD Miami, David Arditi, said: “We’ve heard many stories of residential buildings having to deal with owners who are trying to skirt local legislation by renting out their units on a short-term basis.
“They are typically not allowed to do so given condominium association and zoning restrictions. We thought, why not do something that addresses this head on and gives people the option to do what they are asking for,” he added.
It also represents a major marketing ploy for the brand, as it provides potential condo buyers with an additional revenue stream and more flexibility in their properties.
Arditi said: “We believe the short-term rental option was something the market was seeking but was not being addressed adequately. The profile of buyers in the Miami market is largely non-local.
“Whether they are absentee owners or investors, there’s a strong desire to have the ability to rent units on a short-term basis. It creates maximum flexibility for the owners.
“People can use their apartment every day if they want or can rent it out 365 times a year, and everything in between,” he added.
Pillow, a start-up based in San Francisco, is another example of how multifamily developers are leveraging the short-term rental trend. The model essentially amenitises short-term renting, making it a perk for both landlord and residents.
Using Pillow’s tools, property managers can completely control all short-term rental hosting in their buildings, share the revenue, ensure local regulatory compliance and insure against damages. San Francisco’s largest multifamily developer Veritas Investments also announced it would start using Pillow last year.
The entrance into the short-term rental market of multifamily spaces could be a sign of things to come if Airbnb gets its wish in the coming years.
Last November, the platform announced plans to create APIs that would allow landlords, property managers and multi-family operators to integrate directly with the Airbnb platform. That would mean direct management of bookings, payments and more.
Furthermore, Airbnb also has the Airbnb Friendly Buildings program, which provides revenue-sharing options for multifamily residents and their landlords/property owners.