The well-known home sharing outfit, Airbnb, has recently set up a new venture to include property managers in their network. Airbnb is hoping to expand their Friendly Buildings Program to offer more options for their growing list of consumers, while offering incentives to the building owners.
“We’ve been having a conversation with the multifamily community over the last couple of years,” says Airbnb spokesperson, Chris Nolte. Of course, the real question is what’s in it for property owners that aren’t a part of the company’s grid?
The Price of Information
As property managers well know, one of the most elusive pieces of information that could benefit their businesses tremendously is knowledge regarding rental terms; for example, although many rental property owners don’t allow short term rentals, a sizable percentage of any large building almost certainly has some that are flying under the radar, and costing money in the long-term.
Airbnb keeps a proprietary database of this kind of information, and promises to share it with apartment managers that come in on the deal and open their units to the Friendly Buildings Program. Additionally, Airbnb will hand over a percentage of the income derived from the program to the owners.
There’s a reason everyone has not yet signed up en masse, however. As some have noted – in particular, Rick Haughey, a vice president of the National Multifamily Housing Council – joining the Program exposes building owners to added liabilities and risks from the incoming slew of renters.
The Price of Visibility
Joining the Airbnb program then requires a cost benefit analysis on an individual level. The increased transparency regarding tenants is coveted information that landlords have always sought, and the price for this may at first seem acceptable. All the property owners have to do is allow their units to be used for Airbnb tenants. To sweeten the deal further, there’s a $1 million insurance policy for all landlords who join the Friendly Buildings Program. There are other stipulations – for the prospective tenants – that are tailor-made to protect the landlord’s property; these are presented in the form of a contract for the renters to sign.
Are There Any Takers?
As of late September 2016, Airbnb has managed to secure some of the top apartment management outfits to the Friendly Buildings Program. A poll taken by the National Multifamily Housing Council found that 33% of the 50 biggest apartment owners are amenable to a similar program – with some of these dependent on the character of local regulations as pertains to home sharing. Basically, if their laws allow it, then they are game.
Despite these positive numbers, currently, just 1% of apartment managers now allow home sharing. Industry experts chalk this up to risk; as structured in the present, there’s simply too much uncertainty concerning the mercurial and turbulent nature of local housing laws as pertains to short-term rentals. The really large companies, which operate on a national level and have many units under their umbrella, simply cannot keep track of all the variation, to consider home sharing a worthwhile endeavor.
All-in-all, home-sharing may currently be a case-by-case issue. For property managers that are well versed in local regulations, the liability insurance, tenant transparency and outsourced property policing may well make it beneficial to join Airbnb’s Friendly Buildings Program.
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