MULTIFAMILY FOCUS
AIRBNB TRENDS
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4 Overlooked Options for Multifamily Investing NO LONGER ARE YOU LIMITED TO TRADITIONAL APARTMENT RENTALS.
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oday, a force of which you may not even be fully aware is shaping and redefining landlord-tenant relation- ships: Airbnb and the short-term rental phenomenon. Love Airbnb or hate it, but the company (and those like it) are a force that all property managers and owners need to understand to establish the best policies for your specific property. Here are four “unconventional” multi- family trends emerging in 2018 as a result of the prevalence of short-term rentals: • The Airbnb Apartment Complex • Landlord vs. Airbnb • Landlord vs. Tenant vs. Airbnb • Corporate Housing Expansion Let’s explore these trends in a little more detail: Airbnb. Traditionally, landlords have resisted short-term subletting because it increases wear and tear on the property and can, if improperly implemented, lead to a loss of security on the property. However, a permissive multifamily prop- erty can attract high-paying tenants and charge premium rents (in certain attractive destinations). Some opt to provide special services for short-term tenants in exchange for professional behavior on the part of the original lessee subletting the property. TREND #2 LANDLORD VS. AIRBNB In landlord-Airbnb conflicts, the landlord T by Kimberly Smith TREND #1 THE AIRBNB APARTMENT COMPLEX An Airbnb apartment complex permits tenants to sublet their properties through
Alert: Lodging Tax and Legal Limits. Lodging taxes are fees state, county, and city governments may require you to collect on your short-term rentals. They may be considered your responsibility if your tenants fail to collect them. Also, many cities have opted to limit rental terms of less than 30 days and require all furnished, short-term rentals be registered. Even if you are not directly using Airbnb but rather permitting your tenants to do so, you may still be held responsible for abiding by these regulations.
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is losing in the court of law. Denver based Aimco, one of the largest residential land- lords in the U.S., sued Airbnb last year over tenants illegally subletting their rentals. A federal judge in Los Angeles recently ruled in favor of Airbnb, saying the current laws protect online service providers from liabili- ty for the content users post. This means the dispute is between landlords and tenants, not landlords and Airbnb, and Airbnb is not responsible for tenants disregarding your subletting rules and preferences. TREND #3 LANDLORD VS. TENANT VS. AIRBNB If you want to avoid short-term sub- letting in your property, you do have that right. However, you must have the right verbiage in your lease. Review your long- term residential lease to ensure you have a strong “no subletting” clause that stipulates what steps and fines will be assessed if the clause is broken. For example, one landlord in New Orleans had a tough time with sublets during Mardi Gras. As a preventa- tive measure, he began listing the option of weekly visits in his leases so he could regularly verify the correct occupant.
TREND #4 CORPORATE HOUSING OPTIONS ARE MORE PROFITABLE THAN EVER Love the higher rents associated with short-term rentals, but feel less affection for Airbnb (or live in an area that does not permit these rentals)? Many apartment and condo owners find offering some units as furnished, corporate, monthly rentals is a great option for their property. A corporate rental is usually rented on a short-term basis to a professional living away from home for multiple weeks, a displaced fami- ly in the wake of a natural disaster, or even to families looking for the perfect new home and living on a corporate housing allowance while they relocate. Corporate housing allows multifamily investors to gain that increased rental revenue while still maintaining a level of quality control. •
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Kimberly Smith is the founder and CEO of AvenueWest Corporate Housing, a full-service property management pro- gram that is available across the United States. Visit www.AvenueWest.com for more details.
thinkrealty . com | 59 National Real Estate Insurance Group is the nation’s leading agency offering coverage options for real estate investors across the country. Our lineup of products includes: REIGuard™, LandlordGuard, PMGuard, TurnkeyGuard, LenderGuard, and CommercialGuard.
58 | think realty magazine :: march 2018
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