Airbnb’s platform usually has two updates each year. One in the Summer and one in the Winter. This year’s Winter update came with a lot of cool features, like a much-needed button that allows potential guests to see the total price for their stay with all the fees included.
However, one piece of news was rolled out that I don’t believe enough people are talking about. Airbnb will now allow renters who live in apartment complexes to rent out their units. Many of these units are located in large cities, where the STR industry faces the stiffest regulations.
What Is Airbnb’s New Campaign?
Airbnb launched a new campaign partnering with apartment and condo buildings to convert some units into short-term rentals. Currently, there are about 29 cities that have these operations set up throughout the U.S.
Airbnb is not operating the day-to-day operations of these units. They are leaving that to people who are looking to become hosts. They are allowing people to sign up for a specific property they are interested in becoming a host for. If the potential host is selected, they can rent a unit in the building and sublease it on Airbnb. This is rental arbitrage but with the help of Airbnb.
For people who don’t know what rental arbitrage is. Rental arbitrage is where you approach an owner looking to rent their property long-term (say 12 months or more). Someone can legally go to that owner, rent the place from them for the rent they are looking for, then sublease the property.
My Thoughts On The New Program
There are companies out there that have been doing this for the last 3-4 years. They’ve been going to the owners of an apartment complex and renting out the entire building or multiple buildings. In turn, they’ve essentially converted the entire apartment complex into a hotel listed on Airbnb.
The tricky part about doing something like that is having the financial backing and experience to convince owners that you are the right person to take over their property. With this program, Airbnb has gotten rid of the difficult part of convincing owners to rent out their buildings for STR purposes.
I think this is a phenomenal program because it does two things:
- It allows people to become hosts and real estate investors that do not have the financial resources to purchase an STR. It will also act as a gauge for people who may not know if STRs are the right investment class to enter. Over the past six years, I have met many people who built STR empires by starting with a single sublease.
- It helps Airbnb’s image. I guess they will be using these cities as a model for areas with strict STR restrictions. Using these properties as case studies, Airbnb can show city and county officials that STRs have worked in metro cities.
