A decade ago, most people hadn’t even heard of Airbnb. The company began in 2008, and it blossomed into a revolutionary concept/business model. However, it took some time to catch on. Staying in someone else’s house or apartment while traveling? Why would you do that when you could relax in a luxurious, comfortable hotel?
Nowadays, Airbnb is a staple of avid travelers, nomads, foreign workers, and even locals. It’s completely changed the face of the tourism, vacation rentals, hospitality industries, and as far as we can see, the popular brand will likely be around for many years to come.
Not only has Airbnb drastically changed how people travel and book their lodgings, but it’s also made some big waves in the world of real estate. Communities and property owners have recently stepped up to talk about how the company has impacted their world. Some of the effects have been profitable. Others, not so much.
Let’s talk about some of the major changes Airbnb has ushered in for apartment complexes.
1. People Are Renting Apartments to Post on Airbnb, Not to Live In
In places where tourists are common, an interesting trend has arisen since the boom of Airbnb. Many people are renting apartments not to live in, but to post on Airbnb and make a little extra money.
Take a quick search on Google and you’ll find articles like “Making Money With Airbnb (Over $10,000 Per Month!).” Surprisingly, many people make a viable income with this new form of tourist accommodations. As long as you have space to lease and the permission of the property’s owner, then you can turn a quick profit by conducting short-term leases with visitors or even locals.
Now, when you walk by an apartment complex in a place like New York City, it’s quite possible that one or many of the units are rented out to visitors – at least part-time on Airbnb. There are more than 17,000 listings in NYC alone, which has led to a great deal of discussion on the city’s short-term rental laws and apartment complex contracts.
2. Landlords and Property Managers Have Changed Their Contract Stipulations
At first, there were very few restrictions as to what residents could and could not do when it came to renting their apartments on Airbnb. Now that the service is popular around the world, more and more landlords are making efforts to control what their tenants do with rentals.
Although legal restrictions on short-term home rentals vary from location to location, landlords can also impose their own restrictions on how their properties are used. Now, if you want to lease your apartment through Airbnb, you’ll need to carefully read through your rental agreement. Many contracts now prohibit short-term rentals and sublets, unless the landlord’s permission is obtained well in advance.
The punishment for leasing on Airbnb without permission from the landlord? In many cases, it’s an eviction.
3. Rent Prices Are Increasing in Big Cities and Popular Tourist Destinations
The simple math is that when there are more Airbnbs in a location, the increase typically coincides with a hike in rent prices. Why? A study conducted in Boston found that if Airbnb can make short-term rentals easier for people, including local residents, rent for long-term apartments would go up.
Airbnb may be targeted at out-of-towners, but locals have certainly taken advantage of the business opportunities. Cities only have so much available housing, so the more apartments that are dedicated to Airbnb rentals, the less there are available for long-term rentals. More demand and less availability lead to higher rent costs.
Because Airbnb, among other short-term rental services, is making such a direct impact on local rentals, policymakers around the world are trying to figure out how they’ll deal with the problem. Many are looking to regulate short-term rentals to help stabilize rent costs and provide more housing for local residents. For instance, in Hawaii, legislators have recently approved a plan to tax Airbnb rentals more than regular apartment complexes.
This will certainly change how tourists stay on the Hawaiian Islands, and it will also make a difference in how much rent costs as well as how landlords decide to use their properties. If it costs more in taxes to rent short term, perhaps more long-term living options will become available to locals.
Airbnb has made travel more affordable and comfortable than ever for millions of travelers around the world. However, it’s clear that this new trend of short-term rentals has made heavy impacts on big cities, apartment complexes, and property managers.
Over the next few years, we can expect more and more places to start analyzing their short-term rental regulations to keep rents from fluctuating with the ebb and flow of tourism (and Airbnbs). We may also see more taxes and fines put in place to limit the number of short-term rentals.
No matter what happens, one thing is clear: Airbnb hasn’t just changed the way we vacation; it’s changed the way we rent our homes, too.
Author Bio: Eric D. Davis is the Founder of Davis Property Management; we help property managers and potential tenants looking for Seattle Property Management and Maintenance services. We have been the front-runners in providing best-in-class property management services in the Puget Sound area.