Short-Term Rentals Offer Multifamily Operators New Opportunities

The apartment industry has been no stranger to supplementing the rent roll by offering short and long-term rentals over the years. Owners and managers have stuck their toes into corporate housing, some providing designated blocks of units to accommodate executives and new hires at local companies and others working on a per-business basis to provide space as occasionally needed. The recent surge in demand for short-term rentals outside of the hotel experience has created new opportunities for multifamily. New players and strategic partnerships have entered the market ranging from updated corporate housing models to short-term rental platforms similar to those of Airbnb and HomeAway, platforms that are capitalizing on a growing housing vertical. How to incorporate short-term rentals into property operations is a question that multifamily executives are asking, as evident by conversations in November at NMHC’s OpTech Conference in Orlando. Talk is coming at a time when business and vacation travelers are seeking hotel-like experiences away from mainstream hotels in numbers that outpace supply. Capitalizing on a prime opportunity to fill revenue gaps Kigo Senior Vice President Matthew Hoffman says that multifamily operators have a grand opportunity to fill revenue gaps left by vacancies based on the industry average by marketing toward consumers seeking short-term rentals, whether for a corporate stay or travelers. Typically, average vacancy rate is 4 to 5 percent, which translates to eight or 10 units on a 200-unit apartment. Operators can capture lost rent for those unfurnished units sitting on the market by furnishing and marketing them for short-term rental at a ripe time. “Travelers are looking for hotel-like accommodations and supply is not keeping up with demand,” he said. “Demand has outpaced supply in the U.S. travel market for the last three years and it’s continuing. Taking vacant units and converting them to short-term re...