Airbnb Exploring Long-Term Rental Market
Rental home service Airbnb allows people to visit cities for short-term stays while living like locals and the company is now investigating the possibility of offering long-term rentals. Airbnb hired consultancy McKinsey and Co in March to determine the feasibility of joining this market.
Short-term and long-term apartment rentals have already popped up in New York City and Arlington, Virginia by WeLive, a partnership between Vornado Realty Trust and office development company WeWork.
Key issues must be worked out
The safety of Airbnb customers is obviously of paramount importance. That’s why the company needs to decide what type of screening process it would use for apartment managers and owners who want to offer long-term rental units, if any at all.
If screening does become part of the process, additional considerations need to be made about how background and credit checks would compare to existing standards for people who don’t use service. Whatever screening mechanisms were agreed upon would also have to be built into the Airbnb website.
Should Airbnb enter the long-term rental market, it will be required to comply with fair housing laws everywhere it operates, which could pose more challenges for owners. For example, a less experienced landlord may not be aware of discrimination laws and protected classes of renters that exist to ensure fair treatment of renters.
Limited longer-term rentals are already available
Airbnb currently offers listings that can be rented on a monthly basis for up to six months at a time. These visits can be classified as sublets or extended stays, but that depends on how the owner of the units reports the rental income to local and state government entities.
If Airbnb commits to offering long-term rentals on its platform, it’s expected that property management companies will start advertising their units there.
Airbnb continues to disrupt the rental industry
Just as ride sharing companies like Uber and Lyft are disrupting taxi services so too is Airbnb making waves in the hotel industry. Home and apartment owners benefit from the service by making money on renting out their spaces, without having to actually invest in real estate.
Airbnb listings can offer renters perks not available in hotels, such as access to a kitchen or extra bathroom. Although room service won’t be available for (potentially) long-term renters who use Airbnb, the service would provide enticing alternatives to current lodging options.
However, the company has stated that it has no current plans to offer long-term rentals and is simply exploring all options, so stay tuned.
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