There is a lot of buzz regarding Airbnb exploring a strategy to enter into the long term rental space. While the company has officially taken the position that they are examining different parts of the market, the possibilities that may exist if they enter the space has created quite a stir.
Some big questions surrounding what type of impact this could have on the long term rental industry, tenants and landlords:
- What does this do to long term rental rates?
- Could the Airbnb model have an impact on market rents where the lease requirement is 90 days or more? There are mixed reviews on this as some believe that the market for a long term lease will be unchanged, or better put, there is a market for short term leases which has its own unique principles, and a long term lease scenario that has its own market. Others believe that an Airbnb presence in the long term market will bring their short term lease demographic with them and alter the market for a long term lease. I still see two distinct markets at play here but the lines could be more blurred as there is bound to be at least some level of crossover as the labor market will see more remote workers and contractors into the workplace who can work and live anywhere and may want flexibility/choice in where they live.
- What does this do for multifamily environments where subletting is not allowed?
- This could get interesting as the multifamily space is starting to see more people sublease their apartment via Airbnb without consent of the property manager. This scenario, in most cases is a violation of the lease but could be difficult to enforce if the community does not have some oversight into their property being listed online (without their consent). The same can be true (and is also taking place), in a residential environment although it is perhaps more difficult to track. In a multifamily setting, it is likely that neighbors will notice new folks coming in and out of a particular apartment unit and there is likely to be some level of unease in that their apartment neighbors are constantly turning over and have not been subject to the same level of credit/criminal background screening that they went through during the leasing process. Should Airbnb dive into the long term rental market, it will be interesting to see how they forge forward in working with the multifamily community as there are a lot of questions surrounding liability when it comes to sublease scenarios.
- What type of disruption would this cause in the online advertising space?
- Airbnb has built a brand over the last several years and similar to how Zillow started off as a platform for the ‘For Sale’ market then moved into the rental space, Airbnb may have the potential to do the same. Could this change how people look for rentals both short term and long term? The Airbnb brand seems willing to at least explore the option of whether this brand can expand by displaying long term rentals on their site and broadening their audience (and possibly charging advertisers to do so).
While nothing has happened quite yet, there are clearly some possible disruptions in the works and forcing the industry to consider how to respond to some of these potential shifts.