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Think your building isn’t located in the right spot for short-term rentals? Think again!
Savvy building managers know that offering short-term rentals provides an attractive amenity while driving profits. Some landlords are concerned, however, that this opportunity won’t be successful if their property isn’t located in an uber-populated downtown area. Data from Pillow’s enrolled buildings shows that this isn’t the case. Buildings in less centrally located markets frequently perform as well as buildings in downtown, metropolitan areas. Rentals in suburban or smaller communities are a great fit for events, conferences, schools and sports tournaments. Multifamily properties located in areas outside of central downtown areas can still leverage short-term rentals through Pillow in a meaningful and lucrative way.
Short-term renters look for different things in their rental properties. Many building operators assume that their properties are in an inopportune location and therefore don’t take advantage of the ever expanding rental market. Communities located near hospitals, for example, can be desirable options for families looking to avoid costly hotel rentals while their loved ones are in the hospital. Business people can stay comfortably in a property near the convention center to quickly get to a conference. Airbnb has made this easy with Airbnb Events- event attendees can easily skim a compiled list of housing venues near the location of their conference. Buildings located near sporting venues can be a welcome overnight host for sports fans. In 2016, cities hosting the Democratic and Republican national conventions saw a marked increase (2-4 times as many as normal) in short-term rental traffic during those events. Schools, event centers and malls can all be powerful pulls for short-term renters seeking an often cheaper and more comfortable arrangement than a traditional hotel. The point is, people seek out short-term rental properties for a wide variety of reasons. Buildings not centrally located can still be a powerful amenity and addition to the community.
Case in Point
Pillow has seen success similar to that of their popular downtown buildings in properties less centrally located. A property in Lexington, Kentucky, for example, has been exceptionally popular during the Kentucky Derby. Throughout the year, the building has seen performance on par or better than many of their properties in Seattle and Dallas. Nearby Louisville generated about $3.5 million in short-term rental revenue during the same events, as hotels quickly filled and guests were willing to pay a premium for lodging. In Arizona, a building located on a popular golf course and next to Major League Baseball spring training camps has performed well and received high ratings from guests. Likewise, Tampa, Florida saw more than $1.5 million on Airbnb during spring training. In Pennsylvania, several properties located near universities have seen a steady flow of guests visiting the schools or attending football games. In all, the already enrolled rental properties don’t lie- short term rentals have been equally as successful in less centrally located areas as well as more populated downtown areas.
Forbes Magazine recently conducted a study to find which cities took the least number of Airbnb rental nights to recoup their mortgages. The data also includes short-term apartment rentals from buildings that approved the amenity. Topping the list were Akron, Ohio, Cleveland, Ohio, Virginia Beach, Virginia, Indianapolis, Indiana, Cincinnati, Ohio, Columbia, South Carolina, Greensboro, North Carolina, Knoxville, Tennessee, Louisville, Indiana, Albany, New York. These cities all typically have significantly lower rents than downtown, metropolitan buildings. In these markets, short-term rentals are a particularly effective way to make money: lower rent costs lead to higher profit margins on short-term rentals! Take note, building managers: offering short-term rentals in lower-rent markets is an even easier way to effectively make a profit.
Across the United States, only 12.5 percent of hotel rooms are in rural areas. By contrast, 18.4 percent of active Airbnb listings are in rural locations. Much of America’s population lives in rural areas, and the need for temporary housing is not being met. This represents a vital market opportunity for property managers in rural areas to fill this demand. Profits from short-term rental opportunities allow for a revitalization of rural economies. Last year, rural Airbnb hosts in America made more than $494 million. Building managers in rural locations can and do still benefit greatly from offering short-term rentals.
Give it a shot
By 2020, Airbnb’s annual revenue is expected to top $8.5 billion. Short-term rentals are a huge and rapidly expanding market, and now is the time to become a part of it. Building owners have seen similar successes in urban markets as well as less centrally located areas. No matter where you’re located, your property and your residents are sure to benefit from offering short-term rentals. Contact Pillow at firstname.lastname@example.org to get started on this exciting process.
Building Owners and Managers quickly sign up your building here!
Written by: Todd Conway | August 22, 2018