The growing trend of multifamily property managers transforming their apartments into short-term rentals (STRs) is on the rise, igniting a big conversation within the industry.
Turning multifamily properties into short-term rentals can be a profitable strategy to increase occupancy, but there are some issues that need to be addressed and smart property tech may have the solutions we need.
Here are the main challenges multifamily managers may face alongside some of the potential tech solutions that can help navigate these issues:
Multifamily properties are currently being adapted for short stays in two primary ways: the wholesale transfer of entire floors to professional operators during lease-up periods, and the more recent Airbnb-friendly model where renters sublet their units with a revenue split between the resident, owner or operator, and Airbnb.
The appeal of the STR use case is easy to understand: it offers the possibility of high seasonal occupancy rates, a predictable early revenue stream during low occupancy periods, a structured approach to handle the intricacies of subletting, and the convenience of delegating the operational side of property rental on Airbnb to residents or larger professional operators.
However, amidst the enthusiasm and potential revenue streams arising from this convergence, one vital consideration remains — the balance of keeping permanent residents happy and fostering a positive short-term rental experience for temporary guests within the same building.
The first challenge lies in safeguarding the interests and well-being of long-term residents, starting with security and access management. It is essential that residents feel safe in their own homes as short-term rental guests come and go.
Access management solutions can empower managers to limit entry to certain floors within a multifamily development, ensuring that guests do not mingle with residents, or to control the accessibility of specific amenities, such as the rooftop pool.
For multifamily residents using the Airbnb-friendly model to sublet their property, the apartments could be anywhere in the building so it won’t be possible to isolate certain areas. Here, the boundary between residents and short-term guests becomes blurred and co-mingling cannot be avoided, but technology can still assist managers in prioritizing the needs of long-term residents.
One common concern from long-term residents when a portion of their building is sublet to short-term guests is the potential for noise disturbance. A viable solution to this problem could be to install noise monitors within the short-term rentals. While these monitors are typically used in communal areas of multifamily buildings, their application within short-term rentals can help mitigate potential disturbances by notifying managers when noise passes a certain threshold.
Given the frequent turnover of short-term rental guests, long-term residents may feel concerned about who has keys to the building, including both past and present guests. Keyless locks can alleviate these concerns, providing managers with a secure method to protect their assets by eliminating physical keys. Moreover, these locks offer residents reassurance that only those with a unique (and changeable) code can access their building.
Beyond catering to the needs of long-term residents, it is equally critical to consider the experience of short-term rental guests within a multifamily building. This calls for deliberate consideration, particularly in the context of evolving technology.
Communication is a key aspect. The dialogue between an operator and a short-term rental guest is likely to differ significantly from that with a resident. Effective communication goes beyond delivering the right information — it’s about delivering it at the appropriate time and in a suitable format. Long-term residents typically require information about billing or lease details, community rules or maintenance updates. In contrast, short-term rental guests need clear instructions, check-in and check-out procedures, and local food or entertainment recommendations for a hassle-free stay. Currently, the communication platforms and tools serving these distinct audiences are largely separate.
Cleanliness is another critical factor in the convergence of multifamily and short-term rentals. Frequent turnovers necessitates thorough and professional cleaning of short-term rental units between stays to meet guest expectations and adhere to health and safety standards. Property management systems can automate cleaning schedules, while smart locks and access control systems streamline coordination with cleaning services.
Multifamily property managers should also consider the current headwinds faced by the short-term rental industry, as local governments continue to restrict new rentals with tightening local regulations. Regulations governing short-term rentals can vary significantly depending on the location and are subject to change. However, navigating these complexities and ensuring all rentals are compliant with local laws is crucial to prevent potential legal complications.
Smart property technology conclusions
While technology provides valuable solutions, it represents just one component of a multifaceted equation. To effectively navigate the convergence of long-term residents and short-term guests, multifamily managers must craft a comprehensive strategy that addresses communication, cleanliness, access, safety, and long-term resident satisfaction.
For those looking for innovative ways to reduce vacancies, the opportunity is promising – but it’s important to remember that while technology is an enabler, it’s not the complete answer.
Want to find out more about the convergence of short-term rentals and multifamily through technology? Read Mike’s article in Residential Tech Today here.