About three years ago, Compass Real Estate agent Phillip Murrell discovered an attractive off-market duplex in the M Streets. He liked it so much, he and his partner bought it. Then they had to decide whether to seek out a long-term tenant or try the short-term rental market.
“At that point, Airbnb was big but a lot less tested than it is now,” Murrell recalls. “I didn’t know anyone personally who did an Airbnb.”
He initially rented out the bottom unit to a client who needed a place for six months. Upstairs, he began adding consignment furniture along with some of his own. Before long it was time to list the space and see what happened.
“The response was almost instant,” Murrell recalls. “Upstairs we were getting well over $2,700 per month.”
A couple of weeks ago, I looked at a problem a few neighbors approached me with — a nearby property owner renting out a house on Airbnb that had become a nuisance, they felt, with a succession of parties.
That column prompted David Krauss to email me. Krauss and his business partner, Andrew Schulz, have a product they feel is a boon to homeowners taking advantage of the short-term rental market — a noise detector that alerts a host when the noise level is reaching neighbor-irritating levels.
“We like to call it a smoke detector for noise,” Krauss told me. The device plugs into any electrical outlet, and after a fairly easy setup, begins churning out data for homeowners. (more…)
Recently I moderated a panel on Vacation Homes for NAREE in New Orleans, like a little over a week ago. One of my panelists was Bill Furlong of HomeAway, the nine year old Austin-based “alternative accommodation” site that runs VRBO.com and VacationRentals.com. As I may have told you, the vacation home rental industry is huge and growing as more people find ways to make piggy banks out of their homes and second homes. HomeAway IPO’d in 2011. Airbnb is exploding. What did Bill tell us?
The vacation rental industry is estimated to be $100 billion worldwide.
HomeAway lists more than 1.2 million vacation rentals in 193 countries
The average owner listing on HomeAway books their property for 18 weeks and grosses more than $28,000 in rental income each year
More than half (59%) of HomeAway owners cover 75% or more of their mortgage renting to travelers
It’s such a juicy market that Expedia paid $3.9 billion for HomeAway in late December, ending their days of watching this industry from the sidelines. While Expedia and Priceline have continued to duke it out over hotel bookings, a new breed of competitors crept up using technology to help homeowners basically monetize what my grandmother did during the Depression: take in boarders. Like Bill said, who needs hotels when you can have a whole house for the same price?
Then along came Airbnb. In fact, the short term rental site has caused a lot of indigestion here locally. Now comes word that hoteliers and politicians in New York City have said, “enough”. Unlike San Francisco, where Airbnb started, where there are new rules but short term rentals are legal, the Big Apple is losing hotel taxes to the private rentals and they are not going to take it anymore. We have the whole story over on SecondShelters.com.
But first, have you seen the commercial HomeAway ran to distance itself… and poke a little fun at… the home sharing companies? HomeAway listings tend to be managed properties and second homes that people rent out for most of the year. I’ve just leased a home in Lake Tahoe through VacationRentals.com: only $600 a night! Airbnb allows people to rent out rooms for brief stints; that’s how the concept was created. But now Airbnb also has expanded into the professional vacation rental businesses. So HomeAway Inc. wants to remind you how gross it can be to share someone’s home. I kind of agree: when I first heard the Airbnb concept, I said, dumbly, this will never work. But I guess I am too OCD.
The commercial is hilarious: Wouldn’t you love to find a stranger’s hair on a bar of soap? Have someone watch you while you sleep? Watch someone clipping their toenails in your home?
Ah the new sharing economy, toe nail clippings included at no extra charge.