An Innovative Way to Incorporate Airbnb
Digested from Colorado Real Estate Journal
A community in Denver welcomes residents sharing and decides to spilt the profits.
White other cities have fought Airbnb, Denver has taken a more open approach to short-term rentals. The city requires Airbnb hosts to obtain a license to offer short-term rentals with the condition that the property be the hosts’ primary residence. That mitigates many of the problems created by Airbnb by eliminating absentee landlords, according to the Colorado Real Estate Journal.
The approach has given apartment owners in the Mile High City opportunities to incorporate short-term rentals into their offerings.
Just look at what happened at Virtu Investment’s Archer Tower property. Virtu teamed up with Pillow Residential to allow residents to rent their apartment homes on Airbnb. Under the revenue-sharing agreement, Virtu receives 10 percent of the revenue, Pillow gets 10 to 20 percent and the resident gains 70 percent to 80 percent. Pillow handles the logistics by coordinating advertisements, key swap and professional cleaning. Virtu is offering residents discounted monthly lease rates in exchange for participation.
“The program has received a warm reception from residents at Archer Tower, according to Virtu COO Blake Hayunga. He noted a 20 percent increase in applications since inception with a 50 percent penetration rate on new leases,” according to The Colorado Real Estate Journal. “Hayunga views the program as an amenity that empowers residents to ‘monetize slack in the economy’ where tenants can profit from their empty apartments. While revenues are reinvested in the property, Hayunga also anticipates significant bottom-line improvement through strong occupancy, low turnover and the ability to increase rents while maintaining affordability.”