Home rental behemoth Airbnb wants apartment landlords in its corner as it provides incentives through a program that provides extra revenue if they allow tenants to rent out their units through the site.
The program was announced last month, which allows apartment owners to get a portion of the earnings from Airbnb guests in their property. It has the potential to add millions of apartment units to the company’s portfolio of short-term rental properties.
However, landlords remain wary of the program as they scuttle to avoid lawsuits, regulatory hassles and irate neighbors.
The initiative, called the Friendly Buildings Program, lets landlords get a cut of the nightly revenue at a suggested rate of 5% to 15% if they allow tenants to sublet their apartment. Still, a one night $200 stay amounts to $30 or less, an amount that is not worth the bother, says most landlords.
“I don’t see it gaining much traction. There’s just inherent risk in allowing unknown guests to come onto your property,” observed Margette Hepfner, senior vice president for client services for Lincoln Property Co., which manages or owns 175,000 apartments across the US.
Airbnb nevertheless remains a force that is difficult to ignore. Since its founding in 2008, the number of annual guests spiked from 21,000 in 2009 to 100 million this year. In its latest fundraising round, the company was valued at $30 billion.
The company is courting apartment landlords because these properties are essential for its growth, analysts say, because huge portions of housing stock in the most popular vacation destinations are in the form of apartments. Standard apartment leases prevent tenants from subletting without the landlord’s permission.
