The professionalization of short-term rental in apartment complexes is accelerating
When residents of an apartment complex are away, Orion Haus lists and rents the units on their behalf as short term rentals. A major new operation makes Orion Haus the largest of the apartment management companies, such as Daydream and Natiivo, which are professionalizing the short-term rental industry.
Sean O’Neill, Skift
A new management company in the United States is actively helping tenants of apartment complexes to rent their accommodations to travelers through Airbnb and other booking agencies.
Orion House, based in Miami, announced last week that it would begin managing 1,588 units in 10 communities in Texas, Tennessee, Florida and Georgia. The deal with building owners made the brand America’s largest shared housing management company in the United States, the company said. Next week he will open his first property to tenants in Jackson, Mississippi.
Orion Haus joins other companies, such as Dream apartments and Natiivo, not only by leveraging the metronomic growth of colocation, but also by helping owners of multi-family complexes maintain their high rental levels. But a major headwind on the trend is that some cities, such as Boston and Austin, and some condominium boards and landlord associations, essentially restrict or prohibit tenants from subletting their homes for short-term rentals.
“We only go where short-term rentals are over the edge,” said Cindy Diffenderfer, co-founder and CEO of Orion Haus. “We don’t go into communities to change legislation, zoning or permits, and we don’t go into buildings to change the rules on our own.”
“Our demographic will likely be roughly half of traditional residents and those who wish to take advantage of renting their homes for extra income,” Diffenderfer said. “Residents tend to stay in their leases longer if they see it easy to earn extra income from renting.” Orion Haus said it has more than 8,000 signed and verified pre-lease agreements to expand in Fort Lauderdale, Tampa Bay, Clearwater, Charlotte, New Orleans, Dallas and Charleston over the next 18 months. Some of the buildings are hotels that the company is helping convert into multi-family residences.
Orion Haus offers to take photos, post announcements and manage guest inquiries on behalf of tenants. When customers arrive, staff usually offer them drinks, help them with their luggage, and take them to their unit.
Airbnb supports the underlying trend. He offers dedicated online tools and offline services owners of multi-family buildings who encourage tenants to accommodate stays of any duration in accordance with local regulations.
“Sometimes our tenants organize themselves and stay on each other’s sofas or with their loved ones or parents,” Diffenderfer said. “In other cases, they travel for leisure or business.”
Orion Haus is not the first company to try to develop the concept of apartment management companies facilitating short-term rental through subletting.
Dream apartments allows tenants to opt for its colocation program. When residents are away, he lists, cleans and rents their space to earn extra income. Daydream has properties in Austin, Denver and Miami. The commercial real estate developer recently bought a few apartment buildings in Los Angeles and Denver, among others.
Gray star, which rents apartments across the United States, increasingly rents some of its model units, furnished or vacant not let on short-term rentals where local regulations allow.
Airbnb partnered in 2016 with developer NGD to build apartment complexes that were set up for tenants to sublet most of the time. Marks, Niido and Natiivo, planned to open several communities in Miami, Kissimmee, Florida, and Nashville, Tennessee, and other locations.
But Airbnb, which had invested $ 11 million, withdrew after a legal row and a business dispute. Niido separately faced a backlash from some tenants.
A few people involved in the Niido project but not involved in the financial dispute have resurfaced at Orion Haus. Diffenderfer was co-founder of Niido and Natiivo. Orion Haus co-founder and chief marketing officer Kanan Whited IV also previously worked at Niido and Natiivo. But Orion Haus is an independently owned and operated company and has no affiliation with Airbnb, Niido, Natiivo or NGD, Whited said.
Airbnb is not involved in Orion Haus, but the concept is otherwise similar. Today, Orion Haus, Niido and Natiivo list their apartments on Airbnb and other booking agencies.
Orion Haus makes money in several ways. It collects a management fee from property owners for a traditional annual rental of their apartment complexes. It also takes a portion of the income from the units which it transforms into short-term rentals on behalf of tenants, covering all tenant costs except housekeeping. It also rents vacant and non-rented accommodation itself, furnishes the rooms and shares a portion of the short-term rental income with the owner of the building.
Orion Haus offers storage space for tenants who wish to store valuables and personal effects while renting out their units, said co-founder and chief marketing officer Whited. It uses the technology of NoiseAware to monitor the noise levels in the units and to avoid possible nuisances.
Other startups have business models with some overlapping aspects. Probe, based in San Francisco, intends to license your software owners of apartment complexes. Reception, a Milwaukee-based property management and technology service provider, manages short-term urban rental units typically on behalf of multi-family partners such as Core Living by offering revenue sharing arrangements.
Not all residential efforts to professionalize short-term rental have been wild successes. Last year, Expedia Group shut down its multi-family solutions business, which offered software tools to help landlords attract short-term rental bookings for vacant apartments and allow tenants to offer their units to customers.