This week it was announced that the very first condo building in Toronto (and in Canada) has just signed on to Airbnb’s Friendly Buildings Program. The agreement will take effect on November 1, 2017.
As the name suggests, the program is about bringing greater legitimacy and structure to short-term Airbnb rentals. Here are two key measures from this particular agreement:
- Building security will now have full transparency with respect to who is hosting and who their guests are at any given time
- Airbnb will share 5% of the building’s revenue with the condominium corporation (hosts will also need to pay $50/month to cover any additional maintenance costs)
What’s compelling about the above is that there’s now a bit of a financial incentive for buildings/boards to support Airbnb rentals.
At the same time, if something happens, it’ll now be a lot easier to figure out who was responsible and then chargeback any relevant costs. Right now it’s all happening under the radar.
My view on Airbnb is the same as the one I took (publicly on this blog) on Uber: It’s not going away. Many people clearly want it. An entire building just accepted it. So let’s figure out how to make it work better.
This week it was announced that the very first condo building in Toronto (and in Canada) has just signed on to Airbnb’s Friendly Buildings Program. The agreement will take effect on November 1, 2017.
As the name suggests, the program is about bringing greater legitimacy and structure to short-term Airbnb rentals. Here are two key measures from this particular agreement:
- Building security will now have full transparency with respect to who is hosting and who their guests are at any given time
- Airbnb will share 5% of the building’s revenue with the condominium corporation (hosts will also need to pay $50/month to cover any additional maintenance costs)
What’s compelling about the above is that there’s now a bit of a financial incentive for buildings/boards to support Airbnb rentals.
At the same time, if something happens, it’ll now be a lot easier to figure out who was responsible and then chargeback any relevant costs. Right now it’s all happening under the radar.
My view on Airbnb is the same as the one I took (publicly on this blog) on Uber: It’s not going away. Many people clearly want it. An entire building just accepted it. So let’s figure out how to make it work better.
One regulation that Toronto is currently exploring and that I think will materialize in some form is a limit on short-term rentals when the unit is not your principal residence.
This is the difference between Airbnb’ing your place when you leave on vacation (or when you have an extra room) and buying a condo strictly as a short-term rental investment.
It’s interesting to see the evolution of companies like Uber and Airbnb. Both would never have been successful if they started out by first asking for permission.
But now they are mature enough that they are being forced to play nice.
Airbnb has been a game changer. I know many people who have made Airbnb their full-time career or who “stay for free” when they travel because they Airbnb their home. Airbnb likes to focus on the “community” rather than on the business possibilities, but regardless, it unlocked space in a new way.
Here’s another take on decentralized vacation rentals: Montreal-based Sonder. Similar to Airbnb, you submit your property to their platform. But unlike Airbnb, they take care of everything from reservations and guest communication to operations and housekeeping. It’s a completely hands-off approach for owners.
The value proposition to guests is that they get a more consistent experience, but with all the “local color” of a traditional vacation rental. And for owners, they get to maximize revenue without having to be as hands-on as with an Airbnb. (Presumably Sonder’s take is greater.) In many ways, it’s like a decentralized hotel chain. Same supply source as Airbnb, but they are now unifying the customer experience.
It’s fascinating to watch this software/internet layer developing on top of real estate. It’s giving me all sorts of ideas.
One regulation that Toronto is currently exploring and that I think will materialize in some form is a limit on short-term rentals when the unit is not your principal residence.
This is the difference between Airbnb’ing your place when you leave on vacation (or when you have an extra room) and buying a condo strictly as a short-term rental investment.
It’s interesting to see the evolution of companies like Uber and Airbnb. Both would never have been successful if they started out by first asking for permission.
But now they are mature enough that they are being forced to play nice.
Airbnb has been a game changer. I know many people who have made Airbnb their full-time career or who “stay for free” when they travel because they Airbnb their home. Airbnb likes to focus on the “community” rather than on the business possibilities, but regardless, it unlocked space in a new way.
Here’s another take on decentralized vacation rentals: Montreal-based Sonder. Similar to Airbnb, you submit your property to their platform. But unlike Airbnb, they take care of everything from reservations and guest communication to operations and housekeeping. It’s a completely hands-off approach for owners.
The value proposition to guests is that they get a more consistent experience, but with all the “local color” of a traditional vacation rental. And for owners, they get to maximize revenue without having to be as hands-on as with an Airbnb. (Presumably Sonder’s take is greater.) In many ways, it’s like a decentralized hotel chain. Same supply source as Airbnb, but they are now unifying the customer experience.
It’s fascinating to watch this software/internet layer developing on top of real estate. It’s giving me all sorts of ideas.
But recently the real estate community has become incredibly interested in building multi-family apartments (also known as purpose-built rental buildings). Which is why about 7 months ago I wrote a post called, Rise of rental.
It has been decades since Toronto built rental apartment buildings at any sort of scale. That means that our existing stock is generally pretty old and that condominiums – rented out by individual investors – have been almost exclusively fulfilling the need for rental apartments in this city.
But given that purpose-built rental apartments are on the rise, I’ve been thinking a lot lately about them and about the consumer perspective.
And so here’s my question to you:
If you were looking for a place to rent, would it make a difference whether it was a condominium (rented out by an individual investor) or whether it was a professionally managed apartment building? You can assume that the suite itself is identical.
There are obviously many differences between both forms of tenure, but I’m curious to what extent that factors into the decision making process for consumers. It hasn’t really been an option in recent years, but that seems destined to change.
I hope we can have a discussion in the comment section below.
But recently the real estate community has become incredibly interested in building multi-family apartments (also known as purpose-built rental buildings). Which is why about 7 months ago I wrote a post called, Rise of rental.
It has been decades since Toronto built rental apartment buildings at any sort of scale. That means that our existing stock is generally pretty old and that condominiums – rented out by individual investors – have been almost exclusively fulfilling the need for rental apartments in this city.
But given that purpose-built rental apartments are on the rise, I’ve been thinking a lot lately about them and about the consumer perspective.
And so here’s my question to you:
If you were looking for a place to rent, would it make a difference whether it was a condominium (rented out by an individual investor) or whether it was a professionally managed apartment building? You can assume that the suite itself is identical.
There are obviously many differences between both forms of tenure, but I’m curious to what extent that factors into the decision making process for consumers. It hasn’t really been an option in recent years, but that seems destined to change.
I hope we can have a discussion in the comment section below.
