What are you guys thoughts on AirBnB friendly luxury apartments?
For more background, check out Niido's company page. They currently have one property in Nashville and Orlando, with one more rumored in Austin.
Essentially the idea is to juice rent dollars by having tenants "airbnb" out their apartments when they are away (tenants get the lions share of the proceeds). Niido manages the whole process themselves. I think they also plan on setting aside a certain amount of units for exclusive rental purpose.
I definitely see an economy of scale issue on the back end, as owner won't be able to capture the property's full value upon sale since most buyers won't be underwriting the "juiced" rents. But, if this space gets more saturated, things could get interesting? Thoughts?
Multiple shops are shying away from properties where income is derived directly from Airbnb or from tenants who are effectively running hotels in multifamily. I've seen significant discounts to cap rates that easily offset NOI gains upon sale. Most lenders have issues here as well.
If the management of the building is involved who pays for the extra capex and maintenance that is going to be needed? Most of your extra income is going to be wasted on the higher costs.
Also will that affect leasing, I know I wouldn't want to live in a building full of air bnb rentals. Especially if they are high end properties with great amenities. I don't want the nice pool I pay a premium in rent to have to be full of assholes that don't live there all the time.
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