First Free Story (1 of 3)Join Skift Pro
A new management company in the U.S. is actively helping tenants in apartment developments rent out their units to travelers through Airbnb and other booking agencies.
Orion Haus, based in Miami, said last week it would start managing 1,588 units across 10 communities in Texas, Tennessee, Florida, and Georgia. The deal with building owners made the brand the largest U.S. home-sharing management company in the U.S., the company said. Next week, it will open its first property to tenants in Jackson, Mississippi.
Orion Haus joins other companies, such as Daydream Apartments and Natiivo, in not only cashing in on the metronomic growth in homesharing, but also helping the landlords of multifamily complexes keep their lease levels high. But a major headwind on the trend is that some cities, such as Boston and Austin, and some condominium boards and homeowners associations, restrict or essentially ban tenants from subletting their units as short-term rentals.
“We are only going where short-term rentals are above-board,” said Cindy Diffenderfer, Orion Haus co-founder and CEO. “We’re not going into communities to change legislation, zoning, or permitting, and we’re not going into buildings to change rules on our own.”
“Our demographic is probably going to be roughly half-and-half traditional residents and ones who want to take advantage of renting out their units from time for extra income,” Diffenderfer said. “Residents tend to stay longer in their leases if they see it’s easy to earn extra income through the rentals.”Orion Haus said it had more than 8,000 signed and verified pre-lease agreements to expand in Fort Lauderdale, Tampa Bay, Clearwater, Charlotte, New Orleans, Dallas, and Charleston in the next 18 months. Some of the buildings are hotels that the company helping to convert into multifamily residences.
Orion Haus offers to take photos, post listings, and handle guest requests on behalf of tenants. When guests arrive, the staff typically offers them beverages, helps them with their luggage, and takes them to their unit.
Airbnb supports the underlying trend. It provides dedicated online tools and offline services to multifamily real estate owners who encourage tenants to host stays of any length in accordance with local regulations.
“Sometimes our tenants organize themselves and stay on each other’s couches or with their significant others or parents,” said Diffenderfer. “In other cases, they’re traveling for leisure or business.”
Orion Haus isn’t the first company to try to scale up the concept of apartment management companies facilitating short-term rentals via subletting.
Daydream Apartments lets tenants opt into its home-sharing program. When the residents are away, it 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 other spots.
Greystar, which rents apartments across the U.S., has increasingly been renting some of its furnished, model units or unleased vacant units as short-term rentals where local regulations permit.
Airbnb partnered in 2016 with the developer NGD to construct apartment complexes that were set up for tenants to sublet them much of the time. The brands, Niido and Natiivo, planned to open multiple communities by now in Miami, Kissimmee, Florida, and Nashville, Tennessee, and other locations.
A couple of the people involved in the Niido project but not involved in the financial dispute have resurfaced at Orion Haus. Diffenderfer was a 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 isn’t involved in Orion Haus, but the concept is otherwise similar. Today, Orion Haus, Niido, and Natiivo list their apartment units on Airbnb and other booking agencies.
Orion Haus makes money in a few ways. It earns a management fee from real estate owners for a traditional annual lease-up of their apartment complexes. It also takes a cut of the revenue for the units it turns into short-term rentals on behalf of tenants, covering all costs for tenants except for housekeeping. It also rents out vacant, unleased units on its own, furnishing the rooms and splitting a share of the short-term rental revenue with the real estate owner.
Orion Haus offers storage for tenants who want to stash valuables and personal effects while renting out their units, said co-founder and chief marketing officer Whited. It uses technology from NoiseAware to monitor noise levels in units and thwart any nuisances.
Other startups have business models with some overlapping aspects. Sonder, based in San Francisco, intends to license its software to owners of apartment complexes. Frontdesk, a property management service and tech vendor based in Milwaukee, runs urban short-term rental units typically on behalf of multifamily partners such as Core Living by offering revenue-share deals.
Not all of the residential efforts at professionalizing short-term rentals have been wild successes. Last year, Expedia Group shut down its multifamily solutions business, which had offered software tools to help landlords attract short-term rental bookings for vacant apartments and to enable tenants to offer up their units to guests.