Airbnb is Getting Into the Real Estate Industry

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I recently wrote a blog that discussed the effect of Airbnb, the popular sharing economy service, on real estate. In that blog, I mentioned that Airbnb could prove to be a real threat to the real estate industry. The service is already disrupting the hospitality industry and has caused a bit of a stir in real estate, but its latest venture could drastically impact both industries.

 

According to a report from Fastcodesign.com, Airbnb is partnering up with a South Florida-based development company, Newgard Development Group, in order to construct an apartment building specifically designed for the sharing economy. Depending on the success of the building, Airbnb could roll out several more buildings throughout the country.

 

Dubbed “Niido,” the apartment building will exclusively host Airbnb rentals and feature 324 units. Niido is being constructed in Kissimmee, Florida.

 

Airbnb has been looking into making deals with apartment complexes for sometime, but has been limited by legal restrictions. By partnering with a development firm to build its own apartment buildings, the company can completely avoid those issues.

 

The Niido building is being specifically designed to accommodate the average sharing economy user. Niido will feature wide open common areas in the hopes that visiting travelers will interact and engage with each other; units will feature home offices that can easily transform into a spare bedroom; each unit will feature bathrooms and kitchens constructed of durable material that is also easy to clean; units will include small safes for travelers to store their personal belongings; each unit will work on a keyless entry system that only grants access during the duration of a visitor’s stay and tenants will be able to access both home-sharing and maintenance services through a single app. Newgard Development and Airbnb have truly pulled out all of the stops in order to provide a unique experience that will hopefully push the sharing economy industry forward.

 

With the Niido building, Airbnb hopes to create something of a small community. A portion of all standard Airbnb booking fees will go towards community projects, such as cooking and art classes. This will help to create a sense of community and offer a great experience and a better reason to stay in a Niido building.

 

Should Airbnb’s Niido building take off, the company could drastically encroach on the real estate industry. What are your thoughts? Do you want to see Airbnb make their own apartment complexes or would you rather they stick with what’s been working?

How AirBnB is Affecting Real Estate

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We all love the wonders that technology has bestowed upon us. Truly, it has changed our lives in some fascinating ways. We have instant access to virtually all of the world’s knowledge, we can communicate with almost anyone in the world, instantaneously, and we are making significant advancements in a variety of industries, like healthcare and finance. That being said, although technology has been a major boon for us as a society, it has also been a bit of a nuisance to others. Technology has a knack for “disrupting” longstanding traditions and industries. And almost every industry has been disrupted in some form or another. For those unaware of the term disruption in this context, it can be quickly summed up like this: disruption occurs when a new technology or method of completing a task, objective or service displaces longstanding traditions and methods.

 

And while disruption tends to move our society forward in a positive direction, it can pose challenges to our pre-existing industries. A great example of this can be seen in the sharing economy. Services like Uber and Lyft, where ordinary citizens can become overnight chauffeurs, are giving the taxi industry a run for its money. But I want to focus on another sharing economy service: AirBnB.

 

AirBnB takes the concept of Uber and Lyft and applies it to the hospitality industry. Homeowners and landlords can post a room or building on the service and host visitors, travelers or anyone else. You simply sign up with AirBnB and, essentially, turn your house into a hotel. And while this may sound like a novel idea, it poses a potential threat to the real estate industry.

 

According to recent reports, the wildly popular sharing economy company is looking into getting into long-term real estate. Currently, AirBnB focuses primarily on short-term leases. Most AirBnB hosts rent rooms out for a few days, but now, because of the company’s growth, they may be expanding into more lengthy leases.

 

Industry professionals are unphased, claiming that AirBnB could not make the necessary impact on the industry to make any real impact. However, with the company’s massive growth and popularity, they could certainly hurt other real estate developers and investors. Many of the hosts that use AirBnB purchase multiple properties for the sole purpose of using AirBnB.

 

These are still just rumors, but if they come to fruition, then multiple real estate developers and investors could wind up competing with one of the largest growing hospitality services in the country.