In a city that knows no shortage of real estate controversies, the newest one covers some unexpected territory: short-term rentals in New York City, or, as most people refer to it, Airbnb. Yes, that five-year-old startup now valued at more than $2.5 billion provides a platform in NYC (and around the world) for short-term renters to occupy a room or an apartment and offers a money-making opportunity for those renting out their own pads as well.
Brad E., (who like everyone we talked to did not want to be fully identified), rents a room out of his three-bedroom apartment in Greenwich Village while his roommate is away traveling for business. The main motivation behind renting? Money. The duo charge $100 to $120 a night, and according to Brad, “This helps offset each of our rents as we split the rental fees between our roommates, along with sharing the duties of giving out keys, changing sheets and what not.” Renting out a room while you remain in the apartment isn’t for everyone, but for some it can be a great way to meet new people. “It has been a lovely experience so far and our place feels like a European hostel right now,” says Brad. “I love it.”
Airbnb’s popularity is uncontested. New York is the company’s biggest market, and in October the site released the results of a study conducted by HR&A Advisors on its behalf that showed the site brought 416,000 visitors to the city and pumped $632 million in economic activity in the city from August 2012 to July 2013.
The result for travelers is access to a more home-like place for a lot less money than a traditional hotel would cost — and access to neighborhoods underserved by hotels. “Basically I just want to feel like I live in whatever city we’re going to visit,” says Steve S., a New Yorker who stays primarily in Airbnb apartments when he travels.
Naturally all this big business has not gone unnoticed by the city and the hotel industry, both of which stand to lose revenue from the site, and its legality has been questioned. It hinges on a 2010 law that made it illegal to rent an apartment for less than 30 days if a permanent resident isn’t in the apartment. The law was aimed at keeping landlords from turning their buildings into illegal hotels. (If you own the entire property, that law does not apply, but other zoning laws may.)
In May of 2013, Airbnb was dealt a blow when a judge declared the site illegal on the grounds of the 2010 law and fined a landlord whose tenant had rented out a room in his apartment while his roommate was present. That fine was then reversed in September by the New York’s Environmental Control Board, whereupon the company’s global public policy director, David Hantman, declared it a “huge victory” for the site.
Then in October, the New York Attorney General issued a subpoena seeking user data for 15,000 Airbnb renters in New York City. Airbnb has called the subpoena “unreasonably broad” and is fighting it. What the company does want is for the city to rewrite the 2010 short-term rental laws, and in exchange, Airbnb will require its renters to pay the city’s occupancy tax. This tax is currently applied to hotels.
For this story, Airbnb press referred us to this blog post, where head of public policy David Hantman states, “We have long advocated for a change in New York law that would allow regular New Yorkers renting out their own homes occasionally throughout the year to do so without the threat of government intervention or fines. The good news is that a bill to do just that was introduced this year, and we expect it to be debated sometime in 2014 when the legislature in New York reconvenes.”
While questions of legality remain murky, Airbnb isn’t going anywhere and more and more people are taking advantage of its services. With this in mind, here are some stories from current New Yorkers using Airbnb to rent out their places. They’ve have also provided us with tips on for listing your own space on Airbnb, as well as searching for an apartment in New York — all in the name of keeping it as safe, fun and as legal as possible.
Types of rentals you what you need to know about them
There are a few different types of Airbnb setups: renting out a room while the original occupants remain in the apartment, or renting out an entire apartment without the apartment tenants present. It’s an important distinction — if apartment residents rent out a room while they remain in the space, it’s generally considered in the clear thanks to the September ruling. Issues get much cloudier when tenants rent their entire apartment out.
One of those in the grey area is Drake (speaking under an assumed name), who travels a few days a month for work. He decided to upgrade from a roommate share to his own apartment and to pay for that increase with money from Airbnb customers, as he travels a few days a month for work. He explains, “I just assumed that I’d be able to make $600 to $1000 a month and raised my price range based on that. So I ended up getting a nicer apartment than I would have been able to afford otherwise.”
David and Lindsay (who asked to go by their middle names out of concern over the unresolved legal issues) rent a full apartment from their townhouse in Brooklyn. For them, too, money is a main motivation. “We just bought a house and believe that sharing our space with others while making some extra income helps in maintaining our mortgage after losing our jobs in media and marketing. We were able to then use our experience with the help of Airbnb to market our apartment rental to visitors … tourist, family and friends,” David says.
The importance of collecting positive reviews
For a renter, it’s important to do your research before you choose a place, both in terms of location and the quality of the rental itself. “Definitely rent from a place that at least has one review, and preferably a bunch of reviews,” says Steve S. “If there are few reviews, it could, of course, mean that they are just new to the site … I’d probably check the profiles of the people who reviewed the property and make sure that they are actual visitors who travel frequently and not just friends of the host.”
For those renting their spots, we have seven helpful tips to get you going on Airbnb:
The one thing you and your renters must NEVER do
The only way to get in trouble for using Airbnb is if someone files a complaint — meaning it’s very important for renters not to upset neighbors, the landlord or basically anyone during their stay. J.C., who rents his apartment near Times Square, says “The key for a successful Airbnb experience is to be private and discreet. Never annoy neighbors and never ever call the management company to fix any issue. All must be fixed by you and on you.”
Price your rental according to your needs
Drake initially priced his East Village apartment at a low nightly rate — $130 to $150 — to get initial good reviews on his profile (see our above tip that recommends renters use reviews as a way of getting a feel for a place). Now he charges between $200 and $230 a night and receives many requests whenever he makes it available.
Let guests know you’re watching
Drake tends to rent out to visitors in the 25 to 35 age range because the neighbors will likely assume they’re just friends. It’s also important to have clear communication and a no-hassle policy when renting out or sharing a space. “I always meet our guests in person and check in on them periodically in passing, via text, email or phone. This creates a good no-hassle strategy. The best strategy is to let them know you or a family member will be around or in the area to check in on them during their stay. This creates a bit of a verbal no-nonsense clause and a safety-net for you and your guests,” says David.
Because Brad E. remains in the apartment while hosting Airbnb guests, he and his roommates set up a group text to align who is available for key exchanges. “We like walking our guests into the place and showing them the space,” he says.
Feel guests out over email
Drake, who has never had safety issues renting out his apartment, says back-and-forth messaging between potential renters is helpful: “I can usually get a good sense of whether they’re the kind of person that I’d want to stay in my apartment based on a few messages that we send back and forth before I approve them to rent it.”
Use appealing photos
Beyond having a direct line of communication between rentees and renters, it’s important that the space itself appeals to renters. “Photos are super, super important,” says Steve S. “In cool, young neighborhoods in cities there are a lot of Airbnbs at similar price points … so it comes down to how nice the inside of it looks.”
In Brooklyn alone, there are more than 1,000 Airbnb rentals to pick from. The key to standing out? “Take nice pictures and write a detailed description in a friendly tone,” concurs Jamie, who lists her apartment in Bushwick for $120 to $160 a night and leaves an envelope with the keys in it at the corner bodega for her guest to pick up. Brad suggests paying attention to the minutia, advising “taking pictures with the beds made, having the place clean.” He also mentions that “outdoor space is big” when it comes to attracting people.
Those who rent using the service can even request an Airbnb photographer to come by your apartment and take pictures of your rental space for free.
Obey the rules of good hosting
The better host you are, the more attracted people will be to your listing. “As an ambassador for your city, do your part to make sure their stay is a good one,” says David. “A good stay in your apartment means a good review on Airbnb, which will attract many more guests and visitors to your city.”
It’s generally accepted that hosts provide clean linen, towels, toilet paper, a microwave, kitchen utensils and access to internet service and outdoor space, if they are available.
Location, location, location
It helps to have an apartment located in a tourist-friendly destination, and if yours isn’t, use your Airbnb summary to explain why your neighborhood is so great. Many renters who use the service prefer experiences outside of touristy neighborhoods, as Steve S. notes. “Most hotels are located in touristy areas, but with Airbnb you can stay where people actually live. It’s a really rewarding way to see a new city.”