Airbnb, the controversial service that lets homeowners temporarily rent out a room or a whole house, has been in Georgetown for at least a year. But recently a new type of Airbnb listing is starting to multiply in the neighborhood: recently sold homes.
Specifically, among the dozen or so Airbnb listings in Georgetown, GM found four that were recently sold (i.e. within the last two years). The service advertises itself as a way for homeowners to “rent out some extra space effortlessly“. But these listings strongly suggest that in Georgetown, at least, it’s becoming a way for real estate managers to rent out investment properties.
And numbers make sense. One house was bought in 2013 for about $1.3 million. It rents out on Airbnb at over $6,000 a week. In the spring and summer, it charges $1,000 a weekend night. A similar house rented on a long term basis would attract no more than about $7,000 a month (for what it’s worth, Zillow estimates only a $5,800/month rent). Airbnb obviously has more risks since the property could remain empty most of the time, but it has significantly more upside.
Clearly many properties in Georgetown are already purchased simply as investment properties. They run the gamut from run-down student rentals to upscale rowhouses. But these are generally rented out on a long term basis. Airbnb rentals are essentially unregulated hotels. The guests stay for a few days, then leave.
This is not necessarily a bad thing. GM has a house around the corner from him that converted from a yearly rental property to an Airbnb. Whereas before the house generally was rented out to boisterous twenty-somethings, now it’s got mostly families looking for a place to stay for a weekend trip to DC. The property is kept-up better than it was before, and there are obviously fewer loud parties.
But the house is also empty most of the time. And not all renters are loud twenty-somethings. The houses on either side of GM are rental properties. They’ve housed a Washington Post writer, two GU sports medicine professionals, and a handful of various doctors. Renters can be great neighbors who get invested in the neighborhood despite the lack of a mortgage.
Hotel guests, however, are truly not here to be your neighbor. And if landlords now see more profit in Airbnb than long-term rentals, that might be an unfortunate development, both for renters (who will have fewer options) and homeowners (who will have fewer neighbors).
Airbnb listings already are probably not even legal in Georgetown. But GM is of the opinion that as long as they are not causing a problem for the neighbors (say, for example, a house that pitches itself as a party location) then there’s no reason to complain.
Maybe this will be a self-correcting trend. A handful of Airbnb listings can demand high fees. If dozens of landlords tried that, though, the market would likely collapse. Nonetheless, it’s a trend worth monitoring.