Based in Secaucus, NJ, Hartz Mountain is a real estate owner often at the forefront of emerging real estate trends. They’ve been researching and analyzing short-term marketplaces like AirBnb the past few years, and they agreed to work with us on a case study documenting their experience with ApartmentJet.
The Case Study focuses exclusively on Hartz’s first ApartmentJet community, the Whitley in Austin, TX. Hartz’s executive team proposed three key challenges to ApartmentJet: Could we manage Austin’s strict occupancy tax requirements, could we help minimize the distraction to current residents and onsite staff, and could we demonstrate the significant revenue gains necessary to make short-term rentals worthwhile?
Managing Occupancy Taxes
The city of Austin imposes a 9% occupancy tax for short-term rentals on top of the state’s lodging tax. Short-term rental marketplaces do not currently withhold those taxes, leaving host properties fully responsible for collection and filing.
We calculate the necessary taxes for each transaction and withhold the funds from the client’s payout. We then report to our tax partner, Avalara MyLodgeTax, on a monthly and quarterly basis (depending on the specific tax involved). MyLodgeTax handles the tax filing with appropriate government agencies. No work is required of our clients.
This year, for The Whitley alone, we’ve collected over $11,000 in short-term occupancy taxes for the state of Texas and city of Austin.
Minimizing Onsite Disruption with our Concierge Service
Leasing teams are busy supporting a community’s long-term residents. To minimize the disruption to The Whitley’s site team, ApartmentJet’s Concierge Team handles content setup and all guest communication. The site team is primarily involved during guest check-in/check-out. Adding a personal touch by having guests meet with the leasing team has lead to a perfect 5-star rating and Business Traveler Ready status on AirBnb.
We continue to invest in new ways to simplify the process for both site teams and guests.
Booking Activity and Revenue
Lastly, revenue. Can short-term rentals drive enough revenue to supplement long term leases and reduce vacancy loss? Absolutely.
We began by implementing revenue management tools and event-based pricing. With ApartmentJet’s pricing tools in place for SXSW, The Whitley’s guest suites booked at rates 300-600% greater than previous years.
From December to June, The Whitley’s five units booked 239 reservations representing 839 nights and over $200,000 in revenue, nearly half of which has already been paid out for completed stays.
As a result, Hartz has added three more communities to ApartmentJet. To date, Hartz properties have generated more than $500,000 in total bookings.
“We are thrilled with the success and opportunity in short-term rentals,” says Lawrence Garb, Executive Vice President at Hartz Mountain. “ApartmentJet has simplified the process for us, given us the opportunity to experiment with the model, and the results speak for themselves. We’re rolling out the program to other communities across the country.”