Austin Case Study
Revenue, Taxes and SXSW in Austin!
Hartz Mountain is a real estate owner based in Secaucus, New Jersey. Hartz owns a variety of premier real estate throughout the country including prestigious multifamily properties: The Whitley (Austin, TX); The Estuary (Weehawken, NJ); 3 Journal Square (Jersey City, NJ); and One Superior Place (Chicago, IL). Hartz is often on the forefront of emerging real estate trends, and they’ve been researching and analyzing short-term marketplaces (i.e. AirBnB) for the last few years. Hartz understands sites like AirBnB and HomeAway are here to stay, and they sought a short-term rental solution to test at their communities. Hartz and their management partner reached out to ApartmentJet to pilot their technology for the management and marketing of furnished guest suites on AirBnB.
Hartz began the pilot with their Austin-based property, The Whitley. The property is located in downtown Austin and in close proximity to the convention center. The Hartz executive team posed the following challenges for the pilot:
- Manage local occupancy taxes and permit requirements
- Minimize the disruption to our residents
- Demonstrate the monthly revenue opportunity with short-term stays
Occupancy Tax Compliance
ApartmentJet is a unique short-term stay platform because it takes on the responsibility of managing tax and compliance for its clients. ApartmentJet is partnered with the short-term rental tax experts, Avalara MyLodgeTax. ApartmentJet and MyLodgeTax handle the research and filing and payment of local taxes for ApartmentJet clients.
In the case of The Whitley, Hartz applied for a permit permit for each short-term unit. Once the applications were approved and permits assigned, the listings went live. On a quarterly basis ApartmentJet automatically calculates the local occupancy taxes from The Whitley’s revenue, and sends it to MyLodgeTax for each listed unit. ApartmentJet then holds back the funds to cover the local occupancy taxes and provides payment to MyLodgeTax who then pays the City of Austin. Hartz and The Whitley team aren’t involved in the process; it’s fully managed by ApartmentJet.
Concierge Keeps the Site’s Focus on Residents
The site team needs to remain focused on their residents and long-term leases. To minimize disruption at the site, ApartmentJet builds the listings and manages the short-term guest interaction. Additionally, ApartmentJet wants to ensure all guests are treated equally. ApartmentJet partners with TransUnion to perform a criminal background check on every guest prior to approval, and every reservation is insured through our policy with Assurant.
ApartmentJet only includes Whitley’s site team when a guest checks in and out. In the case of The Whitley, 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.
Short-term Revenue & Event-based Pricing
In just over six months, ApartmentJet booked 239 reservations totalling 833 nights and more than $200,000 revenue for The Whitley. Over $99,000 was paid out for completed stays from December through third week in June.
Traditionally, multifamily has not been able to capitalize on local events and hyper demand. ApartmentJet opens the door for communities to maximize revenue by taking in short-term guests, and pushing rates with event-based and seasonal pricing.
ApartmentJet utilizes a yield optimization tool to adjust pricing on a daily basis and maximize revenue based on local events, seasonality, and demand. In the case of The Whitley, it’s ideally located for the SXSW conference. Prior to ApartmentJet, Whitley would rent their guest suites at $150 per night even during major events like SXSW. ApartmentJet is maximizing returns, and during SXSW units were booked ranging from $400 to $1100 per night.
- Manage local occupancy taxes and compliance
- Minimize disruption to residents and site team.
- Demonstrate revenue that makes this effort worthwhile
- ApartmentJet and its partner, MyLodgeTax, fully manage the filing and payment of occupancy taxes.
- ApartmentJet obfuscates the property’s involvement, and ApartmentJet monitors for resident sharing activity.
- Yield optimized pricing to maximize revenue
- B2B enterprise short-stay marketing platform for owners/operators
- Offers multifamily-level screening with TransUnion and short-stay insurance by Assurant.
- Nightly and Monthly options for furnished and unfurnished units (furnish on demand)
Results over Initial 6 Months
- Whitley has booked reservations totalling over $200,000 from Dec 2017 to June 2018 for five units.
- Whitley was paid over $99,000 for stays completed between December thru June.
- Two Bedroom unit has over $71K in current & future bookings, with an average rate of $302 per night. Comparatively, the one bedroom unit has $35K in current & future bookings, with an average rate of $194 per night.
- Results to date demonstrate two bedroom units outperform smaller units types.
- Since launch they’ve added three additional communities with nightly stays.
- To date, the Hartz properties on ApartmentJet have generated over $500K in current and future bookings.