The Wolf of Airbnb's Downfall
Updated: Apr 26
My millennial clients often ask about listing an investment apartment or townhouse on Airbnb. Unfortunately for New York City real estate, this is mostly a dead-end.
At the core of New York City's Airbnb rules is that it's illegal to sublet an entire home for less than 30 days. If the Airbnb listing is for a room in a home with permanent residents, it's legal. But cooperatives, condominiums, and oftentimes rental buildings impose further restrictions which do not allow Airbnb subletting at all. These restrictions can be found in the house rules or on a lease rider with the aim of keeping residents safe while limiting unvetted foot traffic.
So it was a widely followed story when 'The Wolf of Airbnb' Konrad Bicher procured 18 residential leases in Manhattan, marketed them on home-sharing websites, and stiffed his Landlords on over $1m in rental payments. Add in an alleged $565,000 in Paycheck Protection Program loan abuse and prosecutors expect to have a strong case here.
For years I've had the unfortunate honor of shooting down my clients' Airbnb ambitions in New York City but for the moment it seems to have been for the better. The rise of Airbnb vacation home ownership coupled with a reduction in travel has led to an 'Airbnbust' where bookings are in decline. Incessant complaints on social media about having to tidy up and pay cleaning fees before leaving seem to be creating a large contingent of hotel-only consumers as well. The controls within New York City prevented the investment frenzy which occurred in secondary markets. Still, my clients with patience have done well here over the long term with a safe asset, higher rental prices, strong Tenants, and less headache via traditional one and two-year leases.
Questions or thoughts? Please feel free to reach out anytime and I look forward to serving you and your closest friends. I'm here for all of your real estate needs.
Best, Corey Cohen