How To Prepare For Short-Term Renters Next Door

My neighbour Bill just told us he is going to rent out his home on a short-term-rental site. Our neighbourhood has always been quiet and peaceful and filled with year-round, full-time residents, so this is new and sort of scary to all of us. How concerned should we be?

Signed, Bill’s Neighbour (a fictitious human)

Dear Bill’s Neighbour:

It was nice of Bill to mention that he was going to be renting the house. I note, however, that you did not say he asked if you would mind, so we have to assume he doesn’t care. Is Bill a little bit of a jerk? A “shovels his driveway but not the old lady across the street” kind of a guy? It doesn’t matter because Bill is now dead to us. You and your neighbours have to worry about yourselves.

The amount of concern you should have about the new, rotating cast of renters next door ranges from “none at all” to “Why is there a car in our pool?” To assist you and your community in dealing with this uninvited incursion by unknown vacationing-type people and other itinerants into your peaceful neighbourhood, here are the various types of short-term renters, and a colour-coded threat level and action plan for each.

Renter type: Invisible

Identified by: Nothing. You literally won’t know they’re there. They are quieter than the neighbours who own the house. This type of renter most likely represents the vast majority of short-term renters; people who just want a quiet family vacation somewhere cool in a nice house. Maybe some porch beers. Wave if you see them, which you won’t.

Threat level: Cellophane. A complete absence of threat. You don’t need to do anything unless you want to, which you won’t.

Renter type: Cool New Friends

Identified by: Musical selections—be it Lizzo, Kenny Chesney or The Carpenters—that coincidentally match yours and are played at socially appropriate hours and decibel levels. They beckon you to come over for drinks when they see you because they want to learn more about your interesting home town. You dig them. You swap emails and make plans to connect when you’re in their home town.

Threat level: Pink… for—LOVE them!!

Renter type: Gang of Inconsiderate Clods

Identified by: Large groups who you can hear talking even when inside your own house because they are always talking at the top of their lungs, though standing mere feet apart. Their cars fill your neighbour’s driveway, part of the street, and will, at some point, block you from leaving your driveway. They give you stink eye when approached about moving the cars. Their music and parties are not quite loud enough and not quite late enough to force you to call the cops, but you’re always a few seconds away from dialing those three magic numbers.

Threat level: Chartreuse. Ignore them to the extent possible. They will be gone in a week.

Renter type: Only People on the Planet

Identified by: Late night parties with music that appears to be entirely bass, screaming fights on the front yard, toddlers meandering aimlessly and unchaperoned on the street, animals of all sorts running off leash, at least three appearances by the cops. Hammering on your front door at 3 a.m. by confused/lost renters demanding to be let in or else they’ll “kick in your teeth.” These renters have zero respect for, indeed seem unaware of, the fact that they are not the only people on Earth.

Threat level: Red mist. Before you wake up in the backyard of Bill’s house with a gas can and a lighter, with no idea how you got there, have a heart to heart with him. Tell him his renters are not only destroying the fabric of the community and violating the town noise ordinances, but they are trying to saw up his wooden patio furniture for the fire pit, have dumped a bunch of green Jello powder into his pool, and are turning his garage door into a mural of some sort. Don’t feel bad about lying. It’s the least of the sins currently occurring on or near your property.

Renter type: Rave Advertised on TikTok

Identified by: Thousands and thousands of people. Unconscious or tweaking partiers everywhere, including your bathtub. (Does it matter at this point how they got there?) SWAT team response with National Guard unit on standby.

Threat level: For Sale. Move out as soon as you can. Then list with a local real-estate agent who is a good liar (redundancy alert), or find out which short-term-rental site Bill is using.

Manhattan’s office-vacancy rate climbed to more than 15% this year, a record high. About 80 miles away in Philadelphia, occupancy also is at historically low levels. But a 24-storey office tower located between the two cities has more than doubled its occupancy over the past five years.

Developer American Equity Partners bought the New Jersey office tower, known as 1 Tower Center, for $38 million in 2019. At the time, the 40-year-old building felt dated. It had no gym, tenant lounge or car-charging stations. The low price enabled the firm to spend more than $20 million overhauling and luring tenants to the 435,000-square-foot property.

Now, the suburban building is nearly fully leased at competitive rents, mopping up tenants from other buildings after the owner added a new lobby, movie theatre, golf simulator, fitness centre and a tenant lounge featuring arcade games and ping-pong tables.

“Our tenants told us what they needed in order to fill up their offices,” said David Elkouby , a co-founder of American Equity, which owns about 4 million square feet of New Jersey office space.

The new owner also liked the location at the 14-acre hotel and conference-centre complex, off the New Jersey Turnpike’s Exit 9 in East Brunswick. The site is a relatively short commute for millions of workers in central New Jersey and is passed by 160,000 vehicles daily.

The property’s turnaround shows how office buildings can thrive even during dismal times for most of the U.S. office market, where vacancies remain much higher than pre pandemic.

Success often requires an ideal location—one that shortens the commute time of employees used to working at home—and the sort of upgrades and amenities companies say are necessary to lure employees back to the workspace.

One Vanderbilt, a deluxe office tower with a Michelin-star chef’s restaurant and plenty of outdoor space in Midtown Manhattan, is fully leased while charging some of the highest rents in the country.

The 11-story Entrada office building, in Culver City, Calif., is making the same formula work on the other coast. It opened two years ago with a sky deck, concierge services and recessed balconies. A restaurant is in the works. The owner said this month that it has signed three of the largest leases in the Los Angeles area this year.

1 Tower Center shows how the strategy can be effective even in less glamorous suburban locations. The tower is prospering while neighbouring buildings that are harder to reach with outdated facilities and poor food options struggle to fill desks even at reduced rents.

The recent interest-rate cut and reports that some big companies such as Amazon .com are re-instituting a five-day office workweek have raised hopes that the office market might be getting closer to turning.

But with more than 900 million square feet of vacant space nationwide and remote work still weighing on office demand, more creditors are seizing properties that are in default on debt payments.

Rates are still much higher than they were when tens of billions of dollars of office loans were made, and much of that debt is now maturing. The recent interest-rate cut doesn’t mean “office-sector woes are now over,” said Ermengarde Jabir, director of economic research for Moody’s commercial real-estate division.

Lenders are dumping distressed properties at steep discounts to what the buildings were worth before the pandemic. Some buyers are trying to compete simply by cutting their rents.

“Most owners don’t have the wherewithal to do what is required,” said Jamie Drummond, the Newmark senior managing director who is 1 Tower Center’s leasing agent. “Owners positioned to highly amenitise their buildings are the ones who are successful.”

HCLTech, a global technology company, illustrates the appeal. It greatly expanded its presence in New Jersey by moving this year to a 40,000-square-foot space designed for its East Coast headquarters at 1 Tower Center.

The India-based company said it was drawn to the building’s amenities and design. That made possible a variety of workspaces for employees, from quiet nooks to an artificial-intelligence lab. “You can’t just open an office and expect [employees] to be there,” said Meenakshi Benjwal , HCLTech’s head of Americas marketing.

HCLTech also liked the location near the homes of its employees and clients in the pharmaceutical, financial-services and other businesses.

Finally, it didn’t hurt that the building is a short drive from nearby MetLife Stadium. The company has a 75-person suite on the 50 yard line where it entertains clients at concerts and National Football League games.

“All of our clients love to fly from distant locations to experience the suite and stadium,” Benjwal said.