Pillow Launches Platform To Track Residents Using Airbnb
A new short-term rental service wants to make things easier for building owners. San Francisco-based Pillow launched a new service today that provides an all-in-one platform for residents and owners to monitor short-term rentals at a property.
Pillow Residential provides automated online compliance, safety, payments, monitoring and controls. Pillow CEO Sean Conway said solving some of the problems associated with short-term rentals is a huge passion.
“People should have the ability to live and work from anywhere,” Conway said. “Residents are spending in San Francisco and other urban markets anywhere from 25% to 30% of their income on rent.”
He said providing residents with the option of short-term rentals adds additional income while also making it cheaper for people to travel. The platform also makes it easier for building owners to get on board with short-term rentals. According to Pillow, 60 million guests stayed in short-term rentals in 2016 with 66% in urban areas. But many of them are in violation of a building’s lease or homeowner association rules.
Pillow's program goes beyond what is offered through Airbnb’s Friendly Builder’s Program, which Airbnb launched last year as a revenue-sharing platform with property owners and residents. Under Pillow Residential, building owners can control the number of nights residents can rent in a given year, provide an online lease addendum, gauge which guests are coming and when and provide accessibility to cleaners who can come in who are all background-checked.
Pillow Residential makes its money either through recouping a percentage of total rental revenue or a fixed fee, depending on the size and location of the building.
Residents can set up and manage listings across multiple sites, such as Airbnb, HomeAway, VRBO and Booking.com. By renting out their homes, average users generate about 10% of their rent back each year.
Pillow Residential has enrolled 4,000 units in San Francisco, Oakland, Denver, Eugene, Salt Lake City, Louisville and Albuquerque. The company is working with Marian Group, Virtu Investments and Peak Residential. Pillow Residential partnered with Veritas in San Francisco. While the program is mostly in the West, Conway said he expects more property owners throughout the country to sign up by the end of the year.
Virtu was among the first to sign up for Pillow Residential and has already piqued interest from residents. At the developer’s Archer Tower in Denver, 75% of residents signed up for the Pillow Residential service, according to Virtu Chief Operating Officer Blake Hayunga. He said he anticipates the 316-unit tower to be popular for short-term rentals because it offers amenities such as a 3K SF lounge, a gym and a yoga studio. He plans to bring this service to 11 projects.
For Hayunga, working with Pillow Residential added another amenity to attract residents. In addition to Denver, a property in Santa Fe, a popular vacation spot, joined the platform as well as an upscale property in downtown Eugene. He said these locations are desirable for mobile, young professionals.
On average millennials travel 40 to 50 days per year with their apartments sitting vacant, he said. Having a program like Pillow Residential creates an additional amenity that also makes apartments more affordable for residents.
“You’re not creating a new service as much as you are organizing one that is already there and making it work for you,” Hayunga said.
He said whatever revenue they earn off of the rentals, Virtu puts back into resident services.
“Apartment owners do not innovate easily,” Hayunga said. “It is a slow-moving train and those that are willing to innovate in some meaningful way outperform. As an owner thinking about doing something like this, there is a competitive advantage.”
Pillow raised $13.5M in Series A financing led by Mayfield with participation from Sterling Equity, Peak Capital Partners, Expansion VC, Chris Anderson, Gary Vaynerchuck, Dennis Phelps and Veritas Investments. Several of these investors also are participating in the Pillow Residential program.