Charlotte Perry, Owner, LUXbnb
The short-term rental landscape in Washington, D.C., has undergone significant transformation in recent years, driven by the dual market shocks of a pandemic and changing regulations. In addition, consumer preferences have been evolving.
At the forefront of this shift is Charlotte Perry, owner of LUXbnb, who has been in this business for 14 years. Her experience and adaptability have helped her not only to survive, but also to thrive in the furnished rental market. I sat down with Charlotte to discuss her insights on mid-term rentals, the impact of recent regulations, and her strategies for success.
Scott: Charlotte, thank you for joining me in this discussion. You’ve been in the short-term rental business for over a decade. How have you seen the landscape change in recent years, particularly with the implementation of new regulations?
Charlotte Perry: Yes, the market has definitely evolved, especially with the pandemic and restrictions on short-term rentals. I used to have greater than 80% of my revenue coming from Airbnb and VRBO, but in recent years, both platforms now account for roughly 25% of my rental revenue.
The shift has been dramatic, especially with the rise of mid-term rentals.
Scott: How did the pandemic impact your business?
Charlotte: The pandemic was tough, I lost 35% of my managed portfolio. All were one-bedroom units in multi-unit buildings. Travel came to a halt, and the few people moving around at that time were not willing to share common areas like lobbies and stairways. But the return of US Foreign Service personnel from our embassies to Washington helped stabilize occupancy. The pandemic also forced me to reevaluate all aspects of the business and become lean and efficient. Despite losing those accounts, my revenue declined marginally in 2020 and then in 2021 and 2022 actually surpassed pre-pandemic results.
Scott: That’s quite a recovery! The short-term rental regulations that went into effect in 2022 must have added another layer of complexity. How have you navigated those changes?
Charlotte: Absolutely. The regulations that were passed in October 2018 and enforced in January 2022 were a significant market shock. The new rules require short-term rental properties to be licensed and only owner-occupied primary residences qualify. This reduced my short-term rental inventory by 75%. More critically, it also reduced the total available short-term rental inventory in D.C. across VRBO and Airbnb, the two main booking platforms. I focused right away on growing my mid-term and long-term rentals in response. The rapid shift in how people travel, along with remote work trends fueled by the pandemic, helped me in ramping up quickly.
Scott: Speaking of mid-term rentals, how do you define that market, and why do you think it’s growing?
Charlotte: Mid-term rentals are stays between one and twelve months, and they’ve grown in popularity due to the flexibility that remote work offers. People can now work from anywhere, and many are choosing to spend a few months in different cities to try out new lifestyles. This demand has been further fueled by a parallel trend in vacations. I see retirees coming to D.C. for a month rather than a week.
Demand for multi-month rentals also comes from the fact that we are the Nation’s Capital so we have many different renters cycling through: federal government personnel, politicians, students on government internships, government contractors, our foreign service and military. In addition to our federal government, D.C. has a strong network of museums, medical centers, universities, NGOs, and international organizations, all of which bring in staff for several months at a time.
Scott: It sounds like adapting to this trend has been key to your success. What have you done to meet the needs of mid-term renters?
Charlotte: My main shifts have been focusing on the needs of longer stays, i.e, a separate work space, a more complete kitchen set-up, clothing storage, improving appeal, and listening and responding to changing customer needs. Location will always be important, however the set-up and appeal of the property are equally important. I want my guests to feel comfortable and at home the moment they arrive.
Scott: How do you approach pricing, given the changes in demand and market conditions?
Charlotte: I use sophisticated software to analyze market demand and adjust the rental rates. After 14 years in business, I know the cyclical demands for rentals in D.C.. I raise prices for last-minute bookings or high-demand periods like holidays and events. At other times, I may start with lower prices to build up occupancy, then gradually increase the rates as the property gains more visibility. It’s about being flexible and responding to the market.
Scott: What about the new regulations—how have they impacted your business?
Charlotte: The new regulations did significantly impact my inventory, as I mentioned earlier. But the mid-term rental demand has been strong. In fact, business has been growing steadily since 2020. People warned me that my business would collapse, but it’s been quite the opposite. I’ve adapted, and LUXbnb is thriving.
Scott: What other opportunities have you found in the current market?
Charlotte: I work with realtors, because a temporary turn-key rental is often needed in the buying and selling process. When relocating to D.C. buyers appreciate a soft landing in a turn-key rental. It gives them time to explore neighborhoods and schools and look for the perfect home. Likewise, sellers too appreciate the flexibility of a turn-key temporary rental while they decide their next move. Another major opportunity has been the demand from homeowners who are renovating and need to vacate during construction.
Scott: You’ve also diversified your marketing platforms. Can you speak to that for our readers?
Charlotte: Yes, the first thing I did was make changes to my own website to ensure visitors knew LUXbnb handled furnished rentals for any length of stay, from 3 nights to 3 years. Additionally, while Airbnb and VRBO are important, I’ve found success using platforms for mid- and long-term rentals along with niche platforms like Furnished Finders and Sabbatical Homes. Depending on the property and its location, I’ll choose the platforms that best match my and my owners’ goals for the property, and the renters we are looking for. This has allowed me to reach a wider pool of potential renters and not rely on any one platform.
Scott: Compliance with local regulations is critical in this market. How do you manage that aspect?
Charlotte: Compliance is key, and I always make sure my properties are fully licensed with the various licenses that D.C. issues (short-term rental, vacation rental, single-family rental). Sometimes a property needs all three! Additionally, for all rental durations under 91 nights, we collect the 15.95% sales and use tax, and remit that monthly to the Office of Tax and Revenue. It’s an essential part of doing business here, and staying compliant keeps everything running smoothly.
Scott: You’ve also explored opportunities outside of D.C.. How has that experience been?
Charlotte: Yes, we have the infrastructure in place to expand in two directions. The first is Maryland, Virginia, and Delaware vacation homes. I am seeing good consistent demand with our pilot, so we plan to ramp this up.
Scott: It sounds like you’ve built a resilient and adaptable business. Do you have any final thoughts on the future of the short-term and mid-term rental markets?
Charlotte: The rental landscape is always changing, but we know the mid-term rental market will continue to grow. We are riding the wave of market changes driven by societal shifts in how people work and travel. The demand for flexible, high-quality housing is only increasing. For now, I’m focused on providing the best possible experience for my renters and staying ahead of the market trends.
Scott: Charlotte, thank you so much for sharing your insights. Your expertise and adaptability have clearly positioned LUXbnb as a leader in this space.
Charlotte: Thank you, Scott, it’s been a pleasure partnering with Columbia Property Management. I’m excited about the opportunities ahead for both of our businesses, furnished rentals at LUXbnb and unfurnished property management through CPM.
As Charlotte’s experience with LUXbnb shows, the mid-term rental market in Washington, D.C., offers incredible opportunities for landlords who can navigate the new regulatory landscape. With the right strategies and partnerships, there’s plenty of room for success in this growing segment.
For more information about short to mid-term rentals, LUXbnb and Charlotte Perry, please visit https://www.luxbnb.com.
Scott Bloom, Owner and Senior Property Manager,
Columbia Property Management
Bloom founded Columbia Property Management in 2012. CPM’s goal is to provide a powerful, personal level of service to our clients. We focus on smaller landlords, professionally managing their assets, so they can succeed by investing in rental real estate.
Scott is an active member in multiple professional organizations including the National Association of Residential Property Managers (NARPM) and serves on the property management committee of Greater Capital Area Association of REALTORS® (GCAAR).
For more information and resources, go to www.ColumbiaPM.com
