• The short-term rental market has seen tremendous growth for various reasons, such as the sharing economy.
• Investing in short-term rentals can offer higher returns since most guests stay on average two days up to three weeks at a time.
• When getting started in this industry, it is essential to research any local laws or regulations that could affect your ability to rent a property.
• Understanding these topics before jumping into the venture can ensure everything runs smoothly and maximize returns on investment.
In recent years, there has been a surge of activity in the short-term rental market. From Airbnb and VRBO to HomeAway and Expedia, short-term rental platforms have become increasingly popular as travelers look for ways to save money while still enjoying the amenities they would get from a hotel. However, if you’re considering getting into the short-term rental business, there are a few things you need to know before taking the plunge.
The Growth of The Short-Rental Market
Currently, there is a growth in a short-term rentals. As a result, the industry is asking for more properties to join this growth. Here are some reasons why it’s growing.
Sharing Economy
The primary factor behind the rise of short-term rentals is the sharing economy. Companies like Airbnb, VRBO, and HomeAway have made it easier than ever for people to list their homes online, creating an entirely new industry that has seen tremendous growth since its inception in 2008. What was once a niche market has become mainstream, with about a million short-term rental listings in the country.
Cost Savings
The cost savings associated with short-term rentals is another critical factor driving this growth. They’re often cheaper than traditional hotels and can offer more space and amenities than a hotel room would provide. Plus, they provide travelers with greater flexibility as they don’t need to commit to long-term leases or contracts before booking their stay.
Temporary Housing
Finally, there’s also been an increase in demand from businesses looking for temporary housing solutions for their employees while on assignment and individuals who need short-term accommodations for conferences, seminars, and other events. This growing demand has helped propel the industry forward and create even more opportunities for those interested in this burgeoning sector.
The Benefits of Investing in Short-Term Rentals
When investing in real estate, it’s hard to argue with the potential returns that come from short-term rentals. Unlike long-term tenants who may only stay for one year or less, short-term renters generally stay on average anywhere from two days up to three weeks at a time.
This means that you will be able to charge higher rates than you would for a long-term tenant since most people are willing to pay more for convenience and amenities.
Additionally, since most of these transactions take place online through platforms like Airbnb or VRBO (which take care of collecting payments and handling any customer service issues), it dramatically reduces administrative overhead costs compared with traditional renting models.
Tips To Get Started
If you want to get started in this industry, you’ll need these tips:
Choose the Right Property
The property you choose will be the foundation of your investment. Make sure to find one that fits your budget and meets the criteria for short-term rental occupancy. Research the local market and look at comparable properties to gauge what sort of return you can expect on your investment.
Understand Local Laws
Before jumping into this business, thoroughly research any local laws or regulations that may affect your ability to rent a property. Some cities and states have specific laws related to short-term rentals, so make sure you’re aware of any relevant legislation before going forward with an investment.
Get Help
If you have multiple properties ready for short-term rentals, you’ll need people to handle them. A property management service can help manage the day-to-day operations of your business. This can be from vetting tenants to cleaning and maintenance. It’s worth investing in a good property management company if you don’t have the time or resources to manage your properties.
Overall, while there is undoubtedly money to be made in the short-term rental market—especially if done right—investors must understand their local laws regarding such rentals and plan for any potential risks associated with running such a business. By familiarizing yourself with these topics before jumping into this venture headfirst, you can significantly reduce any potential headaches down the line and maximize your returns on investment and peace of mind knowing everything is under control!
