Short-term rentals, sometimes known as holiday rentals, are a relatively new real estate investment technique. Holiday rentals have been in existence for decades. However, it wasn’t until the advent of Airbnb, and other similar platforms, that traditional real estate investment began to consider them as a successful business.
The first step is to determine the type of market in which you wish to invest. To decide whether an investment makes sense, you’ll start by studying and assessing the data. Such as, the average occupancy rate, price per night, and cost of properties in the area you’re considering.
THREE TYPES OF SHORT TERM RENTALS
The three main categories of rental markets are, Metro markets, national fly-to vacation markets, and regional rentals. There is no right or wrong market in STRs real estate investment. However, depending on a variety of factors, all markets have variable degrees of stability or volatility. Each form has advantages and disadvantages.
METRO MARKETS REAL ESTATE INVESTMENT
Metro markets draw a large number of tourists and visitors, but are not hugely dependent on tourism. They often have large and dense permanent-resident populations, as well as occupations and businesses that support their local economies.
Short-term rental real estate investing is a relatively recent option for investors in metro areas. A big advantage of urban markets is the vast pool of visitors, which provides a wide range of renters from which to choose.
NATIONAL VACATION MARKETS REAL ESTATE INVESTMENT
Tourism is the lifeblood of national vacation markets. Consider large, popular vacation destinations accessible only by flying to their locations, such as Hawaii or Disney World.
Because short-term rental real estate investment has been a part of the economic fabric for decades without us realizing it, these markets are solid in terms of rental legislation. Short-term rentals real estate investment should be allowed only in select regions, according to affluent permanent residents and huge resort chains. Hawaii, for example, has stringent restrictions in place to ensure the happiness of its permanent population. In truth, short-term rental real estate investment is only permitted in fewer than ten neighborhoods.
REGIONAL VACATION MARKETS REAL ESTATE INVESTMENT
The majority of tourists arrive by automobile in regional holiday markets. Regional leisure destinations, like the national vacation markets discussed earlier, are completely reliant on tourism and have been for decades. Outside of tourism, there is little or no industry in these locations. Regional markets, on the other hand, are significantly more economical and easier to access than national markets for real estate investments. Because these markets are often smaller communities, real estate investment values are typically lower than those in national vacation rental markets, however this is not always the case. Furthermore, several of these areas have a higher proportion of vacation renters than permanent inhabitants, with many of them renting privately owned cabins, condos, and single-family homes rather than hotels long before the advent of sites like Airbnb.
Given their varied pool of passengers, metro cities appear to be the ideal short-term rental real estate investment on the surface. However, due to regulatory concerns in most urban regions, the most stable investment is the regional, drivable holiday rental market. Because of their price and accessibility, regional markets are the most recession-resistant.
For more real estate market investment opportunities, contact Brent Housing on 09023330000 or 09024440000.