What is happening to short-term rentals? Relax, it's doing fine
As famed investor Peter Lynch put it, "far more money has been lost by investors attempting to predict corrections than was actually lost in the correction itself."
With that being said, and given recent market uncertainty surrounding short-term rentals, we wanted to provide our insight on why we continue to believe there’s great opportunity for those who are looking into investing. Now is an optimal time as ever before when considering making an investment in rental properties!
The Misinformation ProblemWith the financial market being so unpredictable, we must be conscious of people who have a vested interest in an industry's decline. We've seen many with influential positions take to social media and news sources touting why their sector is failing—and while they may present convincing arguments, this shouldn't go unchecked as they are likely trying to gain from any drop-off in profitability or stability.
Despite the looming possibility of a recession, it's clear that those in control of large short-term rental companies still have confidence and are actively looking toward growth opportunities.
The rental industry has faced its fair share of challenges in recent times, but there is much evidence pointing to the fact that a multifaceted approach can be instrumental in attaining profitability. Doing more than simply relying on one platform - such as Airbnb or Vrbo - appears to yield better results for hosts and property owners due to four key factors: marketing campaigns, product offerings, price control strategies & user acquisition tactics. By combining these ingredients with dynamic pricing structures and superior customer service experiences, hosts become well-positioned for success within this highly competitive arena.
The Market
As the market slows and downturns occur, experienced hosts must remember to consider the possibility that their own slow season may be upon them. Taking a step back to examine this can easily reveal if your business is in fact transitioning into its seasonal slowdown - an important insight for any host looking to successfully navigate every aspect of running their venture.
The Hosts
The number of successful hosts has dwindled, and many attribute this to the growth in short-term rentals. However, demand for these services is booming - unfortunately supply isn't keeping up with it! This means that more listings aren't actually dragging down the market - instead there's a significant gap between what people are looking for and what they can access.
STRs have seen a dramatic decrease in occupancy—a stark contrast to the boom of recent years. By comparison, traditional hotels manage 65-80% occupancy on average - making it clear that something has changed for short term rental hosts.
What You Need to Understand About Short-term rentalsSTRs have been a profitable investment for savvy investors, but it may not always feel that way when markets around you are crashing. But no need to worry- short term rentals are doing fine!
Thank you for taking the time to read this blog! We hope that you have gained some useful insights on how to navigate through the short-term rental market, even in times of economic uncertainty.
At our website and Youtube channel, you can find plenty of resources and tips tailored specifically for short-term rental owners and property managers
