Short-term rentals have become a hot topic and an appealing prospect for investors to broaden their portfolios. As more people have become open to traveling for longer periods of time—especially those lucky enough to be able to work remotely from anywhere—real estate investors have shifted their strategy for not only growing their business but also meeting people’s new demands. As a result, it’s no surprise that short-term rentals have played a significant role, particularly in the age of COVID-19. For those looking to buy and invest in these properties, here are some of the trends to look out for in 2022.
Finding yourself in nature
As cities have emptied out over the last two years and people have sought more space, the short-term rental market has experienced much of the same. Many who are seeking to get away do in fact want to get away—from traffic, crowds, and concrete. According to Mashvisor’s analytics as of mid-January of this year, the top-performing markets are those located in coastal areas, mountainous regions, and other rural places.
Find properties closer to nature and you’re more likely to experience being booked to capacity for much of the year.
Why not stay a while
Thanks to more accessible technology and internet service, travelers are booking longer stays with Airbnb than they have in the past. Airbnb alone experienced overall lengthier stays with bookings going for 28 days or longer. The average number of nights per booking in 2019 was 3.5; in 2021, it was more than 4, and projections expect to see continued growth in 2022.
With no real need to be in an office five days a week and the ability for many to dial in from any reliable location, why not make any trip a little longer?
The newest term? Bleisure
That is the marriage of business and leisure, meaning, now more than ever (and thanks to the pandemic for ushering it is much quicker), employees are experiencing a more relaxed, less corporate approach to their work life. Without the pressure of commuting to an office and with the rise of remote work—at least part of the time—, people are taking advantage of the opportunity to combine travel with their professional life.
According to VRBO, 44%of families are also more likely to work remotely from a new location that is not their home, so the opportunities here are not just reserved for nomads and childless couples or singles.
As we’ve become more conscious of others’ cleanliness habits(or the lack thereof), the pandemic has accelerated the use of smart technology in many areas of life, including that of renting a property. Things like smart locks and contactless technology allow guests to check-in via phone or computer rather than meeting face-to-face with a person to be let in. From keyless entries to digital welcome books and guides, and everything in between, 2022 is expected to see a rise in seamless check-in/check-out protocols that limits unnecessary human interaction.
For investors, fix-and-hold properties as short-term rentals are one optimal way to experience portfolio growth and high profitability in the industry, though that’s not to say that with a rise in popularity (and demand!)for vacation rentals, there aren’t new challenges presented. With longer stays come greater needs (amenities that allow comfortable day-to-day living), investment in smart technology, and the possibility of newly implemented regulations from local government. There are new considerations to be made and investors must act fast on making a final decision. However, once committed, the possibilities are great.
If you are ready to explore your short-term rental investment plans with Temple View Capital Funding, LP (“Temple View”), contact us today.