Short Term Rentals Are Top Tier Investments

[Paul Rojas]

While many hotels and travel-related businesses saw significant declines due to the pandemic with the reduction of both leisure and business travelers, some real estate-related businesses experienced significant growth over the last two years. Short term rentals benefited and showed their resilience through adversity. Airbnb recorded its strongest quarter in 2021 with many travelers reporting that they preferred staying at an Airbnb because it allowed them to maintain their own space away from strangers while also being able to have ample room for their family members when they travel.

We have seen the investment community take notice and many have begun to take advantage of the growth in this space. Through my own experience as a Loan Consultant, I am seeing an influx of investors purchasing properties with the intention to use them as short-term rental properties.

The chart below (published by news.airbnb.com) outlines some profitable areas where Airbnb hosts with only one listing have made significant returns on their investment:

“To further inspire potential Hosts, we’ve identified the top 10 most profitable areas for new Airbnb Hosts with only one listing in the US for the first half of 2021:

1. 1. Atlanta: $8.5 million
2. 2. South Florida Gulf Coast:$8 million
3. 3. Phoenix: $6.3 million
4. 4. Los Angeles: $6.2 million
5. 5. North Carolina Coast: $4 million
6. 6. Smoky Mountains: $3.9 million
7. 7. Poconos: $3.5 million
8. 8. Houston: $3.3 million
9. 9. Catskills and Hudson Valley: $3.1 million
10. 10. Denver: $2.9 million“

American consumers have demonstrated an increased consciousness of personal space. Airbnb gives people the option to travel safely and feel comfortable by not having to cross paths with strangers such as you would in traditional hotel environments. Well-placed Airbnb properties can often generate far more monthly income than their long-term rental counterparts and can be extremely versatile. By identifying markets that are on the rise, investors can capitalize on the opportunity by meeting the demand for short term rentals in many different locations throughout the country, regardless of whether hotels are available in the area or not. We are seeing many investors find success with short term rental ownership.

Looking ahead, do you see this trend slowing down as pandemic restrictions ease or do you see this as a trend that will continue to accelerate? 

Do you think business travelers will gravitate toward Airbnb-style options when business travel picks up again? 

Do you live near any of the market areas in the top 10 list? If so, have you seen an increase in STR activity around you? 

Have you considered investing in Short Term Rentals? 

What obstacles have prevented you from acquiring an Airbnb property to invest in?