Are short-term rentals (STRs) part of your long game?
We’re excited to announce the launch of our STR Marketplace, where you can explore our inventory of properties that are typically used as vacation or seasonal rentals.
In addition to all the financial analysis tools you’re used to seeing on our property listing pages today, we’ve added a couple more to help you analyze these short-term rental properties.
The first is estimated daily rent and occupancy, so you can calculate the estimated rental income earned per year, depending on how often it’s rented out.
You’ll also see a section for rental comparables, which pulls more detailed data from existing short-term rentals in the area with similar characteristics. These key pieces of information like average daily rent, annual revenue, and occupancy rate can be adjusted for each property, giving you more flexibility to see the income potential.
Recent trends suggest it may be a good time to add STRs to your investment portfolio. Here are 5 reasons to consider investing in short-term rentals in 2022:
- Vacation rentals remain popular. There’s consistent demand for STRs, according to recent research from iPropertyManagement, a data resource for landlords, tenants, and investors. For example, the hotel industry loses approximately $450 million in direct revenues per year to Airbnb.
Choosing a rental property meets travelers’ criteria for more meaningful experiences, with 77% of Airbnb guests reporting that they want to live like locals while on vacation. And, 86% say their holiday rental is more conveniently located than a hotel.
In addition, 23% of Americans report engaging with STR platforms like Airbnb or Vrbo for vacation lodging. STR stays are also popular worldwide, with 450 million people across the globe using vacation rentals.
- STRs can help you diversify your portfolio. Investing in STR property allows you to add an increasingly popular element of the single-family rental (SFR) sector to your real estate portfolio. Bloomberg reports that almost 30 cents of every dollar spent in hospitality today goes toward STRs and demand has increased by more than 60% from a year ago.
And you don’t need Airbnb-level resources to invest in STRs. Most vacation rental companies (70%) are small and manage anywhere from one to 19 rental units, making them accessible for investors looking to expand their property portfolios.
- COVID-19 has shifted accommodation preferences. With social distancing still widely recommended, today’s vacationers are seeking more space. Private room accommodation has decreased in popularity by 99%, while villas have increased in popularity by 61%, bungalows by 60%, and cabins by 80%.
Families are seeking more room to spread out, with both Airbnb and Vrbo reporting increases in rentals of homes that can accommodate more people in 2020 and 2021. Younger travelers are also gravitating toward spacious vacation rentals over hotels: Eighty-one percent of Generation Z travelers have stayed in a vacation home, cabin, or condo.
- STRs offer flexibility for investors. Purchasing a STR gives you the opportunity to lease the property short-term or long-term, with each having its own distinct pros and cons.
People who like to actively own and manage real estate may find STR investing to be the ideal option. (Investors looking for a property that generates more predictable rental income and is easier to manage may find a long-term rental to be the best choice.)
- It’s easy to purchase STRs through Roofstock. STR transactions follow the same process as other investment properties available through Roofstock. If you’re interested in investing in STRs but haven’t known where to start, Roofstock makes the process straightforward and accessible.
And with 83% of travelers preferring to spend their vacations near water, Roofstock’s current rental properties in top vacation destinations in Florida and Texas fit the bill. We’re continuing to add inventory to the STR marketplace, so check back often to explore the newest properties available.
Visit Roofstock’s STR Marketplace to browse our selection of vacation-ready rental properties.
A short-term rental is a dwelling that is rented or leased for 30 consecutive days or less. Before closing, investors should verify there are no current or proposed legal restrictions prohibiting use of property as a short-term rental.