Real estate is a wonderful playground for investment and building wealth. While there are many options to consider when investing in real estate, one that is getting a lot of attention from investors today is short-term rentals.
According to research, there were already 252 million homes in the US in 2018, and 3.5% of these properties are second homes. People would usually buy these homes so they’ll have a comfortable place to stay during vacations or spend their retirement. However, investors use these homes to earn passive income.
Now, do you also plan to invest in these properties? Great opportunities await with Avery Carl real estate rentals.
In this article, you will learn about the short-term rental market and how to guarantee success when you engage in this type of business.
The Short-Term Rental Market
Do you know that short-term real estate rentals have been around since the 1950s? Advertisements and listings were published in newspapers to help people easily find a vacation home to rent for a short period of time. As for the owners, it was an opportunity to capitalize on their second homes and earn income.
Years after, the demand for short-term rentals continued to grow. More vacationers chose to stay in a fully furnished home or apartment rather than a conventional hotel or motel. The industry became a huge success, that the estimated total consumer short-term rental market in 2018 was valued at $107 billion, as per Skift Research. Grand View Research also projected that the industry may reach $113 billion, with a compound annual growth rate (CAGR) of 3.4%, by 2027.
There was just a bit of a setback when the COVID-19 pandemic started. Because of the strict protocols, travel plans were canceled. This affected the tourism industry, including the short-term rentals market. By the end of 2020, the market saw a drastic drop in bookings, leading to significant losses.
Thankfully, we are now slowly seeing states easing their lockdown measures and the travel industry starting to bounce back. This also means that short-term rental investments, like Avery Carl real estate rentals, look promising once again as they have been over the years.
Advantages of Owning Short-Term Rentals
Short-term rentals are an excellent investment opportunity for both experienced and novice investors. Here are the greatest benefits you can enjoy from owning these properties.
As the owner, you have the power to choose how long you allow your property to be rented for each of your guests. You can have it booked for days, weeks, or months. This flexibility gives you the freedom to use the property any time you wish.
Good Investment Returns
Most individuals are willing to pay a premium price for an excellent holiday experience. You can also adjust your rates depending on your area’s high and low seasons. You can also set a minimum length of stay during peak seasons, so you can maximize your profits.
You can deduct a lot of the expenses from your taxable income when the tax season comes due. These include, but not limited to, operating expenses, mortgage interest, repairs and maintenance, and depreciation. However, tax laws can differ from state to state, so be sure to check your local regulations.
Less Wear and Tear
In long-term rentals, serious wear and tear of the property, as well as of its furniture and other fixtures, is expected due to overuse. Short-term rentals, on the other hand, will experience less of these effects, as guests would move in and out frequently, and you can do maintenance tasks after each stay. As your property is regularly maintained, you can avoid major repairs which can cost a lot of money.
Tips for Succeeding in Your Short-Term Rental Investment
No matter what kind of business you want to venture into, you need to have a plan. On top of that, insights from experts are most helpful. This is why attending industry summits, such as the Real Estate Masters Summit, is a must.
All event speakers are respected in their respective real estate niche, including Avery Carl from the Short Term Shop.
Aside from seeking input and advice from industry leaders, there are also basic strategies that you should implement on your end.
Don’t Limit Your Property for Vacation Purposes
Making money with short-term rentals can be easy as advertising it as a vacation home. But you can also market your property for other purposes. For instance, you may rent it out to those who are looking for a temporary house while their house is being renovated. You can also make it available to those who are coming to town for a medical procedure. A tactic you can follow is to partner up with hospitals in your area to find potential tenants for this purpose.
Use Social Media
In today’s highly competitive market, it’s not enough that you only rely on listings and other booking platforms. Social media plays a huge role in influencing people’s daily activities and decisions. In fact, according to WebFX, 52% of Facebook users are inspired to travel just because they saw posts from their friends. That is why it always makes sense to take advantage of this trend.
Make sure to create Facebook, Instagram, and YouTube pages for your rental property. You can encourage reviews, so other people will learn more about your property, or create contests and surveys to stir up excitement. You can also create stories and video footage showcasing your property. You can even collaborate with influencers on these social media platforms.
Take Advantage of Technology
Technology has made a significant impact on our daily lives, and the same goes with the short-term rental market. The Internet has become the main resource for people looking for short-term rentals to book. So, if you’re not using technology, you’re missing a lot!
There are different avenues where technology plays an important role in making your business successful. For example, automated communication makes sure that you can reply to all customer inquiries immediately. It also allows you to display the feedback of your guests which is free advertising on your part.
There are also software and solutions that can make management more efficient.
Bring Out That “Wow” Factor
A secret weapon in achieving success in the short-term rental business is being unique. In a way, your property should have that “wow” effect on your potential guests. For example, you can go the extra mile by adding smart amenities, like those which appeal to millennials. You should also ensure that your property has a good curb appeal.
However, you don’t always need to spend that much to achieve a “wow” factor. Simple welcome treats that get your guests refreshed as they arrive can also leave a lasting impression.
The short-term rental market is lucrative and offers a lot of benefits. But it still requires hard work.
Regardless, it’s the best time to take a look at Avery Carl real estate rentals now that the economy is slowly recovering. And, applying the above-mentioned tips will surely get your guests booking in no time!
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