Now more than ever, people are skeptical about investing in short-term rentals. With economic uncertainty and #airbnbust trending on Twitter, it’s no surprise that folks are wary of what’s to come in the short-term rental market this year. However, the future of the industry is still looking bright. We teamed up with our partner Revedy to set the record straight. Ready to discover the truth behind these trending misconceptions and why now is the time to finally jump on that vacation rental investment? Let’s dive in.
1. Occupancy is plummeting and #airbnbust is real
THE TRUTH: Short-term rental owners shouldn’t be quick to compare performance to 2021 and 2022 numbers, as a pent-up desire to travel after lockdowns drove record-high demand. Now that things are returning to “normal,” AirDNA is predicting an average occupancy of 56.4% for 2023, which is still significantly higher than pre-pandemic levels. At AvantStay, our forecasted occupancy rates for Q1 are trending at 32% higher than the competition.
Seasonal booking trends vary, but many markets saw extended peak seasons in 2022 with strong occupancy throughout shoulder seasons. Experts predict that this trend will continue in 2023 as people look to save money traveling during slower seasons.
2. Markets are oversaturated—it’s too late for new investors to get started
THE TRUTH: There’s no time like the present, especially when it comes to investing in short-term rentals. According to Revedy, institutional and large portfolio investors own 65% of multi-family assets, 3% of single-family assets for long-term rentals, and less than 1% of assets for short-term rentals. Now is the perfect opportunity for smaller investors to purchase ahead of the large-scale capital wave. Also, no more than 5% of the industry is what Revedy considers an investment-grade asset, so you can easily outperform the competition.
3. I’ll earn less with a premium asset
THE TRUTH: The demand for premium vacation rentals is on the rise as more high-income travelers are interested in exclusive accommodations. Vacation rentals that offer professionally designed spaces with top-tier amenities and experiences can charge higher ADRs than upscale and midscale rentals. Our experts are forecasting that AvantStay’s average ADRs will be 34.5% higher than our market cohorts for the remainder of Q1. Also, if you’re worried about the starting point of investing in short-term rentals, you can still find good cap rates at all different price points.
4. Market regulations make it too risky
THE TRUTH: There are still plenty of low-regulation markets. Plus, investing in a market with established and stable regulations can be a low-risk play. Revedy actively monitors market regulations so you can make informed decisions, while AvantStay’s permitting and tax professionals maintain good relationships with local jurisdictions so your investment is always compliant.
5. I’ll lose money with a management company—I’d rather do it myself
THE TRUTH: According to Revedy, investors that switch to professional management see a 25% increase in top-line revenue on average, while AvantStay delivers 35% more revenue than the broader market. Dynamic revenue management and multi-channel distribution are two of the biggest drivers of these great returns. First-time investors often waste a lot of time and money operating short-term rentals on their own. A management company will take care of everything from strategic pricing and marketing to permitting, interior design, and more.
When you work with Revedy and AvantStay, you get an end-to-end solution for buying and managing vacation rental homes. Revedy makes investing in short-term rentals seamless. Their experts understand every nuance of finding, acquiring, and operating vacation rentals and can help you make the best decision possible. They even have access to upcoming opportunities and off-market deals.
Once you have your vacation rental investment secured, leave the rest to AvantStay. We offer full-service vacation rental management programs to give you peace of mind. From financials to design to maintenance, we take care of your home as if it were our own. Our proprietary tech suite powers bookings, operationalizes in-field management, and activates an elevated guest experience. We take care of all the work to maximize your home’s income so you can sit back and relax—it’s that simple.
Interested in learning more about what it means to partner with AvantStay? Our team is ready to help. Get started with our vacation rental management experts today!