STR Investing: Benefits & Trends
The short-term rental (STR) industry has become an attractive investment option for many investors– both veterans and first-timers– in recent years. With the consistent and ever-growing popularity of platforms like Airbnb, Vrbo, Guesty, and more, investing in STR properties has only become more accessible and profitable.
Below you’ll find Summer’s top benefits of STR investing & trends we’re continuing to see as we move further into 2023:
1. Higher rental income. A significant advantage of investing in short-term rental properties is the potential for higher rental income than what one may see with long-term rentals. Unlike traditional long-term rentals, STRs can generate higher rental income, largely due to the fact that their owners– or property-management providers, like Summer– are able to charge premium rates during peak seasons and sought-after events, like local music festivals.
2. Flexibility. In addition to the flexibility allotted when it comes to price adjustments, short-term rental properties offer investors flexibility in another big way: as the owner of an STR property, you’re able to control the home’s availability without blackout dates, so that you’re able to spend time at, and enjoy, your home-away-from-home. When you have long-term tenants with leases, you miss out on the luxury of having access to your home.
3. Low startup costs. Getting started as an STR investor requires less capital than traditional rental properties. With the rise of vacation-rental management companies, investors can hire professionals to manage their properties, making it easier for them to enter the STR market.
What trends are we seeing in 2023?
1. Relatively quiet, rural areas. With the consistent rise of remote work, the general preference for more space, and an increasing desire among folks to spend quality time with loved ones, rural short-term rental properties are expected to remain in high-demand for the foreseeable future. Properties within close proximity to national parks, quaint towns, and mountain ranges– for skiing, hiking, or simply the breathtaking views– are predicted to stay popular among both potential homebuyers and short-term guests looking for a change of scenery.
2. Sustainability. The growing awareness and concern surrounding the impact of travel and real estate on the environment has led to an increase in demand for more eco-friendly rentals, making investing in a vacation home with sustainable features– such as solar panels, energy-efficient appliances, composting bins, and thoughtful building materials– a smart investment for the future.
3. Luxury. Luxury STR properties have, as one might expect, always been in high demand, but the pandemic has undeniably fueled a surge in bookings for higher-end homes. With travelers seeking more privacy, space, and convenience after what has been a trying couple of years, luxury short-term rentals with bonus amenities like private pools and hot-tubs, fire-pits, large entertaining areas, chef’s kitchens, game rooms & more are predicted to remain just as popular throughout 2023.
"There are many learnings– built over the course of years– around what makes a good property, what items every rental needs, and how to best market and price a rental.” - Paul Kromidas, Founder & CEO
4. Management companies. As the STR market continues to grow steadily before our very eyes, the demand for professional property management companies is naturally increasing in parallel. Second-home owners– especially those whose primary residences are a significant distance away– are turning to management companies that specialize in optimizing vacation properties for short-term guests. Companies like Summer handle everything from listing and booking, to cleaning and maintenance, to guest communications and beyond, making earning passive income easier than ever before.
"Once you buy– or partner with us to buy while you try– you can count on us to be your trusted property manager. We take the headache out of buying, renting out, and managing a second home. Each trip to your Summer home will require far less effort– and far less money– out of your pocket." - Kyle Jessey, Head of Strategy & Planning
All in all, with the right investment strategy and an efficient, dedicated partner like Summer, investing in short-term rentals is a profitable venture for investors looking to diversify their portfolios, as well as for those looking for a place to enjoy with loved ones for years to come while mitigating risk and eliminating labor.