One of the biggest emergent trends in the real estate industry following the market’s gradual rebound from the COVID-19 pandemic is investing in vacation rental properties. The growing popularity of digital platforms featuring these types of properties such as AirBnb and VRBO have fueled the wave of real estate investors looking to cash in on the increased demand for temporary getaways in highly desirable locations.
Following nearly two years of strict quarantines and restricted travel opportunities, the U.S. economy and aspiring travelers are looking to release pent-up energy and finally fulfill their wanderlust dreams. More than 86% of travelers around the world reported that they are willing to embark on domestic vacations after being vaccinated, with 34% of Americans claiming they have a minimum of three domestic trips planned in the upcoming year based on a poll conducted by TripAdvisor.
Regardless of what metrics you look at, one thing is clear: people are once again traveling for leisure—albeit with one small caveat. Due to ongoing social distancing protocol, private vacation accommodations are now the preferred destination as opposed to normal hotels. With the advent of telework options, workers now have the freedom to book a family getaway without having to miss out on work obligations, family time or security.
The median monthly income for a property listed on AirBnb ranges anywhere from $1,249 to $5,780 across the top-performing U.S. markets, and the upper percentile of VRBO property owners netted over $110,000 annually. However, there are some important distinctions between these two leading property listing platforms.
VRBO allows property owners to rent their entire residence, whether it’s a single-family, condo, apartment, mobile home or studio. AirBnb landlords have the option of renting out single rooms or the entire space. They can also feature shared rooms, which allows them to tap into the college student customer base that are generally more budget conscious.
There are a number of potential benefits of investing in a vacation rental property, which include:
It is important to understand that while there are some great advantages of owning a rental property, it is not without its challenges. Here are some potential hurdles landlords may face:
Are you ready to invest in a vacation rental property? Having a trusted hard money lender in your corner makes all the difference in building a sustainable and lucrative investment portfolio. Gauntlet Funding has a long track record of success in assisting real estate investors reach their financial goals. Contact us today to learn about how we can get you the capital you need to launch your investment business in a fraction of the time it takes conventional lenders.