Welcome to the Home Stream Hustle website. We are here to empower you with the tools, trends, and truth in the real estate market. Today’s post is part 1 of 3 on the topic of short-term rentals and six excuses people give on why they don’t want to get involved with the short-term rental market.
You can also listen to this podcast episode HERE
Short-term rentals depend only on tourism
There is a huge misconception about short-term rentals depending only on tourism. If you live in a big city you would be better off there than a small or medium sized city, but that’s not necessarily true.
Sure, it does not hurt to be in a larger market, however you do not need a big city to have a good business with your short-term rental. Not all tourists choose large cities and this type of rent extends to more than just tourists on their vacations.
University tours, weddings, family reunions or people who travel to your city for work related reasons are all good targets. If your property is only a short drive (20-30 min) away from a city where rental rates are high then people may simply prefer to be a little further away and get to know the suburs. This can create nice demand for your area.
John: From my own experience I know people where I live that will simply book my Airbnb just to espace their own day to day.
For that reason, the excuse of not having you rent just because you may be in a smaller city is not valid. It is true that there may be more movement in a big city but that does not take away from the big real estate framework that is lost by fearing to invest in a smaller area.
Short-term rentals create artificially high rental rates
There’s a stigma that short-term rentals are creating artificially high rental rates. That may be true if there was a shortage of hotels. However, that not happening and won’t happen any time soon. The hotel industry is growing by leaps and bounds every day so it is hard to believe that short-term rentals can be responsible for this.
Initially short-term rentals and Airbnb were not accepted by the hotel industry. They felt threatened by this movement and of course, the pioneers in this confronted many obstacles, but the situation has changed over time. The hotel market coexists with the short-term rental market.
There are many factors that can interfere: the rental price, the area, the services that can have and, if it is a high season, your short-term rental may be the perfect option when all hotels are full and vice versa.
There is so much variety of hospitality experiences that it is ignorant to blame short-term rentals of creating artificially high rental rates.
Evan: When I think of Airbnb, I compare it with the changes that Uber has had in the field of the taxi/cab business. I think it has contributed much to the experience of hosting, created competition, created jobs and, doing these, encouraging hotels to improve their services offered and their products. And this is not a negative thing. On the contrary, the hotel industry was and is a massive market and they are the ones who run the game, but when creating a competition with different prices, different methods and services, they are forced to improve.
Stay tuned for Episode 5 (Part 2) and and Episode 6 (Part 3) of the Podcast. We’re available on iTunes, Stitcher and Google. Head over to www.startinairbnb.com to see the process John took when he started his short-term rentals and see some of the techniques and tools he uses today.
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