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Flexibility In WFH Accommodations Leads To Spikes In The Hot Rental Market
If you got real sick of your house in 2020 – you’re not the only one.
Committed to our collective basements, bungalows, and bedrooms over the COVID-19 pandemic, quarantines were often spent in sweltering solitude, where passing fleeting moments of joy were conceived from the briefest of hints of incoming grocery deliveries and singular lines on white testing strips.
And let’s be very real here – across the earliest years of the 2020s, the most tropical destination we explored was the sultry and inviting carpeted hallway connecting our bedrooms to the kitchen fridge.
We needed to get out.
We still need to get out.
And nothing quite sounds like getting the hell away from our living room like a cold cocktail and a bed a thousand miles away with a view that points absolutely anywhere other than what we’ve been stuck looking at for the past however many months as we slip slowly into the maddening confines of our own existential crises and allegiance to a particular pair of sweatpants.
America needs to rid itself of its rabid cabin fever, and 2024 may just be the year to do it.
The sun is finally shining down favorably on travel once again, which means more tourists packing up and leaving the confines of their residences to seek refuge in adventures, new experiences, and bedsheets that are definitely not our own.
More tourists means more lodging. And it doesn’t take a supply and demand pro to connect the dots here.
Lodging demands are up, and therefore…prices are set to rise.
In fact, they already have.
According to a BCD Travel report, hotel costs are set to climb nearly 7% in 2024, with demand surpassing availability. And with this pivot in the market, many wide-eyed wanderers are turning to the closest alternative: short-term rentals.
This means the key to your investment strategy this year may just be picking up property in one of the hot U.S. markets, climbing ranks and taking names, boasting fast-growing metrics, and welcoming travelers with open arms.
So, what’s next for you?
Read on for our recommendations and guidance on why now may be the right time to invest in rental real estate and claim your stake in the ever-rising popularity of short-term rentals and the steady stream of income that can come with it.
Short-Term Rentals Are Making A Serious Comeback
While hotel prices are climbing, so are the profitability and popularity of short-term rentals, the easy alternative to those looking for inexpensive housing in destination cities.
And while some of you may balk at the thought of staying in a single-family residence over a high-rise Hyatt, the numbers don’t lie.
As of 2022, VRBO has 2 million properties listed, operating out of 190 countries worldwide. Still not convinced? Tell that to their 48 million users.
2022 saw over 393 million nights stayed at Airbnb properties, a staggering 31% increase over the year prior. At the end of Q2 2023, Airbnb had officially garnered over $2.4 billion in revenue, achieving over 18% growth year-over-year. With 6 million active listings and a user base of 150 million, this is only expected to climb.
So, what makes these hotel alternatives so popular for domestic and international travelers? Besides competition on price, is there that big of a difference between them and a chain brand?
The resounding answer for many? Yes.
According to a recent report by Forbes, short-term rentals provide experiences that can rival resorts, ranging from scenic ocean views to all the comforts of home one usually has to forgo when on the road. But even with strong comparisons on amenities, short-term rentals often encourage more neighborly experiences that are more personalized.
Here, property hosts are ranked and rated just as guests are. The lower the rating? The less likely they are to bring in revenue.
While you may have seen some above-and-beyond work at flashy resorts, you likely haven’t seen the lengths one will go to keep that five-star rating to ensure a healthy turntable of tenants.
With travelers being quite literally wooed into positive feedback, is it really a surprise more and more budding tourists are opting for these experiences as they venture free from their cocoon of post-pandemic hibernation?
No, it’s not. And we saw it coming.
Because beyond the difference in dollar signs, there’s another sweeping change hitting America that is a key reason why so many are looking to short-term rentals for their next getaway.
Post-Pandemic Conditions Embrace Remote Working
Yep, those four years inside the confines of our home offices and desperately trying to connect the wi-fi in our dining rooms has equated to a stubborn resistance to return to traditional office culture.
According to Forbes, over 12% of full-time employees in 2023 were working remotely, with over 28% working hybrid. Even more convincing? It’s estimated that by 2025, over 32 million Americans will be working from home.
And while working remotely comes with some rules and regulations depending on the organization, others allow you extreme flexibility to log on in varying locations across the world (take Airbnb’s “work from anywhere” policy as a clear example).
How does that translate? More and more workers are packing up and staying in short-term rentals in order to blend the best of both worlds – getting the hell out of their houses and getting into a remote environment that still supports their ability to tackle a virtual workday.
For many, this means out with the generic hotel chains and in with more residential, exploratory experiences that have made up for the last four years, creating fetal position imprints in our living room couches.
Now that we’ve doubled down on the exciting rise of short-term rentals, there’s no need to make even more obvious what a prime investment these properties can be in the new year.
However, with rising mortgage rates and an unpredictable housing market, not everywhere in America may be the right fit for your capital.
Let’s think smart to get the most out of your dollar and examine cities that may get you the most return.
Cities Perfect For Your Investment Capital In 2024
When considering where you should consider investing, there are a few general rules we encourage you to keep in mind.
Aim For Cities With Booming Populations
No, this doesn’t have to mean the most populous downtowns; however, you do want to direct your dollars to destinations that are thriving and scaling. You want renters to have enough to do nearby to keep themselves entertained and enough amenities so that they feel well-supported throughout their stay.
Take Austin, Texas, for example. Rich with culture, live music, and the best BBQ this side of Kansas City (we said what we said), it saw tremendous growth in the post-pandemic era, as did its lesser-known suburb of Georgetown, which grew over 14% from 2021-2022 (making it officially the fastest growing city in the U.S.).
Property Location Is Key
Renters want accessibility.
Keep in mind that not all travelers come with vehicles, and some long for walkability. When seeking properties, look to the nearest grocery stores, restaurants, and areas of commerce. How far are you?
While comfortable distance to all that’s happening is one thing to consider, also aim for neighborhood safety. Communities with lower crime rates are more desirable, as are those with good infrastructure.
Opt For Top Rental Destinations
Keep an eye on top-trending destinations as you consider where to plant your rental roots. According to Airbnb, top domestic destinations for U.S. travelers (as of June 2023) were:
- Louisville, Kentucky
- Laconia, New Hampshire
- Lexington, Kentucky
- Pittsburgh, Pennsylvania
- Panama City, Florida
- Milwaukee, Wisconsin
- Surf City, New Jersey
- Bolivar Peninsula, Texas
- Kansas City, Missouri
- North Topsail Beach, North Carolina
Top-booking categories on Airbnb? From May 2022 to March 2023, travelers were all about beach(es), amazing pools, iconic cities, and national parks.
Why is this important? These are key characteristics of where remote workers are looking to catch calls while at their proverbial desks.
Beyond the above, make sure to keep factors such as affordable housing prices and landlord-friendly state laws in mind.
With that, let’s dive into a few U.S. cities, topping our own list of hot rental markets to watch.
Midwest And Coastal Cities Trending Big For Rental Real Estate
You heard Airbnb – sand between our toes and a whole lot of nature are calling short-term renters’ names. Want to know a few tried and true (and up-and-coming) locales we’re eager to keep our eyes on?
- Austin, Texas
- Nashville, Tennessee
- Denver, Colorado
- Atlanta, Georgia
- Ellsworth, Maine
- Sneads Ferry, North Carolina
- Port Angeles, Washington
- Myrtle Beach, South Carolina
New To Investing? 2024 May Be The Right Year To Build Your Portfolio
A key factor to building a successful real estate investment portfolio is diversification.
Investing in a variety of asset types can ensure a steady flow of passive investment, as well as raise the chances of revenue coming back quickly.
Short-term rentals can be an unlock to this strategy, especially if you’re able to move quickly and set up your property before the wave of summertime travelers hits.
Eager to get started?
Read on to learn more about jumpstarting your career in real estate rental investing.
Uncover Targeted Opportunities and Pursue Next Steps – All In One Place
Your secret tool to key into what may make a community ripe for short-term rental investment?
PropertyRadar.
There’s no better source of accurate, up-to-date information on property and property owners than public records. But who has time to go county to county across the U.S., file tedious paperwork, and search slowly residence by residence to find the right fit?
Not us.
Luckily, our hyperlocal lead generation platform, PropertyRadar, puts the power of public records straight into your pocket, offering cutting-edge desktop and mobile applications where you can easily view hundreds of millions of properties nationwide and effortlessly connect with eager-to-sell homeowners through one of the billion phones and emails we have access to.
Not only does PropertyRadar offer advanced knowledge on specific properties – including everything from transaction history to equity owed to neighborhood statistics – but they also offer the opportunity to better understand communities and search radiuses of your choosing.
Want to learn about the thriving suburbs closest to downtown ATX? Done.
Need to better understand the demographics of homeowners along North Myrtle Beach? Easy.
As you try to gauge what neighborhoods may be the right fit for enthusiastic remote workers fleeing their front porches in favor of wanderlust-driven exploration – remember that the more data and information you have at your fingertips, the smarter your investments will be.
We get it. The housing market changes quickly! And you want to be the first with that information.
So, what are you waiting for?
Get started now with a free PropertyRadar trial, and uncover over 150 million properties that could be the key to your next short-term rental investment.
