Flipping and wholesaling properties to short term rental operators like Airbnb landlords can be a highly lucrative strategy for investors. Here’s the 411 on what type of inventory you should be sourcing for them…
The Short Term Rental Market Is Growing
Recent events have only accelerated the need and demand for short term rentals. This includes those on platforms like Airbnb, Homeaway, and VRBO, but not exclusively. In fact, Airbnb alone has said that it is facing a shortage of 1M or more units.
Regular landlords are switching to short term rental arrangements to get away from eviction bans and being tied to bad tenants.
Ongoing travel limitations have created a boom of domestic travel. As remote working is also making it more common that people will look for new places to stay for a few weeks or a month at a time.
Of course, these types of rentals also rent for far more than the average annual rental as well.
Serving Up The Product
There is a huge need for properties that can be used in this way. You can fill this gap as a wholesaler and fuel your business with deal flow and higher profit margins if you have the right product.
That means understanding what’s most important to their end users. So, what features should you look for and can find to create a better product for them?
Realtor Magazine recently published a lot of data on the top features these renters want, as well as the top issues that turn them off.
Price
Price was the most important factor for guests. With most looking for units in the $50 to $99 per night range. Remember that some of these platforms can add 30% or more on top of the nightly rate in fees, so be sure to factor that in. So, on a $100 a night rate, the owner may only get $70, before all of their costs.
Location
Real estate is all about location. In this case, tourism based cities were actually the least desirable.
Style
Users’ favorite style of place to stay is actually traditional, not modern or contemporary.
Internet Connection
With more people working on the go, reliable and fast internet is a top need.
Parking
Poor parking is one of the top pet peeves of guests. They don’t want to have to pay extra for it. They don’t want to have to struggle to find it. They may need two or three parking spaces.
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