has changed. Thanks to low interest rates and nearly nonexistent inflation that kept Americans feeling flush with cash even when they maybe should not have felt so, investors have become accustomed to buyers and even renters who have extremely specific, and often high, standards for what makes a place to live acceptable. As inflation begins to truly take hold of the economy and the American pocketbook, some of those things are going to change. Indeed, some are already changing. Fewer people are dining out, for example. And beaches that were jam-packed during spring break—and were expected to be for many summers (and spring and falls) to come—are seeing far fewer vacationers because people simply do not have the extra money to spend, thanks to rising gas and food prices. A decline in discretionary spending does not necessarily mean locations that were attractive during the pandemic will cease to be good investment locales. In fact, it could herald a shift toward long-term rentals in these areas as more people elect to move to a place where they truly enjoy living and work remotely. However, for investors doing fix-and-flip deals or performing massive upgrades on short-term vacation rentals, this trend could mean the time to shift gears is fast approaching—or has already arrived. TREND 3: THE CORPORATE RENTAL SECTOR IS RISING Corporate rentals have been around forever, but many real estate investors are unaware of just how flexible and profitable this type of asset class can be. Corporate rentals essentially function like a vacation rental
because the investor completely furnishes the property and includes all the amenities one would typically find in a vacation rental. This means the usual tables, beds, chairs, and desks and also toasters, laundry facilities, a small fridge, and blow dryers. Most properties boast nice electronics, including good televisions and fast Wi-Fi. The owner sets up and pays for water, gas, and electric. This is, essentially, a vacation rental, but with one major distinction: It serves a working professional likely traveling without family. Since 2020, there has been an extreme surge in the traveling workforce. The American workforce is more transient now than it has ever been, ranging from traveling steel plant workers and construction workers to health care workers and lab techs. Insurance companies send out professionals for months at a time to assist with claims; they pay for corporate housing when customers must wait for repairs or new homes to be completed. In southern states, “snowbirds”— individuals who live in northern states in the summer and then go south for the coldest months of winter—are showing a marked preference for corporate rentals over Airbnb and VRBO in recent months; they will rent corporate units for two and even three months at a time. With corporate rentals, typical rent ranges from $1,200 to $1,800 more than the same house would rent for otherwise. This is because corporate renters expect quality amenities and customer service, but the rewards of serving clients like this are great
as well. These residents tend to appreciate the services offered as part of the corporate rental and, furthermore, they are extremely loyal because there are not a lot of investors offering corporate rental services in the marketplace today.
HOW TO WATCH THE MARKETS WITHOUT WAITING ON THE DATA Still, if you think you can
successfully invest in real estate without relying on any hard data to make decisions, think again. Yes, you do need this type of information for your real estate investing business; however, it should lead you to believe you cannot afford to wait on the data. You must constantly investigate and evaluate the world around you and the market that is happening in real time. If you wait on the data to come out 90 or even 180 days after events are already in motion, you will spend your investment career scrambling to beat your competition and meet your goals. •
Tom Olson is the founder and president of the Olson Group Network , which includes Conduit Capital, Good Success, Olson Group, Olson Property Services,
Olson Construction Management Services, and Sarah Jo, LLC. He is the author of multiple popular books for entrepreneurs and investors, including “The 30-Day Good Success Journey,” “Active Turnkey: The Best Way to Buy Rentals,” and “Investors vs. Contractors.” Olson hosts The Good Success Podcast, a pop- ular podcast for investors and entrepreneurs dedi- cated to achieving true lasting financial success as well as true personal and professional fulfillment.
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