STRATEGY
VACATION RENTALS
The Future of Airbnb Investing HOW REGULATIONS ARE RESTRICTING THIS PROFITABLE INVESTMENT STRATEGY.
By Daniela Andreevska
T
he establishment of Airbnb in 2008 and the subsequent emergence of similar websites
including both large cities and small towns and villages. This is what has been driving the spiking demand for Airbnb rentals among investors. However, as one can imagine, this real estate revolution did not happen unproblematically. The residents of hot tourist destinations as well as local authorities grew concerned about deteriorations in safety, tranquility, and quality of life due to the constant moving in and out of strangers. Moreover, many popular destinations such as Miami and Los Angeles witnessed wild parties on site of vacation rental homes, which raised further apprehension about the effect of Airbnb rentals on local communities. Another major impact of the rapid growth of the short- term rental industry has been making already-expensive housing markets even more unaffordable for both
revolutionized the real estate industry. Renting out on a short-term basis escaped the limits of home-sharing and evolved into an independent, full-time real estate investment strategy. Major cities in the U.S. as well as globally experienced an influx of local and out-of- state real estate investors purchasing properties and sometimes entire apartment buildings for the sole purpose of renting them out on Airbnb or other vacation rental platforms. Nationwide real estate market analysis conducted by Mashvisor, a real estate data analytics platform, highlights the fact that short-term rentals yield a considerably higher monthly rental income and return on investment in the majority of the U.S. housing market,
68 | think realty magazine :: march 2020
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