The idea of generating income from one’s home is great. If a family needs to leave town for short while, the benefits of renting their house out to someone on a short term basis are twofold: security and secondary income. It is on this premise that the concept of short-term rentals is based. A short-term rental refers to renting out a home or an apartment for a short-term stay. Owners of such properties typically rent out on a daily or weekly basis. Short term rentals can also include sharing one’s residence temporarily with a renter. In the past few years, short-term rental services offered by online aggregators like Airbnb have exploded across the globe. Their model is built on a seamless internet platform, which emphasize on cost-savings, everyday amenities, and the prospects for authentic local experiences.
Redefining Hospitality
The emergence of online marketplaces allow individuals to collaboratively making use of their underutilized spaces with the help of fee-based sharing. Dwellers have enthusiastically adopted listing services offered by companies like Airbnb, Lyft, TaskRabbit etc. to connect with travelers who choose short-term rentals for the completely different experience they provide as compared to hotels. While most of hotels are located in commercial neighborhoods, short-term rentals are most likely situated in residential communities allowing their guests to immerse themselves in local traditions and customs. This also enables guests to explore aspects of the location seldom exposed to the traveler or seen in any travel brochures.
Redefining Real Estate
Real estate has been a preferred choice for the investors who are looking for safe and steady returns. Short-term rental properties are the new segment in real estate rentals which has been gaining a lot of prominence in recent years owing to the better returns they generate as compared to conventional long-term rental properties. While short-term properties might require some hands-on management, more and more investors are considering short-term rentals as an investment alternative. Listed below are some of the key reasons why:
- Growing market – Travelers today have opened up to the idea of renting and residing in shared residential spaces owing to the multiple advantages offered by short-term rentals as compared to traditional hotels.
- Diversification – Short term rentals are a great way to expand an existing real estate portfolio or enter into the real estate investment sector. Through asset diversification, it insulates your investment portfolio from the volatilities of the market. Additionally, the revenue from short-term rentals also serves as secondary income to cover the mortgage on your property.
- Professionally managed portfolios – With the rising popularity of short-term rentals, leading property investment companies like SmartOwner have introduced professionally managed luxury portfolios that combine the luxury of hotels with the space, comfort and benefits of short term home rentals, increasing rental yields for investors and providing world-class benefits to travellers.
- Online marketplaces – Online marketplaces like Airbnb, HomeAway, etc. make it easier for property owners to advertise and handle bookings on their short-term rental properties.
Redefining Investment
The popularity of online short-term rental marketplaces like Airbnb and Booking.com have created a surge in demand and popularity of short-term rental properties as a better way to invest in real estate as compared to conventional real estate offerings. What started out as a spare income generating source for individuals has now grown to include offerings as diverse as low budget property offerings run by individual homeowners to exclusive, luxury portfolios like SmartOwner’s STR Series which optimises investor returns through actively managed portfolios in high-growth markets across the globe.
Whether it is in offering homeowners an opportunity to generate secondary income from their home or as the newest way to profit from investing in real estate, it is evident that short term rentals are the new revolution that is redefining the way we look at home ownership and property investments.
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