The Covid-19 pandemic and the emergence of short-term rental companies like Airbnb gave birth to a new type of real estate, short-term residence rental.
This new wave blurs the lines between the hotel and residential segments, sparking developments designed from the ground up to serve dual purposes. On the one hand, they cater to the needs of buyers looking for a getaway. On the other hand, this trend helps investors or homeowners to earn passive income when they are not using the property.
CEO and founder of short-term rental company WhyHotel, based in Miami, USA, Mr. Jason Fudin believes that the trend of working remotely can change the way a young generation approaches the real estate market globally.
“Since the outbreak of the pandemic, we have seen an increase in demand for short-term accommodation. Our apartment-style hotels have outperformed traditional guests during the peak of the epidemic, even at times when occupancy reached more than 85%," said Mr. Fudin. “Consumers demand short-term accommodation that combines apartments and hotels, especially when they can work anywhere they like. For example, people travel for work and stay for pleasure, especially in Miami, New York, and Nashville. Therefore, they are looking for apartment-style amenities plus hotel-like services to enjoy that lifestyle,” he added.
Passive income
Nicholas Perez, vice president of a well-known real estate corporation in the US, said that flexible living allows people to generate income even while having fun or eating. That's what short-term rentals can do.
“We have seen many locals, especially a new generation of young people who love to move, as well as foreign buyers, are seizing the opportunity to own real estate in one of the fastest growing areas of the United States: Downtown Miami.
Some will choose to live here, while others see it as an opportunity to enter the booming short-term rental business without the challenges of independently managing these properties. ", Mr. Perez emphasized.
Clear demand
Harvey Hernandez, CEO of Newgard Development Group, a real estate developer operating in the North American market, said teleworking also motivates people to move more. That creates a sense of freedom to experience different lifestyles in many places, which is unprecedented.
“This freedom provides people with a great opportunity to utilize their homes to their advantage when they are traveling or exploring other places for short periods of time rather than leaving them alone.
The advent of short-term property management and rental agencies has made it possible for many people to both travel and earn money, thereby motivating many, especially young people participate in the short-term rental market”, Mr. Hernandez shared.
When asked if some short-term tenants wanted to stay longer, Hernandez said yes. He has seen a spike in length of stay on short-term rentals, as demonstrated by what he calls "huge demand" for stays of 30 days or more.
In the near future, more clearly designed additional changes and developments will help lift the short-term rental market to a new level, bringing a giant pie, attracting both investors and tenants.
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