The vacation rental space has become more crowded in recent years, with many new players entering the market. However, whether the market is oversaturated depends on a number of factors, such as the specific location, the type of property, and the overall demand in the area.
In some popular tourist destinations, there may be a high supply of vacation rental properties, making it more challenging for individual hosts to stand out and attract bookings. On the other hand, there may be less competition in less popular areas or for unique properties that offer a special experience for guests.
Furthermore, the COVID-19 pandemic has led to changes in travel patterns and preferences, which may have impacted the demand for vacation rentals. For example, some travelers may prefer to stay in private accommodations to avoid crowds, leading to increased demand for vacation rentals.Get a Quote
Overall, while the vacation rental space has become more competitive, there may still be opportunities for hosts who are able to offer unique and attractive properties in popular or less crowded areas, and who are able to adapt to changing travel trends and preferences.
Choosing the Best Vacation Rental for Income
So now you're probably asking yourself, how do I pick a winner? Try the below suggestions when trying to find a great short-term rental.
- Location: The location of the property is one of the most important factors to consider. Choose a property in a popular tourist destination or in an up-and-coming neighborhood that has potential for growth.
- Unique features: Consider properties that offer unique and attractive features, such as a stunning view, proximity to local attractions, or a unique architectural style.
- Amenities: Look for properties that offer a range of amenities that are in high demand among travelers, such as Wi-Fi, air conditioning, a fully equipped kitchen, a washer/dryer, and parking.
- Reviews: Check out the reviews of various properties written by short-term renters to see what guests have said about their experience. Look for properties with consistently positive reviews and high ratings.
- Price: The price of the property is an important factor, as it will impact the property's profitability. Look for properties that are competitively priced compared to other properties in the area.
- Competition: Research the competition in the area to see how many other Airbnb properties are available and how they compare to your potential property in terms of amenities, price, and location.
- Legal and regulatory considerations: Make sure that the property is legally allowed to be used as an Airbnb rental in the area and that you are aware of any regulations or requirements that may apply.
- Investigate the financials: Use a resource that has financial matrixes, like AirDNA or Mashable.
What to Do If Your Short-Term Rental Isn't Performing Well
Let’s say that you have a short-term rental that's not providing you the rate of return you need. What can you do now? Here are some suggestions.
Switch to long-term rentals.
Consider renting out your property to tenants on a long-term basis. While long-term rentals may generate less income than Airbnb rentals, they offer the stability of a consistent rental income and fewer management responsibilities.
Consider corporate rentals.
If your property is in a business district or near a corporate center, you may be able to attract business travelers, consultants, and others who need temporary housing for a few weeks or months.
Update and improve.
Add amenities and experiences to your short-term rental. Consider a hot tub, or perhaps a selfie wall to draw more attention to your listing.
Convert to co-living.
Co-living rentals are becoming increasingly popular, especially among younger renters. Consider converting your property into a co-living space that offers common areas and private bedrooms. Co-living differs from a typical roommate situation in that each tenant has separate financial responsibility and their own contract, whereas roommates all share the financial responsibilities.
Rent out a portion of your property.
If your property is large enough, consider renting out a portion of it, such as a basement apartment or a guesthouse, to generate additional income. A long-term tenant on part of the property could bring you steady income while the rest of the property stays on the vacation rental market.
Sell the property.
If you are unable to generate the income you need from your short-term rental property, consider selling it. With the proceeds, you could invest in a property that is better suited for your needs and financial goals.
By exploring these alternatives, you can find the best option to generate income from your property, even if the Airbnb market is not proving to be profitable.
The vacation rental gold rush seems most assuredly over, what with an Airbnb tycoon reporting that half his 95 Phoenix rentals stood empty on Super Bowl weekend. If the market isn't saturated yet in destinations favored by the Instagram set, it likely will be soon. Your better opportunities for short-term rental income might lie in up-and-coming vacation destinations, business centers that attract younger workers, or anywhere you can enhance an already decently performing vacation rental property with amenities and experiences worth writing home about.Get a Quote