3 Ways to Monetize an Empty Short-Term Rental Right Now

3 Ways to Monetize an Empty Short-Term Rental Right Now

3 min read
Avery Carl

Avery Carl is a top 1 percent real estate agent and CEO/founder of The Short Term Shop, a national real estate firm that represents and mentors investors in the buying and selling of investment properties in the top short-term and vacation rental markets in the U.S.

Experience
Avery bought her first investment at the age of 26 on a $37,000 salary, and through strategically investing in mature vacation rental markets, scaled her portfolio to 30 doors (a mix of both vacation rentals and traditional long-term rentals) and achieved financial freedom by age 30. The Short Term Shop helps investors acquire short-term rental properties in the most recession-resistant markets and mentors them using the methods that led her out of the corporate rat race and into financial freedom.

On the sales side, Avery has connected investors with over $100 million in cash-flowing vacation rental investments since 2017 and was named the Tennessee Association of Realtors “Rookie of the Year” in 2017.

Press
Avery has been sharing her knowledge on how to use vacation rentals as a vehicle to accelerate cash flow and scale investment portfolios quickly on the BiggerPockets real estate network for four years, most recently serving as a speaker at the BiggerPockets Conference in 2019. She’s also appeared on two BiggerPockets Real Estate Podcast episodes, #364 and #375, as well as contributed to the BiggerPockets YouTube channel and blog.

In addition, she has written articles for USA Today, Realtor.com, Yahoo Finance, U.S. News & World Report, and the Turnkey Vacation Rental Blog. She has been a guest on the Joe Fairless Best Real Estate Investing Advice Ever podcast on two occasions, as well as on Real Estate Money School, Investing in the U.S., School for Startups, Wealth Without Wall Street, and Flipping America.

Education
Avery earned a Bachelor of Science from the University of Texas, as well as a Masters of Business Administration (Marketing) from Belmont University.

Accreditations
Licensed real estate agent in Tennessee, Florida, and Alabama.

Follow
Instagram @theshorttermshop
Twitter @shorttermshop
The Short Term Shop on Facebook
TheShortTermShop.com

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COVID-19 has hit everyone hard. One area of real estate investing facing particular difficulties right now is the short-term rental (or Airbnb) branch of investing.

In some markets—true vacation rental markets—short-term rentals have been around for decades, predating Airbnb, VRBO, and in some cases even the internet itself. In most major metropolitan markets, short-term rental and Airbnb investing is a new-school strategy as of the past 10 years.

Diving even deeper, within this branch of investing are many subsects and strategies. Some investors acquire short-term rentals as a way to turbocharge their cash flow in order to scale their portfolios more quickly. Others create entire jobs and businesses without actually purchasing properties in a method called “arbitrage.” This method is executed by renting another investor’s unit through a long-term lease, and then, in essence, sub-leasing the unit by hosting it through the major short-term rental booking platforms.

Whatever the method or market of the investor, all short-term rentals have one thing in common: dependence upon the travel industry.

With COVID-19 bringing the travel industry to an immediate and grinding halt, short-term rental investors have been left to employ their cash reserves (a subject for another blog post) and to get creative in terms of getting “heads in beds”—a phrase commonly used in the industry that refers to bookings and occupancy.

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Switching Strategies

Depending upon the type of market (metro market or true vacation rental market), investors and hosts have had to rethink their marketing in the era of coronavirus. Below are three tips for hosts to earn income off of slow or empty short-term rental units during the pandemic (assuming the host’s specific market does not have flat out short-term rental bans in place).

Target Traveling Medical Professionals

Renting to traveling medical professionals is an especially viable option for large metropolitan markets. Traveling nurses, doctors, and other medical professionals often need medium-term housing on a one- to six-month basis and have a housing allowance or stipend from their employers to pay for such.

Doctors and nurses are being flown into the COVID hotspot markets to help bolster the local medical talent and infrastructure as coronavirus cases have overwhelmed the medical communities in certain metro areas. There are a number of websites available to owners where they can advertise their units to traveling nurses and doctors.

A few of the major platforms for renting specifically to medical professionals are Furnished Finder and Travel Nurse Housing.

Related: 3 Ways Short-Term Rental Owners Can Help Frontline COVID-19 Responder


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Convert to Medium-Term

I know several investors whose entire business model is centered around medium-term corporate housing. Similar to the traveling medical field, many executives need medium-term housing for one to three months to work on company projects at offices in different cities. This strategy is best suited for metro markets. There are many websites for owners to advertise their furnished units for potential executive medium-term renters.

By the same token, vacation rental owners can market their units to remote workers who can work from anywhere with an internet connection. Advertising a strong internet connection, a designated workspace in the unit, and other work-from-home amenities will be attractive to potential remote work guests.

If your market has a temporary ban on short-term rentals, make sure to check the number of days that constitute a short-term stay (30 days in most cases) to ensure that your guests are meeting the minimum standards

Convert to Long-Term

This isn’t a tip that any short-term rental investor wants to hear, and in many markets (including my own), it’s not feasible. However, signing a medium-term lease or a month-to-month long-term lease is a good way to garner some steady income for a period of time in order to evaluate the medium- and long-term effects of COVID on your local market.

Playing the Long Game

In the long run, most short-term rental investors are accustomed to fluctuating tourism seasons and, in turn, fluctuating monthly income. If there is one thing that COVID has shown us, it’s the importance of having three to six months of cash reserves with which to weather unforeseen short-term rental storms.

I am also a big believer in a well-diversified portfolio. I keep my personal portfolio at around 25% vacation rental and 75% long-term rental. This way, I am juicing my investment capital with the significantly higher short-term rental income, while not being completely dependent on my vacation rentals.

Related: Coronavirus & Short-Term Rentals: How I Made Up for Lost Profits (& How My Numbers Were Impacted)

While short-term rentals have been the most heavily affected area of real estate investing, in many markets, they are a proven and lucrative investment model, often producing between two and five times the cash flow of long-term rentals. COVID-19 is a black swan, once-in-a-lifetime event.

While an uncomfortable realization at best, coronavirus has pushed us as short-term rental investors to decide whether we want to base our investment choices off of the 99.9%-of-the-time scenario or the 0.01% of the time scenario. To be honest, neither is a wrong decision—it’s up to the individual investor to decide the level of risk and potential reward that they are comfortable with.

What are you doing with your short-term rental properties?

Let us know in the comments below.