Long term outlook of short term rentals?

Question

I know here recently, due to social distancing and stay at home orders, that STRs have taken a major hit. I do not own any but before the crisis I had an interest in them and have still been looking up info about the ideas and philosophies behind them.

Do you guys think this is a temporary hit that should pick back up when the market picks up or do you think that this downward trend as it relates to STRs last much longer?

Do you believe that short terms are still a good long term investment?

Ken Boone · Answer

@Drew Lamb It depends.  Not sure about non vacation markets, but as far as vacation markets I think this was just a bump in the road.  I took an initial hit on my vacation cabins and had to lower prices in order to fill back up.  But right now, my cabins are smoking hot and booked almost solid for the next 5 weeks or so at full price.  Bookings are back to normal as of about 2 weeks ago.

John Underwood · Answer

I am banging on all cylinders after a short hiccup.

I am getting $350/night for June bookings.

Account Closed · Answer

I live in a neighborhood with tons of STR’s. They are typically booked from folks visiting Disneyland. I’m literally walking distance & I see groups walking towards the happiest place on earth.

Disneyland has been shut down since March and I’m interested to know if any socal investors have any info regarding their STR’s?

I was actually thinking about marketing to these folks directly.

John Underwood · Answer

Lake Hartwell SC

Diana T. · Answer

@John Underwood

Curious... whereabouts? Always looking for my next :)

Ken Boone · Answer

Yes it does, but I went in to this foray with plenty of reserves as well and with expectations that I might have to carry a few months to get started.

Drew Lamb · Answer

@Julie McCoy thank you so much for that answer, That really helps! And I guess if regulations would come down hard and the industry and AirBNB or similar companies had to close you could probably list them on a local or private site and be in much better shape than those residing in major population regions.

Julie McCoy · Answer

Oh absolutely.  Many established vacation destinations have had vacation rentals long before AirBNB/VRBO, they're an integral part of the local economy and thus the risk of them having onerous regulations is very small.  Meanwhile, urban markets are struggling with how to adapt to this new wave of STRs in their districts, there's a lot of NIMBY-ing and hotel lobbying and city councils are coming up with new restrictions all the time (Nashville's STR landscape has changed dramatically in the last year or two alone, for example).

I'll stick with my cabins that are next to thousands of other rental cabins that get filled by millions of tourists who have been coming to the area for decades.

Drew Lamb · Answer

@Jon Crosby I love that point about the big hotel chains having shared surfaces... I never even thought about that!

Drew Lamb · Answer

@Julie McCoy would you say being in a vacation destination and not one located in more urban environments has offered more protection over the course of ownership?

Long term outlook of short term rentals?

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