Short-Term Rentals as Pandemic Isolation Locations: What Investors Should Know

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The impact of COVID-19 has reverberated through the economy and subsequently the real estate industry all around the world, and with it, the need for change. As with Darwin’s theory of evolution, we can use Professor Leon C. Megginson’s summary of his works, which says, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” 

Real estate investors and entrepreneurs need to master the ability to adapt. Instead of viewing problems like a consumer, look at them from the perspective of a producer. This means observing the problems and massive changes throughout the industry to discover unique solutions. This will keep people in business and make the world a better place to live in.

History has shown us that out of chaos and adversity come some of the greatest innovations to our society. Massive disruptions create massive problems and these need solutions—which can come in the form of products and services. For example, highways throughout the United States were created after World War II to increase the efficiency of military supply lines. The same concept goes for rocket technology, aerosol cans, and the internet, all of which were created during times of adversity and revolutionized the modern world. 

Short-term rentals in the time of COVID-19

Those operating short-term rentals (STRs) may have had great success this year or the worst year ever. Many state and local governments have enacted strict guidelines in order to protect their citizens, which means STR investors must change their strategies. No longer is leisure travel the industry’s sole driver—many Americans are utilizing short-term rentals as quarantine locations. As a result, investors’ strategies must adapt. 

Being a real estate investor is very similar to being an entrepreneur for many reasons. You are in control of the ship. You must make the key decisions as to how to operate the portfolio and what changes to make. If you refuse to make changes when they are necessary, like Blackberry or Kodak, then you will quickly disappear.

Change is often uncomfortable, but in many cases it’s necessary. As investors and entrepreneurs, we must welcome change and look for opportunities to capitalize on it from our position on the leading edge of the decision-making process. 

Consider aligning with the healthcare industry in some capacity, which allows for the potential to access special exemptions. An example of this may be providing temporary housing for traveling healthcare professionals. 

Because of the pandemic, many people are now extremely health-conscious and strict safety measures are necessary to support public health, particularly for the elderly and those with pre-existing conditions. This means that you should ensure your rentals are quarantine-friendly and must consider an even stricter focus on health and cleaning. 

Focus on safety

Most STRs are generally safe from a health standpoint since they are regularly cleaned and guests usually bring their own consumables. However, going the extra mile and adding a few things to your rental will reassure some guests and satisfy regulating bodies. 

For example, Airbnb mandates that all guests and hosts must wear masks when interacting, maintain social distancing, and use enhanced cleaning methods. These regulations have been enacted in conjunction with local government laws relating to safety standards. 

This is the bare minimum which hosts must follow to remain in accordance with Airbnb and similar platforms. In addition to this, you may also provide your guests with health supplies such as masks, gloves, hand sanitizer, and cleaning products. Anything you can do to make your visitor feel less anxious and more comfortable during their stay will benefit your investment. 

Rural and isolated short-term rentals

By keeping your rentals up to code, you get to keep playing the STR game while leveraging platforms such as Airbnb and VRBO to gain access to tens of millions of users. Each rental can become a pandemic escape for concerned citizens trying to distance themselves from overpopulated areas. 

Many people are beginning to venture out of the densely populated urban areas now that working remotely is a more available option. Those with rentals in the mountains and rural areas will likely begin to see more revenue growth as the pandemic evolves. 

Consider marketing your STR to travelers who work from home, and thus may be interested in experiencing a new, remote location for a month or two. Offering a discounted weekly or monthly rate may be one good option—and make sure to highlight your cleaning procedures in the listing. Additionally, take advantage of listing descriptions and headlines to highlight what your property offers visitors. Is it a great option for social distancing? Are there hiking trails, national parks, or other options for safe entertainment? Let potential guests know.

Innovations in remote work have already begun to explode since the start of this disruption. This is bad news for folks in certain industries like office and retail space, but it could be a good thing if you can make it work for you. Modifying your STR marketing strategy to align with the times can provide comfort to those seeking to rent your space and lead you to greater success. 

Change is inevitable and those who adapt to chaos are the ones who win in the long term. COVID-19 and the ensuing concerns that surround it are probably not going away—and real estate investors will need to adapt. 

Are you advertising your short-term rental as a pandemic isolation location?

Tell us in the comments below.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.