Real Estate Investments Alternative This property type is capturing the steepest margins on the market

Maximizing units and investments.

Most investors know a once-in-a-career market is taking place. Alternative investments in the real estate space are surfacing some of the largest returns with short-term rentals taking a clear lead, but the question we get remains the same – how should I make the most of the still-booming short-term rental market? And where should I invest?

When people hear “short-term rental”, it still conjures up the idea of a vacation home on the beach that owners rent out to guarantee a few weeks of personal use throughout the year. While that works for some, we challenge you to expand your horizons. COVID-19 has introduced a new reality, a reality in which the line between work, play, and travel are blurred. Now, more than ever, young professionals and families alike are fleeing their long-term homes to experience life on the road. Life in short-term rentals. It is clear that investing in short-term rentals is a savvy investment, but now the question is: which investment is best?

The multifamily sector and property type is performing particularly well; multifamily buildings with 40 doors or less are capturing some of the steepest margins on the market, and 65% of operative Airbnbs are located in multi-family buildings. The inherent flexibility that owning multiple units in a multi-family building offers is hard to ignore. Investors, based on their goals and motivations, can choose between different strategies for each unit. Investors hoping to maximize profits can choose to list and operate all units as short-term rentals, partnered with a trusted property manager like Rabbu to ensure all runs smoothly. Conversely, a hybrid model may be attractive to traditional landlords who still value long-term relationships with tenants while not wanting to forfeit the market rewards that come with short-term rental strategies.  

The real estate sector post-COVID has made short-term rentals a lucrative asset class, and an investment into any short-term rental property is one that should not be ignored. For investors wanting to maximize profits across multiple doors in a property, or enjoy a hybrid tenant model, large multi-family buildings are a good fit with impressive market performance to back it up.

If you’re interested in reading more about this topic, we talk about it in-depth here with our friends at NuWire Investor. Happy reading!

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