Investor Confidence is Up—What’s Making Everyone Feel Good About the Market?
Summary
Real estate investors are pivoting from flipping to rentals due to rising costs and increased regulations. Hosts should be aware of rising insurance costs and STR restrictions, and consider leveraging AI tools and green tech to improve profitability and streamline operations.
Key Insights
- •Rising costs have been identified as the main concern for investors, according to the study.
- •Short-term rental restrictions are compounding the complexity of rising costs, stripping landlords of an alternative outlet to conventional long-term rentals.
- •Almost 50% of property management professionals either currently use AI tools or plan to by the end of 2025, with rent collection being a particular area of interest.
Action Items
- ✓Consider green tech adjustments such as solar-powered irrigation and lighting systems, energy-efficient HVAC systems, smart locks, and mobile payment systems to reduce expenses.Effort: mediumImpact: medium
- ✓Prioritize tenant retention and operational efficiency, and continually examine expenses, looking for ways to improve them.Effort: mediumImpact: medium
- ✓Run your numbers conservatively with worst-case scenarios in mind and buffer in higher insurance costs.Effort: lowImpact: medium
Tools & Resources
- →Baselane: A survey by management platform Baselane.
- →Showdigs.com: Showdigs.com reports.
Common Mistakes
- ⚠STR restrictions by cities have stripped landlords of an alternative outlet to conventional long-term rentals.
- ⚠Landlords relying on STR income to survive face financial distress due to increasing regulations.
More from Regulations & Compliance
Carson City, Nevada, is refining its short-term rental regulations. City supervisors are currently reviewing and modifying the local ordinance during a retreat. This review aims to address operational aspects, potentially impacting local hosts through new or revised rules, emphasizing compliance.
A 21-unit vacation rental in Dunedin, Florida, has been approved, signaling potential growth in the local short-term rental market. This approval could lead to increased accommodation options for tourists visiting the area. This news could also influence local regulations.
St. Louis aldermen have approved a short-term rental fee, though a legal battle over existing rules continues. This indicates a focus on regulating the STR market within the city. Hosts in St. Louis should be aware of these new fees, which may impact their profitability. Find out how this affects your STR business.
Curated by Learn STR by GoStudioM