Top 5 Reasons Why I Won’t Invest in Short Term Rentals

For a few years, short-term rentals have been the hottest asset class in real estate. Owning a property in a hot destination, potentially earning more than traditional rentals, what’s not to like? Here’s the problem though: if we look past the allure of owning a vacation property, there’s a lot of risk and even diminishing returns.

 

For a multitude of reasons, this is probably the worst time to own a short-term rental. You’re going up against economic pressures and increasing regulations and this will most certainly cut into your returns.

 

Is there any way to own and operate short-term rentals successfully? In this episode, I share why I’m personally not a fan of short-term rentals as an investment strategy.

 

When you’re swimming with the tide and buying at the right time, you can be an average operator and still do well. When you buy at the wrong time, you have to be an exceptional operator to be profitable. -Tom Cafarella

 

Three Things You’ll Learn In This Episode

 

- Why people are obsessed with short-term rentals

Are people flocking to short-term rentals because they are a sound investment or just because they are cool to own? 

 

- The crowd is typically wrong 

By the time an investing strategy goes super mainstream, it’s usually too late to do it successfully. Why are short-term rentals a perfect example of this?

 

- What scares me most about short-term rentals

Short-term rentals are rife with regulation. Why is this such a huge threat to profitability?