🔥 STR Weekly Report: "Airbnbust" is Happening!

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MORTGAGE RATE WATCH

STR DEAL FLOW

🔥 Top 10 Trending STR Homes for Sale

$1.029m | Morgantown, GA: Turnkey luxury home with high end finishes in GA mountains grossed $127k trailing 12 months.

$265k | Panama City Beach, FL: Waterfront community 1 bedroom condo well maintained with full amenity package and dock.

$350k | Tulsa, OK: FSBO cashflow king brings in $71k in past 15 months.

$525k | Port Charlotte, FL: Turnkey and ready to go with $72k trailing income over the past 12 months.

$415k | Winston-Salem, NC: The Ardmore Chalet is a turnkey STR and hidden mountain getaway in the best location.

$749k | Branson, MO: PENDING. It went fast! Turnkey rental lodge with 6 beds and 6 baths, high performer in sought after Indian Point.

$595k | Landrum SC: Beautiful turnkey STR with lakeview built in 2021. Perfectly located between Greenville, and Ashville.

$479k | Cherry Log, GA: One of a kind gem with high end finishes, posh, modern, GA mountain getaway.

$Mid 300k | Mentone, AL: Offers start in mid-300’s for this 3 acre “Whiskey Lake” retreat with big potential.

$599k | Atlantic City, NJ: Turnkey STR brought in $106k trailing 12 month revenue. Make cash offer.

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AIRBNBUST BUZZ IN NYC

A Real Airbnbust in NYC with 75% of Airbnb Listings Removed in ONE day! Wow.

 🤌 What’s going on for STR investors:

New York City has implemented Local Law 18, which makes it illegal in most cases to rent out private apartments or homes on Airbnb for less than 30 days. This has essentially ended the Airbnb free-for-all that existed for years in the city. Previously, investors could easily justify overbidding on properties because they knew they could make more money through short-term rentals than traditional long-term tenants. However, the new regulations have made it challenging for investors to continue using Airbnb as a profitable income stream, leading many to reconsider their investment strategies.

🔑 Why it matters for STR investors:

This change in regulations matters for STR investors because it significantly limits their ability to generate income through Airbnb in New York City. Investors who relied on Airbnb to make higher returns on their properties are now facing uncertainty and are exploring alternatives, such as focusing on towns outside the city with more lenient Airbnb rules. Additionally, it may encourage some investors to shift their properties to long-term rentals. While the impact on rents city-wide may not be substantial, certain neighborhoods like Bed-Stuy, which had a high concentration of short-term Airbnbs, could experience stabilization or even reductions in rent prices. The new regulations are reshaping the investment landscape for STR investors in New York City.

🔮 The future for STR investors:

The future for STR investors in New York City appears challenging under the new regulations. Many investors are likely to seek alternative markets with friendlier Airbnb rules, while others may choose to convert their properties into long-term rentals. This shift could potentially lead to a more stable housing market in some neighborhoods, but the impact on overall rent prices may be limited given the relatively small percentage of housing units involved in short-term rentals. Moreover, these regulations are likely to drive tourists toward hotels and other subletting systems, creating new dynamics in the city's hospitality sector. The future for STR investors in New York City is uncertain, thousands are needing to adapt their investment strategies, or sell, to comply with the new rules and changing market dynamics.

STR MARKET INSIGHTS FROM ROBERT KIYOSAKI

Airbnb To Lead Real Estate Market Crash - Robert Kiyosaki

 🤌 What’s happening here for STR investors: Robert Kiyosaki, the author of "Rich Dad Poor Dad," has issued a warning that Airbnb will be a catalyst for an impending real estate market crash. He suggests that a combination of factors, including a looming recession and regulatory actions against Airbnb, is contributing to this prediction. Economists also express concern about the "Airbnbust," marked by declining prices and bookings, especially in major cities like New York (70% reduction in listings), Chicago, and San Francisco.

🔑 Why it matters for STR Buyers and Sellers: This warning is significant for both short-term rental (STR) buyers and sellers because it suggests that the market dynamics are shifting. There is growing data that supports many Airbnb markets are showing cracks. Sellers may face reduced demand and lower prices for their properties, while buyers might see opportunities to invest at potentially lower prices during a market downturn. The regulatory actions against Airbnb further complicate the landscape for STR investors, potentially affecting their rental income and property values.

🔮 The future for STR investors: In light of these warnings, both STR buyers and sellers should carefully assess their strategies. Sellers may consider adjusting their pricing and marketing tactics to attract tenants, while buyers might explore the potential for bargain purchases during the market decline. Additionally, working with a local STR Expert Agent to stay informed about local regulations and market trends is crucial for making informed decisions in the evolving real estate market. Being prepared for a potential downturn and diversifying investments could also be prudent strategies for both buyers and sellers in the short-term rental market.

STR MACRO DATA ANALYSIS

What The “Macro” STR Data for Summer is Telling Us

🌞 Summer STR data is in and here is what you need to know:

• Short-term rental (STR) performance varied significantly between the U.S. and Europe during the summer of 2023.

• Across the board, occupancy rates and revenue declined, with the U.S. experiencing a sharper decline.

• In the U.S., Revenue Per Available Rental (RevPAR) fell by 14.1%, Average Daily Rates (ADR) dropped by 8.1%, and paid occupancy decreased by 6.5%.

• Globally, RevPAR dropped by 9.8%, primarily driven by a 4.9% decline in ADR and a 5.1% drop in occupancy.

💡 Possible reasons behind the STR trends:

• The U.S. witnessed a quicker return to pre-COVID norms compared to the UK and Europe, contributing to the performance gap.

• Newer STR investors who got in late and anticipated stronger rates and occupancy may face challenges as performance falls short of expectations.

 🔮 Crystal ball for remainder of 2023 (September to December):

• Pacing data, while less reliable for future periods, offers early indications of demand changes. Prepare accordingly.

• In the U.S., RevPAR is expected to drop by $20 YoY, with occupancy down 6 percentage points, but ADRs show a slight increase of 0.9%.

• Booking windows in the U.S. have shrunk, leaving potential for property managers to recover, by driving short-window booking strategies.

• Globally, occupancy is down 31%, but ADRs have increased by 9.9%, resulting in a 24.1% decrease in RevPAR. This is a global slow down.

🔑 Key Considerations for short-term rental investors:

• Understand that the initial STR boom has subsided, we are experiencing the hangover effect, how long the hangover lasts is still TBD.

• Monitor forward-looking data closely in your local market to adapt your STR business strategy in response to changing market conditions, lower revenue, and decreasing occupancy.

• Recognize the importance of flexibility, agility, and creativity in responding to evolving STR market dynamics to win the game.

As we move into the latter part of 2023, STR investors should stay vigilant, adjust their strategies as needed, and continue to track data and market trends to remain competitive in the industry. And, always, buy right no matter what the market.

TRENDING STR HEADLINES