In the dynamic world of real estate, staying ahead means not just keeping up with the trends, but pioneering new ones. Here are 8 compelling reasons why embracing short-term rentals (STRs) could be a game-changer for your agency.
In an article published by Skift Research in Nov 2022, it was clear that demand for short-term rental is reflected worldwide, with the global gross bookings for STRs expected to reach $145B in 2023, a 41% year-on-year revenue increase from 2022. While traditional property management models primarily focus on residential long-term rentals, the increasing demand for short-term accommodations means agencies should adapt their strategies to remain relevant and diversify their revenue streams. By embracing STR, property managers can tap into a broader market, attract a diverse range of clients, and ultimately boost their bottom line.
By adding a short-term property management portfolio, you'll increase the number of properties under management and your rent roll. Adding 50 short-term rentals to your portfolio can increase your rent roll income by $116,025. Additionally, by catering to a broader audience of tenants (STR and LTR) you will have more eyes on your brand, listings, and a greater opportunity to convert those views into sales or customers in the future.
One of the most compelling reasons for property managers to venture into short-term rentals is the potential for higher rental income. Short-term rentals often command premium rates, especially in prime locations or during peak seasons. This allows property managers to optimise rental income and achieve higher returns for property owners, and therefore command higher revenue via percentage based management fees.
In the saturated real estate market, differentiation is key. It's important not only to meet industry standards, but to exceed them. Diversification isn't just about stability; it's a way to attract a wider range of clients and enhance your reputation as a versatile industry player with a point of difference to your competitors.
Property owners have been recognising the potential benefits of switching from long-term rentals to short-term rentals. With short-term rentals not only can owners maximise their rental returns, but also have flexible use of their property as required. By offering short-term rental property management alongside your long-term offering, you can retain clients including property investors and developers looking to capitalise on the demand for short-term and increased rental returns and be able to utilise their property as required.
The rise of online platforms, such as Airbnb and Vrbo, has revolutionised the way travellers seek accommodations. Gone are the days of conventional hotel stays; travellers are now actively seeking unique, personalised, and immersive experiences during their trips. According to a recent article in the Australian Financial Review - AFR, Sydney and Melbourne hotel occupancy rates were below 65% in 2022, whereas MadeComfy saw a 73% average occupancy in the same markets. This shift in traveller behaviour has given rise to the booming short-term rental market. By tapping into the short-term rental market, you align your agency with modern consumer behaviour and trends, ensuring relevance and growth.
Managing short-term rentals means increased online presence across multiple platforms. This amplifies your brand visibility, reaching audiences you might not have accessed with traditional property listings alone.
By managing the sale, long term and and short-term rental aspects of a property, you foster deeper, long-lasting relationships with clients. Offering end-to-end services not only simplifies their experience but also reinforces trust, ensuring they return to your agency for future real estate needs.