An unexpected benefit of the 2008 real estate crash
Friends and Clients —
There is one good thing that came out of the 2008 real estate crash.
I’m talking about the growth of the vacation rental market.
You see, even as recently as 2000, most homeowners had no intent on renting their second property.
However, following the housing bubble and subsequent crash, many homeowners couldn’t afford the cost of a second home.
At the same time, selling in the depressed market following the crash would have meant taking a big loss.
The upshot was that many owners of vacation properties started renting them out part-time to cover their own costs.
Is this a good thing? I believe so, and here are three big reasons why:
Vacation rentals are good for owners
42% of vacation homeowners today cover the entire cost of the home through renting.
What’s more, the average vacation rental nets an 11% yearly return.
Unsurprisingly, the ability to rent is now becoming a justification to buy, and around 20% of vacation home owners list investment as their primary reason for buying.
Good for guests
A vacation home offers guests a better, more interesting experience than staying at a cookie-cutter hotel.
At the same time, a vacation home is often more affordable.
Research from Harvard and MIT found that as many as 63% of Airbnb stays would not have stayed in hotels. Instead, many would have cut their trip short or not traveled at all.
Good for communities
This might sound a bit controversial because some communities balk at the growth of vacation rentals and the changes they bring.
But I believe increased vacation rentals are good for communities, and not just because of the money flowing in.
Having more visitors changes the dynamics of a community for the better, making dormant neighborhoods interesting year-round—not just during occasional peaks.
And this process feeds on itself. As more areas open for travel and tourism, guest experiences improve, and new investment opportunities appear.
But what does this all mean for you?
Perhaps you’ve been mulling over the idea of investing in a property yourself.
As I mentioned earlier, a good portion of vacation rental property owners cover the entire cost of the property through renting.
That means a vacation rental can make for a solid investment and help you expand your equity.
If you want to take a look at current homes available on the Northern Colorado market which would make a good vacation rental, take a look at this complete listing:
And if you want to discuss in more detail what you should be looking for, which characteristics vacation guests appreciate most, and which homes would make a good fit, give us a call. We’re here to help.