In this episode of "STRonomics," hosts Bill Faeth and Kenny Bedwell discuss the opportunities and challenges of investing in urban short-term rentals, particularly in cities like New York and other urban markets. They highlight the key takeaways and insights from their discussion, including the impact of changing regulations, the importance of community sentiment, and the need for advocacy in urban markets.
Key Takeaways:
Urban Market Attraction: Urban markets offer higher return on investment (ROI) and less seasonality compared to vacation rental markets, making them an attractive option for short-term rental investors.
Differentiation in Urban Markets: It's often easier to differentiate your property in an urban market compared to a vacation market, as there may be fewer short-term rental properties available.
Risks of Regulatory Changes: Investing in urban markets comes with a higher risk of regulatory changes, such as occupancy limits and zoning restrictions. It's essential to stay informed and involved in local regulations.
Form Local Associations: To protect short-term rental interests in urban markets, property owners should consider forming or joining local associations to have a collective voice in advocating for fair regulations.
Understand Exit Strategies: When investing in urban markets, ensure your properties can also perform well as long-term rentals. This provides an exit strategy in case short-term rentals face challenges.
Resources and Links Mentioned:
Urban Markets: Some urban markets with favorable short-term rental conditions include Asheville, North Carolina; Charlotte, North Carolina; Raleigh, North Carolina; Greenville, South Carolina; Lexington, Kentucky; Memphis, Tennessee; Birmingham, Alabama; and others.
Community Sentiment: Investing in markets where community sentiment is positive towards short-term rentals can reduce the risk of regulatory challenges.
Local Associations: Consider forming or joining local short-term rental associations to advocate for fair regulations and stay informed about changes in your market.
Exit Strategies: Ensure that your properties can perform well as long-term rentals, providing an exit strategy if short-term rentals face regulatory challenges.
Conclusion:
Investing in urban short-term rentals can be lucrative, but it also comes with unique challenges, particularly in dealing with changing regulations and community sentiment. Staying informed, forming local associations, and having exit strategies in place are essential for success in these markets. Remember to perform thorough due diligence before investing in any market to minimize risks.
Note: The hosts emphasize the need for property owners in urban markets to stay informed and involved in local regulations and advocate for fair rules to protect short-term rental interests.
Disclaimer: This podcast episode is not intended as financial or investment advice. Listeners are encouraged to conduct their research and seek professional advice before making any investment decisions.
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