An investment differs from a venture in important ways. A venture requires thought work, commitment, time and a lot of kind luck. A well-constructed investment strategy contains a symphony of risk, reward, and diversity that offers consistent and predictable returns; at its best, it’s like a favorite song droning on in the background.
Short-term rentals are one of the strongest post-COVID portfolio additions. A high level of demand has been sustained between travelers, displaced home searchers, and rental tenants frustrated with longer-term leases. And higher-than-average prices that are being absorbed at occupancy rates far beyond the normal have caused short-term rentals to overwhelmingly outperform the traditional market.
All signs point to continued returns; investors should be able to look forward to maintaining strong margins even as the new normal continues to take shape. But investors who fail to manage their manual workload will find themselves engaged in a time-intensive venture rather than a lucrative investment. Short-term rental strategies can, with the right technological investments, work for the investor—without abstracted and automated operations, investors will quickly find themselves working for their rental.
Let’s consider a full walk through the hosting workflow to see how the proper use of PropTech can secure a short-term rental as a hands-free investment.
Marketing, Sourcing, and Guest-First Conversations
The tasks of finding leads, optimizing property listings, and talking prospective guests through the process can easily add up to an almost full time job. But PropTech solutions can run these processes while the investor sleeps. With integrated portal services, owners can brand their own booking sites and connect them to their own domain. Each listing can be integrated with marketing platforms—Google Tag Manager, Facebook Pixel, Facebook Hotel Catalog, etc.—to intake more analytics.
Deep learning technologies can be studying the market activity, and suggesting the optimized, seasonally-adjusted price and stay length for the property listing. Listings can then be adjusted across multiple booking platforms to appeal to the largest customer base. And advancements in the PropTech space now make it easy for investors to apply dynamic, pre-set pricing rules to their channel manager. They can set availability and manage bookings across the major platforms—Airbnb, Zillow, Booking.com, etc.—without hassle.
Next, guests can be engaged with customized messages. PropTech can help investors access their control platform from anywhere, granting and revoking tenant access codes as guests move through their stay. Virtual online-check ins and facial recognition ensure the safety of both parties. The same access control applies to property managers, cleaners, and maintenance teams; owners can pass the key around without ever being on the ground.
Security monitoring, temperature management, and granting control of in-home smart devices—all of this is made easy by recent developments in the PropTech space.
Optimizing Data—An Investor’s-Eye View
‘PropTech that improves our use of data will be the value-add that we’ll soon be unable to imagine ever having lived without,’ says Emir Dukic, CEO of Rabbu. Rabbu is a turnkey rental platform for investors looking to buy properties as short-term rentals. ‘Adjusted data and smarter analytics can supercharge an investor’s decisions.’
New solutions have come to market to help investors quantify every short-term rental consideration. No-cost rental property calculators can mine a local market for relevant, real-time data on comparable properties. Access to those numbers can help investors plan their next property acquisition and optimize their existing listings. They can understand how short-term rental properties are performing in specific areas, and which size and property type is outperforming the rest. Simply by inputting their address, investors can see the revenue and occupancy rates of surrounding properties, including detailed assumptions. They can then adjust their performance expectations and make better marketing decisions to list their properties in competitive ways.
With an integrated portfolio, owners can see the results of those decisions play out. All in one place, they can access their financial statements, track their onboarding progress, and measure the net operating income as it changes across different investments.
The above solutions have removed two non-renewable resources from short-term rental management: time and mental energy. Improved data availability, smarter analytics, and optimized visibility have taken the guesswork out of property listing, performance projections, and impact measurement. Solutions in the way of marketing, access control, and guest relations removes the need for the investor to be physically present—guests can cycle through the property, turnovers can be adaptively staffed, and management professionals can be compensated without any owner involvement. That is the correct amount of involvement; by diminishing the time and thought it takes to maintain a short-term rental, investors will find their short-term rental strategy to be an incredible source of market return, portfolio diversity, and long-term financial freedom.
