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It’s Not Too Late to Join the Short-Term Rental Investing Game

Dusty Rhodes • November 1, 2021

It’s never been a better time to be a short-term rental investor.


Short-term rental investing, otherwise known as Airbnb or VRBO hosting, has been one of the hottest strategies for real estate investors over the last several years—and with good reason. It has a lot to offer.


What’s more, new data from AirDNA, a company that provides data to the short-term rental industry, suggests that right now—even in this crazy market—could be the best time ever to invest in short-term rentals.


What is STR?

If you’re unfamiliar with short-term rental (STR), it’s an investment strategy where you buy a property, but instead of renting it out to long-term tenants, you offer the property up on Airbnb, VRBO, or any other vacation rental website.


The benefits of STR

This strategy has grown really popular recently, and it’s easy to see why. First, it offers something that is pretty tough to find right now: cash flow.


Cash flow is becoming increasingly hard to get, primarily because home prices are rising so much faster than rents. But STRs still offer great cash flow potential. Of course, you need to have a good property in a good market—just like with any investment—but STRs have proven to offer cash flow even in markets that typically don’t have cash flow, like Denver, Austin, and Seattle.


Second, the markets that tend to do well for STRs are also high-appreciation markets. Think about where people go on vacation, like ski towns, lake houses, or big cities like Miami. There are markets that have grown immensely over the last several years. STRs offer the options to get cash flow and be in great markets that have big potential for property appreciation.


So there’s good reason why a lot of investors are getting into this strategy—and it looks likely that things are going to get even better.


How is the STR market performing?

To be honest, at the outset of COVID I was pretty worried about my STR. I thought that travel would come to a grinding halt and the property would sit vacant for months. Instead, the opposite happened, and COVID actually accelerated the existing trend of people shifting away from hotels and toward STRs.


To back this up, I got some data from AirDNA. Looking at this data, there are two terms you need to know: 1) occupancy, which is how many nights in a month your STR is rented out, and 2) average daily rate (ADR), which is basically the average amount that guests pay to rent your property.


To figure out your cash flow, multiply your occupancy by your average daily rate. As an investor, you want both your occupancy rate and your ADR to be high. The data from AirDNA shows that both are up significantly over the last few years.


Occupancy is up

The chart below shows that 2021 has been the best month for occupancy on record—or at least dating back to 2018. So despite all of the restrictions and limits on travel during the pandemic, the demand for short-term rentals is up significantly over both 2020 and 2019 numbers. Look at the difference between the yellow and green lines throughout this year. Demand and occupancy are up.

What’s even bigger news is that the average daily rate across the U.S. is up 22% when comparing July 2021 to July 2019. That is enormous growth.


If you put these things together—increased occupancy plus huge growth in ADR—that means a lot more cash flow for STR investors.


Small cities and rural areas are popular

Of course, not all STRs are the same. It’s no surprise that some types of properties and some markets are going to fare better than others—and AirDNA has provided some data to help shed light on what’s going on.


The chart below shows that there is a big difference in demand between location types. Make sure to note the y axis on this chart. You’ll see that 0% is right in the middle, so the lines below that all saw declines and the lines above saw growth.

To me, the big takeaway here is that small cities and rural towns are exploding along with destinations and resorts, while large cities have really taken a hit. Those large cities are recovering, but they have yet to return to pre-COVID levels. On the other hand, small city demand remains very high and is way over 2019 levels. As an investor who owns an STR in a mountain town, I can confirm from my own experience that demand is super high.


Larger units are in demand

Guests are also choosing larger units. The following chart shows that big units are way up, while shared and private rooms remain down. This is common sense to me given the world right now—no one wants to share a room during a pandemic, and many families have been renting big houses for longer periods of time as a way to get everyone together. The data suggests that as of now, the bigger the better, and I think this trend will likely continue.

Finally, the data shows us that demand is highest for luxury properties. Maybe people are spending their extra money on vacations more than they did in the past. Maybe more people are finding value in staying in a nice place after a year being at home. Regardless of the reason, the data is clear: The more upscale the property, the higher the demand growth.

A bright future for STRs

All told, this data is super encouraging for STR investors. We’ve seen that occupancy rates are up and ADR is up, meaning there is more cash flow coming into the market. We’ve also learned that large, luxurious properties in small cities or vacation destinations are performing the best right now. So whether you’re a current STR investor or you’re looking to get into the market, these could be sweet spots to look at for your next purchase.


If you’re thinking about making an STR investment, I have two resources for you. First is AirDNA, which honestly has the best STR data on the market; I use it myself and it has been extremely valuable. Second, I put together a guide to analyzing STRs earlier this summer that you can find on BiggerPockets—it’s super useful if you’re getting into the short-term rental game, so make sure to check that out.



Source: Bigger Pockets Blog


Dusty Rhodes Properties is the Best Realtor in Myrtle Beach! We do everything in our power to help you find the home of your dreams. With experience, expertise, and passion, we are the perfect partner for you in Myrtle Beach, South Carolina. We love what we do and it shows. With more than 22 years of experience in the field, we know our industry like the back of our hands. There’s no challenge too big or too small, and we dedicate our utmost energy to every project we take on. We search thousands of the active and new listings from Aynor, Carolina Forest, Conway, Garden City Beach, Longs, Loris, Murrells Inlet, Myrtle Beach, North Myrtle Beach, Pawleys Island, and Surfside Beach real estate listings to find the hottest deals just for you!

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The Secret To Selling This Spring: Start the Prep Work Now

By Dusty Rhodes • February 17, 2025
Spring is the busiest season in the housing market. It’s the time of year when buyers are most active – that means it’s when homes sell faster and for top dollar. If you’ve already got a move on your mind, why not list this spring and take advantage of the added buyer demand ? Since spring is just around the corner, now’s the time to start getting your house market-ready. You’ve got just over a month to do the prep work. And while that may sound like a decent amount of time, it’s going to go by quickly. And you won’t want to rush through this important task – especially this year. The Right Repairs Will Matter More This Spring Right now, two things are true. There are more homes on the market than there have been in years. And buyers are being extra selective. That combination means you need to invest some time and effort in making strategic repairs . And many homeowners already have a jump on this work. In the 2025 Outlook for Home Remodeling , Carlos Martin, Director of the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University , explains : “. . . homeowners are slowly but surely expanding the pace and scope of projects compared to the last couple years.” And the most common projects they’re tackling are replacing water heaters, HVAC units, and flooring. Energy efficiency is a key consideration too, based on home improvement data from the Census. What To Prioritize as You Plan Ahead But just because that’s what other homeowners are doing, it doesn’t mean that’s what you have to tackle. Think about what you’d want to see if you were a buyer. Focus on quick wins that are easy to knock out with the time you have – but, don’t ignore key repairs, especially ones you think could turn off buyers. While big-ticket items like replacing an old roof or outdated flooring may seem daunting, they can pay off – especially if you focus on projects with the best return on investment (ROI). An agent’s expertise is key in narrowing down your list to what’s actually worth it. They know what buyers in your area want and they also have data like this report from Zonda to guide you on which updates have the best ROI ( see green in the graph below ):

41 housing markets where inventory just tipped in favor of buyers

By Dusty Rhodes • February 10, 2025
Among the nation’s 200 largest housing markets, these 41 metro areas now have active inventory at or above 2019 pre-pandemic levels. While homebuyers and home sellers still see headlines about the housing market being a seller’s market and national home prices reaching all-time highs, a deeper look reveals that several regional housing markets have shifted, giving homebuyers some power. During the pandemic housing boom, from summer 2020 to spring 2022, the number of active homes for sale in most housing markets plummeted as homebuyer demand quickly absorbed almost everything that came up for sale. Fast-forward to the current housing market, and the places where active inventory has rebounded to 2019 levels (due to strained affordability suppressing buyer demand) are now the very places where homebuyers hold the most power. At the end of January 2025, national active inventory for sale was still 25% below January 2019 levels. However, more and more regional markets are surpassing that threshold. Among the nation’s 200 largest metro area housing markets, 41 markets ended January 2025 with more active homes for sale than they had in pre-pandemic January 2019. These are the places where homebuyers will be able to find the most leverage or market balance in 2025.

Selling vs. Renting Out Your House: Which Is Right for You?

By Dusty Rhodes • February 3, 2025
Leaving your current house and moving to another one gives you a few options. While most homeowners choose to sell outright, many opt to keep their old home and rent it out instead. This decision can be influenced by several factors: a strong rental market in your area, the advantage of a low current mortgage rate, or challenges in selling the house at the desired price. If you’re wondering whether to sell your house or rent it out, there are a few things to consider. Key Takeaways The answer depends on your circumstances, your housing situation, and your current finances. Selling your house may be the right option if you need the proceeds to purchase your next home or could make a profit. Renting out your house may be the right choice if you’re planning to live in your home again, have a low mortgage rate, or are looking for more income. What are the rental prices in the area? Does it make sense to rent your house? In some locations, rental prices can easily cover your mortgage payments. Depending on how much you have left on your mortgage or if you have a low mortgage rate, the rental income from your old house may cover the monthly payments, plus homeowners insurance and property taxes you pay. However, if you’ve recently purchased your house and are looking to rent it out, your mortgage payments may be too high for a lease to cover them. Take a look at houses that compare to yours with regard to size and location. This should give you a ballpark figure on what price your house can lease for. If you aren’t on a tight timeline to leave your current home, take notice of how quickly similar houses in the area take to lease. If rental properties stay empty for more than a few weeks, you may have trouble finding consistent tenants. A real estate agent can help match you with a tenant or give you an idea of your rental prospects. They can also give you insight into whether your location is desirable for tenants. For instance, if it’s near a university or larger employer, you may be able to rent to students or to employees who relocate for that large employer. However, if the house is far from the city center, or you’re located in a residential neighborhood, you may have trouble finding tenants. Do you need equity from your current home? Why are you leaving your old house? Are you purchasing a new home? If you’re planning to upgrade to a larger home, you may need the money from the sale of your old one to place a down payment on your new house. If you have enough equity in your current home, it may make more sense to sell the house instead of renting it. If you’re able to afford the down payment on your new home without selling your current one, usually about 20%, then renting out your old one makes sense. What is the market like in your area? The housing market isn’t consistent across the country, and even different parts of larger metro areas may be more or less robust. If the current market is slow and you think you can sell your home for a higher price in a few years, then it may make sense to rent the house until housing prices rise again. However, if it’s a sellers’ market and you can get the maximum selling price for your home, then selling it may be the better option. Keep in mind that houses that have been rental properties, often have a harder time selling afterward. You may have more wear and tear in the home if multiple tenants have lived there, which may mean spending more to prepare it to show and sell. An experienced real estate agent in your area can help you determine the top vales of your home and whether or not the current market can support that selling price. Agents who have been in the area long enough to become familiar with the housing market are in a good position to help you determine the best time to sell. Will you live in the house again? Consider whether you plan to live in the house or the area again. You may be in a situation that requires temporary relocation, and you plan to return to the original home in a few years. Having a good tenant to live in the house can ensure that your home stays in good condition instead of sitting empty. You’ll also have income from the rental property and building equity in the old home and your new one. Do you have the time and money to be a landlord? For those who are new to investing in rental properties, it may seem easy to rent out their current home and enjoy passive income while paying down their mortgage. However, if this is your first time being a landlord, you may find leasing your property yourself challenging. First, landlords are responsible for making major repairs to the house. Landlords have to fix things like broken pipes, defunct HVAC systems, and structural damage, among other essential repairs. If you don’t have a few thousand dollars on hand to take care of these repairs, you could end up in a bind. There are specific laws in place to protect tenants, including the landlord’s reliability to make major repairs on the house. In addition, there are certain things that you can and can’t do as a landlord. Being aware of Fair Housing Laws is critical to make sure that you don’t inadvertently violate them. Do you need a property manager? A property management company can help vet tenants, collect rents, and arrange for repairs and maintenance on your behalf. A good property management company is also up-to-date on current requirements in your state for landlord obligations. If you’re planning to just lease your house, you may choose to manage the repairs and tenant search yourself, especially if you live nearby. However, if you’re planning to build a portfolio of rental properties, then having one company manage them may be a better option. Property managers can help ensure that your house or houses stay full, including working with local agents, having open houses for prospective tenants, and quickly running background and credit checks for those applying for a lease. As a passive landlord in this situation, you’re able to free yourself of the obligation for emergency repairs and the time searching for people to live in your rental property. Consider rent-to-own Another option when you’re considering whether to sell or rent your house is to engage in a rent-to-own agreement. In these situations, the tenant will place a down payment on the house and make lease payments to you for a specified period. After the lease is up, then the tenant has the option to purchase the home. During the time they’re making lease payments, a portion of those payments will go toward the final price of the house. This option may work for you if the housing market in your area is stagnant, allowing you to cover the mortgage without entering into a long-term obligation to a rental property. These rent-to-own options can be beneficial for tenants, too, as their financial situation may improve enough over time that they’re able to obtain a mortgage. What makes a house a good rental property investment? Does your house have the potential to be a good income property? There are a few things to consider before listing your house for rent. You may have to make some minor repairs and upgrades to your property to attract good tenants who will take care of the house and pay on time. Fresh paint and carpet are usually a must and are required in some areas. The location of your investment property is one of the most important things in determining whether you’ll have steady tenants or be responsible for covering the mortgage out of pocket if the house sits empty. The home’s location can easily make the difference between having a steady tenancy and losing money on the rental property. Final thoughts on renting or selling your home Deciding whether to sell your house or rent depends on carefully analyzing the area and the property’s desirability. Will the area be in high demand for renters, or is it likely that you’ll struggle to find tenants? You’ll also need to take a look at your finances and determine if selling or renting will give you the best return on your investment. Choosing the right real estate agent to advise you in this process can help you answer your question of whether to sell or rent your house.
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