Short-Term Rental Investment Funds to See More Action This Year
Photo Credit: A three-bedroom property in the Hamptons, NY listed on Rove. Source: Rove A three-bedroom property in the Hamptons, NY listed on Rove. Source: Rove
Skift Take
Short-term rentals, including the luxury vacation segment, can expect a cash infusion from high-yield demanding investors this year, especially in the light of rising mortgages and flattening home prices in the U.S.
Exactly a year ago Skift reported private equity chasing investments in short-term rentals and vacation rentals. At the time though, a short-term rental real estate investment trust (REIT) seemed distant.
In October last year, luxury vacation rental brand Wander launched what it called the industry’s first vacation rental REIT named “Atlas” — with an attempt to attract investors with high yield-passive income promising eight percent annual returns and 14 percent targeted total return.
More an exception rather than a rule, a hospitality REIT-like trust for short-term rentals is yet to become mainstream. But short-term rentals are definitely growing as an asset class for deep and shallow-pocketed investors all alike. And the number of companies selling short-term vacation rentals as an attractive investment opportunity is on the rise — Pacaso, Voyax, Here — to name a few. This shouldn’t come as a surprise as U.S. short-term rental owners, investors and hosts generated over $62 billion in 2022.
The newest entrant with an offering is reAlpha, an real estate technology and investment company, which launched its fractional ownership platform for short-term rentals on Tuesday. The first vacation rental available for investing on its platform is a five-bed, 4.5-bath property located in Orlando, Florida. Fractional co-ownership of vacation rentals is not a new concept — German startup MYNE does it in Europe.
Those in the industry expect a lot of cash to come into
