Airbnb/Vacation Rentals: History, Growth & Core Real Estate Investment Strategy

Airbnb/Vacation Rentals: History, Growth & Core Real Estate Investment Strategy

Hey Hoasty fans, why would you go through the upfront cost of furnishing, consumables, and all the work that goes along with turning your property into a Airbnb / Vacation Rental? 

One word: Cashflow

Let’s start from the beginning CFRI: Hi there I’m Ken Barton, CEO & Founder of Hoasty.co. Hoasty manages Vacation Rentals in 10 states (as of August 2019) and has grown about 100% month over month since inception. 

Before we get deep into the weeds of considering whether you should traditionally rent or vacation rent your property, let’s talk about what it means to ‘vacation rent’ or ‘short term rent’ a property. 


Vacation Rentals have been going on for hundreds of years, and were made mainstream by a little company called Vacation Rental By Owner which quickly branded as VRBO; founded in 1995. You may know vacation renting as a short term stay at a property, usually owned by a private owner and not by a company. 

A little over a decade later, a young upstart from San Francisco decided to start an online marketplace for these short term stays which had previously been known for paper catalogs sent to folks with the penny saver newspaper. Believe it or not, Airbnb itself was wildly unsuccessful for quite some time. Here’s a link to the amazing journey the founder of Airbnb went through to build their billion with a B dollar revenue company. 

Today there are a number of different booking platforms such as HomeAway, VRBO, Airbnb, MisterBnb and even the massive company Booking.com is getting into the vacation rental business. In the USA, as of 2019, nearly 33% of the total traveling population has stayed at a private residence or accommodation to date, and that number is expected to be over 50% by 2025 (source Vacasa). 

At Hoasty, we consider each of our clients Real Estate Investors. Our average client has 3 to 5 properties with Hoasty, and are looking to leverage a few aspects of freedom and cashflow that vacation rentals provide. Here are some examples: 

  • Your property is constantly professionally cleaned, therefore always in showable condition

  • You maintain personal use of property any time

  • You make more money on holidays

  • Create exponentially larger proven rent rolls

  • But most importantly, make more monthly cashflow than traditional rentals

But ya’ll, listen up, this is a classic example of the risk return reward. The first thing I tell prospective clients of Hoasty is we do not guarantee more rent, and any anyone that does is lying to you or misleading you. Investors who leverage Vacation Rentals realize the opportunity at hand to make more money from shorter term stays, which are a trade off to the stable traditional rent the market is accustomed to. 

As an Investor I am sure you are excited about the numbers. So I am going to share some details of a recent conversation that I had with a CFRI member. 

Case A: 190 Unit Apartment Complex

Recently at a CFRI meeting, I was discussing with one of your prominent apartment syndicators the concept of leveraging some of their units as Vacation Rentals. They explained that the building has about 190 units, and it has about an 88% current occupancy. That lead me to think that there were at least 19 vacant units not making this investor any money. 

As we discussed I learned that the building make up had a variety of units: 

  • 3/2

  • 2/2

  • 2/1

  • 1/1

This building happens to be in Tallahassee, and is right in the center of the action as it comes to Florida State University. So before sitting down with this investor to dig into the opportunity, I wanted to go run some RentOMeter numbers on average rents in the area. Here’s what I found from RentOMeter.com:

So as an average for these units, they are looking at: 

  • 3/2: $975

  • 2/2: $875

  • 2/1: $875

  • 1/1: $600

These assessments are pretty understandable when it comes to the amount of housing sprouting up in college towns like Tallahassee. Massive supply influx that may be outpacing demand; pretty logical. 

After understanding these numbers, Hoasty leveraged it’s subscription to Airdna.co (one of the leading data resources for vacation rentals) to understand what those vacant units could earn. 


So as it turns out, these units are in a prime location for Vacation Rentals, as they are less than a ½ mile walk to the Florida State University Stadium, and less than a single mile from FSU’s campus. 

Comparatively, the investor realized that he could make substantially more by Vacation Renting / Airbnbing his vacant units than he would have traditionally renting them. This investor was interested in hiring outside management of his vacation rental units, so here is the breakdown of exactly how much the investor would net net with Hoasty as his hospitality management company: 

Hoasty Management Breakdown

Looking at the opportunity side by side, with the net net earning in mind, it is easy for an investor to see how attractive it is to leverage Vacation Rentals as a unique and profitable revenue stream for their units. 

Screen Shot 2019-08-28 at 8.11.04 AM.png

After we compared these numbers side by side it was easy to understand that this may be a more attractive option than finding ways to fill the investor’s current vacancies. 

To be clear ya’ll, these are two very different investment premises. Here are some things to consider when looking to achieve that 100%+ more cashflow monthly: 

  • Pricing algorithms for your vacation rentals

  • Management services for vacation rentals

  • Cleaning services for vacation rentals

  • Lodging and City Taxes

  • Additional Insurance Cost

  • Furnishing investment (one of the largest upfront costs)

  • Utilities

  • Lawn & property care


If you are looking for a unique way to leverage your real estate investments, and drive more cashflow month over month, you may indeed want to consider Vacation Rentals. 


Ken G. Barton

Ken@hoasty.co

407.978.7064

Hoasty.co



Airbnbs are Stocks, Rentals are Bonds

Stocks & Bonds Ya’ll,

Recently Hoasty has been spending a lot of time with Real Estate Investors, and we even have a surprise coming next month for those faithful that read our blog each week, but we wanted to share a few things that we cover with Investors when we discuss Airbnb Real Estate Investing.

So let’s get right to it. But do stay tuned for our next month’s launch of our new podcast called, “Real Estate Empire” Podcast. Check in early June to hear more about it.

Risk & Reward

Stocks & Bonds Theory

We actually received this thought from an @properties real estate agent in Chicago, after sitting down for a vanilla latte and discussing the business that Hoasty is in.

Meredith was taking in a lot of information, but she was able to parse Hoasty’s (and vacation rental’s) value proposition down into a very simple comparison of Stocks & Bonds.

Bonds, in this situation, are traditional rentals. When a tenant signs a lease, the owner may never expect to make $1 more than was originally agreed to in the contract. Much like a bond, it is a debt owed by the tenant to the owner of the property over a specific lease period.

Stocks, on the other hand, provide for exponential growth. When utilizing stocks for investment, the investor expects to make more and more money over time. Preferably the investor would prefer to make more money than the market rate, and therefor grow their wealth.

Vacation rentals are like stock. There is more risk in this path, but without a doubt more return. Take for example this property:

Screen Shot 2019-05-10 at 10.59.05 AM.png

VS $1,200/monthly

That’s 14k in rent vs 39k in Vacation Rental. No Brainer.

This is a great example of how Vacation Rentals can provide more than 100% more revenue to the owner of this unit, but they do come with different costs as well.

Think of such things as internet/wifi, electricity, water bill, and furnishing the unit.

But the fact is, with an additional $25,000 in revenue each year, it’s not a hard decision to make for an owner seeking higher cashflow.

Now these numbers are generated on the concept that this unit is 100% used for Vacation Rentals, and is not personally used as well as having no ‘down time’ for repairs and personal use during the year.

But what I often remind real estate investors of these opportunities is that this is the revenue potential with just 58% occupancy. When the unit achieves 70% to 80% occupancy, the revenue nearly doubles again.

As you can imagine, this is where the benefit of having Hoasty manage your Vacation Rental properties allows you to provide your guests:

  • Seamless check-in check-out experience

  • 24/7 rapid communication

  • 1 day booking potentials

  • Cleaning Management

  • Consumable Management (paper towels, napkins, coffee, toilet paper…)

  • But potentially most importantly -> Automatic Revenue Optimization

Don’t be shy to contact Hoasty if you are interested in learning how much your property could earn.

Louisville is Proposing a 600-foot Rule for Airbnbs: Compromise or Catastrophe?

"It's very healthy for us to have short-term rentals alongside the hospitality market inside a neighborhood, the same way that Uber and Lyft are healthy alternatives for taxicabs and buses. And it's the way it's going," Hill said. "We can't put the genie back in the bottle."

A healthy market, Hill said, will balance out over time: "All that will come together, if we just let it do it on its own, with guidance and supervision of those that can enforce the proper oversight. The thing is, it's an evolution."

Louisville has some new regulations coming down the line but they understand how the market is changing.

🤓🤓🤓

It is a 600-feet rule. The proposal prohibits newly registered, nonowner occupied properties from being within 600 feet of another short-term rental in residential areas. Not the worst - just information. Check out our blog post this week to see how things are evolving in Louisville by clicking on the source link below.

Could be a rule that pops up again somewhere else.

Seminole Looks at Rules for Airbnb, Vacation Rentals

“After all, Central Florida is one of the top tourist destinations in the world with an estimated 72 million visitors a year. Many homeowners see a lucrative opportunity in opening up their homes to out-of-towners wanting to avoid crowded and expensive hotels.

In 2018, about 4.5 million visitors used Airbnb in Florida, providing homeowners and hosts $810 million in supplemental income, according to the company.

In Seminole, about 22,000 visitors used Airbnb in 2018. That’s roughly double the number from 2017. Elsewhere in Central Florida, Osceola had about 640,000 guests; Orange, 338,000; and Lake 49,000, according to numbers provided by Airbnb.

“We’re seeing the fastest growth outside the large, urban areas,” said Ben Breit, a company spokesman.”

Florida is the place to be y’all. Regulations are getting updated but the rights of property owners in Florida will always be important. We will still need to double check with certain neighborhoods and city ordinances on noise and parking, but things are looking real good down there. Find the article by clicking on the source link below and see what’s going down in Florida.

If you are looking for an investment property check out our list of properties that we think would do well in the vacation rental market - HoastyInvest or email ken@hoasty.co with any questions.

Have a property in mind for vacation rental? Want to see the numbers?

Submit a property by clicking on the link below to see what it could be making you.

6 Steps for Successfully Investing in Vacation Rentals

“Investing in vacation rentals is certainly a different beast. It’s not at all like a regular investment — stays are shorts, seasons matter, and marketing is absolutely king.  The ‘wow’ factor starts the second someone inquires about your property and lasts through the time they check out.  Your task is to figure out how to wow them from start and keep them in awe so they tell everyone else how great the experience is at your property.”

This article by Chris Clothier is a great read if you want to know what it takes to find the right property for vacation rentals and what it takes to make it successful. Hoasty can help you do both of those things, as well. If you are looking to see what markets are best for vacation rentals check out HoastyInvest. We breakdown 10 properties a week in different states all over the US to see where the best investment for short term rental is right now. Factoring in regulations and demand, HoastyInvest is what you want before you buy.

For more information on finding, acquiring, and making bank on short term rentals, you can also register for our weekly live webinar called Hoasty House Hacking that happens every Friday at 10:30am. We will chat about all the best strategies to make this rapidly growing market work for you. We will be answering questions live so come on down! :)

Vacation Rental Tax Tips

Death and Taxes, am I right?

Vacation rentals are a great investment opportunity, ya just have to make sure you know how to do your taxes. This article is perfect for some tips about what you should be thinking about come next April.

Also if you would like to learn more about the vacation rental/ tax game come join us for our live webinar on “Airbnb, Strategy, Taxes & How To Win!” we do every Thursday. You can register by clicking on the button below. Come stop by and ask all the questions so you all ready by this time next year. Hope to see you there!

Airbnb Just Checked in its 500 Millionth Guest

“In addition to the 500 million milestone, Airbnb has shared that its hosts have earned $65 billion from renting out space on the platform. That number is expected to swell, quickly, as Airbnb says it saw 152 percent growth in the number of rooms available on its platform. The geographic distribution of guests has expanded, too, with outlying markets increasing their share of arrivals.

Finally, the age of hosts has become more diverse. Seniors are now the fastest-growing demographic in the U.S., while 70 percent of bookings in the last three years were made by guests under the age of 40. Millennials around the world have spent more than $31 billion booking travel on Airbnb.

Everything’s coming up Airbnb!

(Gypsy reference for any musical theatre fans out there.)

Peer to peer rentals are not going anywhere. Want to be part of the next $65 billion Airbnb helps its hosts make? Check out this article by clicking on the link below to read about how they got to this milestone and how they are evolving.

Exciting stuff, right? Got a property you want us to run the numbers on? Click on the button below to submit your property’s information and we will get you a proposal showing how much it can make you this year.  

Travel Trends for 2019 and How Short Term Rentals Play a Big Part

The rules of vacationing are changing, and next year, the evolution will have reached its peak. According to experts from Airbnb and TravelPirates, tourists will be taking the roads less travelled. Instead of booking traditional vacations, they'll be seeking more memorable experiences and unique accommodations, while booking their trips in the off-season and taking advantage of last-minute deals.

"With 58% of millennials considering how holiday accommodations look on their social media when booking, it’s no surprise unique Airbnb listings continue to be a major draw for travelers," explains Ali Killam, consumer trends spokesperson at Airbnb."

The demand for short term rentals is only going up. Check out the travel trends this year and think about how your property could benefit. Better yet ask us to run the numbers so you can see the potential revenue your property could make by clicking on the Got a Property? button below. Under our management, your property will be Instagram ready and making you money in no time. Submit your property information below or if you have any questions send us an email at marykate@hoasty.co.

Regulations: What Happened in 2018 and What to Look for in 2019

“The 2018 legislation season brought the vacation rental industry some high highs, low lows, and everything in between. Cities that had been embattled for years made big moves, communities issued bigger petitions and bigger votes, and they all made one thing clear: the war is not lost, and the battle is only heating up.”

This article is a great look into how things rolled out last year and what this year is looking like for short term rental regulations. Things are changing quickly and it can be hard to find clear information. If you are interested in short term renting your property and want to know what the revenue might look like, click on the HIRE US button below and fill out a form. We love chatting about this rapidly changing market so just let us know how we can help you realize the full potential of your investment.

Short Term Rentals Made Easier in Indiana

The reality is that an Indiana law set to take effect July 1 defines the hosts of Airbnbs and other short-term rentals as merchants who must produce a statement that denotes any taxes, such as a 7 percent tax that hotels and bed-and-breakfasts pay. But that law doesn't spell out who should collect and remit those taxes.

A new bill before state lawmakers, however, would clarify that the responsibility falls to the hosts but would also allow Airbnb and other short-term rental platforms to collect and remit taxes electronically, eliminating a potential headache for hosts.

Keep your eyes on Indiana, folx. Things are about to be easier in this state where regulations are light and home owners rights are protected. If you are interested in a property in Indiana, or anywhere else, click on the HIRE US button to see the potential revenue you could be making with short term rental.

5 Cities Where Airbnb Is Illegal

Many cities have legal restrictions on Airbnb rentals. These vary greatly depending on your rental property’s location, what type of property you own, and how long you rent it out as a short-term rental. In some cities, restrictions are so severe they make most Airbnb rentals almost impossible. Unfortunately, short-term rental regulations can be confusing and, as a marketplace, Airbnb doesn’t provide legal advice to help real estate investors understand and comply with these laws.

Therefore, before deciding to purchase an Airbnb investment property, it’s important that you do your homework and check Airbnb laws in your city. Real estate investors operating in cities where Airbnb is illegal may face legal issues and be forced to pay thousands of dollars in fines. So, where is Airbnb illegal in 2019? Here are 5 major cities in the US housing market where owning an Airbnb investment is illegal and what you need to know if you want to invest in one.

Check it out and ask us about the cities that are the best for Airbnb rentals. :)

$109 mm for Chicago Host Community in 2018

This data, from Airbnb, includes Cook County and some of the larger suburbs, such as Evanston and Oak Park. Airbnb released these numbers as well as positioned themselves as “complements” to the local hotel industry. “Airbnb is opening up Chicago and its suburbs to a new slice of prospective tourists by catering to travelers less able to afford hotels, families who prefer to be together under one roof and those who desire to stay in neighborhoods or cities that lack hotels.”

Airbnb is expanding and everyone needs to have their eyes on the North and the West of Chicago. Have you been out to Evanston, Oak Park, Skokie or Wilmette recently? Things are changing quickly and are looking beautiful. There is potential for Airbnb to work in and for these neighborhoods, as well as work for you. You ready?

The Shared Housing Ordinance of 2017

(Insert dramatic music here.)

This is the Chicago Shared Housing Ordinance of 2017. It talks a lot about definitions but then gets into the good stuff like your licenses, fines, etc. Mayor Rahm Emanuel did add some surcharges in 2018 to invest in social programs, which is not the worst thing because helping people is cool and taxes are good. Taxes mean the city sees money and growth in short term and vacation rentals so they aren’t going anywhere. So nestle up to the fire with some serious coffee and check it out.

P.S. There are 38 pages in Chicago’s ordinance to Evanston’s 2018 5 page ordinance.

https://www.chicago.gov/content/dam/city/depts/bacp/Small%20Business%20Center/sharedhousingordinanceamendments.pdf

Chicago Host made $3.3 mm during Lollapalooza in 2018

In Chicago, the hosting community made $3.3 million during the Lollapalooza Music Festival. Each of the 19,000 guests that graced our fair city spent over $171 per day at restaurants and retail stores, with half that money remaining in the neighborhood where the home is located. Specifically, the South Side neighborhoods saw boom in occupants due to its close proximity to Grant Park. The average South Side host earned $465 over the four-day music extravaganza, with Bronzeville, Woodlawn and Pilsen benefitting most.


If you are feeling like making some money but want to avoid the stress of August 1st-4th, Hoasty can help. We can give your guests exceptional customer service while watching over and protecting your investment.

Lollapalooza is always a blast for the native Chicagoan (insert eyeroll here), but with the this spike in revenue for investors and the city we say “Come on down, flower crowned 20-something! Let’s do this!”