The short-term rental asset investment market has been growing rapidly in recent years, driven in part by the increasing demand from millennials. Millennials, who are currently in their mid-twenties to late thirties, are a generation that values experiences over material possessions, and they prefer to spend their money on travel and other experiences. As a result, the short-term rental market, which includes platforms like Airbnb and Vrbo, has become increasingly popular among millennials.
Hence Young Millennials and Gen Z are changing the face of the short term rental asset investment market in several ways:
1. Investment Opportunities: The short term rental market has seen significant growth over the past few years, with more and more travelers choosing short term rentals over traditional hotels. This has created a lucrative investment opportunity for Young Millennials who are interested in real estate investing but may not have the means to invest in long-term rental properties.
2. Sharing Economy: Younger generations are more open to the sharing economy model, which allows them to earn extra income by renting out their properties on platforms such as Airbnb. This has made short term rentals a popular investment option for young investors who are looking for passive income streams.
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3. Flexibility: Younger generations value flexibility and are not tied down to traditional 9-to-5 jobs. This means that they can travel more frequently and are more likely to book short-term rentals for extended periods of time. They also value flexible check-in and check-out times and the ability to make changes to their travel plans on short notice.
4. Environmental Impact: Many Young Millennials are environmentally conscious and prioritize sustainable living. This has led to a growing interest in eco-friendly short-term rental properties that use sustainable materials and practices. As a result, they are more likely to invest in short term rental properties that are eco-friendly and sustainable, which can appeal to environmentally conscious travelers as well. This can also be a way for them to align their investments with their values.
5. Focus on Experience: Younger generations are more focused on experiences than material possessions. This means that they are more likely to seek out unique and interesting short term rental properties that offer a one-of-a-kind experience for travelers. As a result, they are more likely to invest in properties that are well-designed and have unique features that cater to travelers looking for a memorable experience.
Overall, the growing need among millennials for unique travel experiences, coupled with the investment potential of short-term rental properties, has contributed to the growth of the short-term rental asset investment market. It is expected that this trend will continue in the coming years as more and more millennials enter the housing market and seek investment opportunities that align with their values and lifestyle. These trends are driving Young Millennials to become a major force in the short term rental asset investment market, as they seek out investment opportunities that align with their lifestyle, values, and financial goals.
(By Siddharth Maurya, Resource Specialist, Expertise Real Estate and Fund Management)