By The Wall Street Journal
Vacation homes have seen growing demand since the pandemic began, and investors are taking notice of the sector, largely the domain of individual homeowners until now.
Investors want to capture more of the bustling market for short-term rentals. Saluda Grade, a New York investment firm, has teamed up with AvantStay, a short-term rental operator, to buy about $500 million of homes. Saluda Grade, which is targeting homes within driving distance of major population centers, will buy the properties, and AvantStay will manage them for a fee, The Wall Street Journal reports.
“There’s a lot more yield available in the short-term market,” Ryan Craft, Saluda Grade’s chief executive, told The Wall Street Journal.
The startup reAlpha Tech Corp. is reportedly pooling money from small-time investors to buy short-term rental homes as well.
But buying properties one by one can take time and make it more difficult for investors to invest large sums all at once, The Wall Street Journal reports. Also, many cities have restrictions on the amount of short-term rental listings.
“Regulatory risk is a huge problem,” Sebastian Rivas, CEO of Andes STR, told The Journal.
But investors are eyeing how to take advantage of the growing interest in short-term rentals. Short-term rentals, such as those offered through Airbnb and Vrbo, have been growing in demand as remote work has allowed more people to work from anywhere.