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September 25, 2019

Why International Vacation Rentals Are A Lucrative Niche For Real Estate Investors

 

Partbnb’s vision is to enable investors to share in the many benefits of part-owning a vacation rental property without the high upfront financial or time commitments. Partbnb is a platform and a marketplace that offers low entry costs, high yielding monthly dividends, and real estate investment diversification.

 


 

Just a few years ago, vacation rental sites were mostly filled with people who just wanted to rent out their extra bedroom or their second home. Today, vacation rentals of all shapes and sizes are available around the world and there’s more demand than ever. 

So, why are vacation rentals generating such large returns for investors? Let’s take a look at why this type of investment is such a great option for real estate investors. 

The Vacation Rental Market is Booming

Although there has been a relative slowdown in economic growth around the world, the Vacation Rental Industry still looks optimistic. It grew from $61 million in 2014 to $83 million in 2017, according to Reuters stats. Researchers predict that in the next few years, the vacation rental market will expand in size and will reach $165 million. In fact, VRMB predicts that by the year 2020, vacation rentals will topple hotels

These types of accommodations are very convenient to book, offer minimal wait time and usually have high customer satisfaction. International vacation rentals are in especially high demand among Millennials and Generation Z. 

These types of travels tend to prefer these types of vacation properties because of the flexibility, personal touch and authentic, local feeling. It is predicted that this trend will continue to grow over the next few years. 

International Vacation Rentals Allow You To Diversify

Owning international vacation rentals can be a great way to diversify your portfolio – especially if you own several types of rentals in different areas. 

It’s always important to keep your portfolio as diverse as possible, so that no matter what happens in the economy – your assets will still thrive. If all of your investments are the same, there is the chance that your entire portfolio can be wiped out by a single event. 

One of the advantages of vacation rentals is that you can invest in several properties in various locations. If all your property investments are in the same country, you’ll be in trouble if the economy of that particular nation suddenly takes a nosedive. International diversification is key and it will help you to further secure your wealth. 

The more international your property profile is, the more the state of one particular government won’t affect you as much. You’ll also be insulating yourself from any instability that might arise in your own home country. After all, you never know what the future might bring. 

You can even invest in a range of different types of properties – such as small apartments, large villas, beachside cottages and much more. Even if one of your properties becomes less popular, the others will still continue to thrive. For example, the destination might shift over time from being a quiet romantic getaway to becoming more popular with families or groups. 

When it comes to diversifying your portfolio, you might also want to consider fractional ownership. This allows you to purchase a small part of each property, without having to own the entire thing. You’ll have the chance to invest in multiple properties, even if you don’t have as much capital. 

You’ll Make More Money Than a Long-Term Rental

After all, the nightly rate you’ll charge for your property adds up to much higher per month than the monthly rent. So, this can be a very profitable option for you. 

Of course, you’ll need to factor in your vacancy rate, the cost of cleaning services, wear and tear, and more. However, as long as you manage your property well it can bring in much more income than a long-term rental. 

The key is to find the sweet spot when you are setting your nightly rate. Make sure that it’s high enough so you make a profit, yet low enough so that your property is regularly booked. You might have to adjust it a few times until you find the right rate. 

You can also justify charging a higher rate for your rental by adding some features and extras that make the stay more enjoyable for your guests. For example, adding a breakfast station with fruit, cereal, coffee and more, or perhaps a free bike rental, will make guests rave about your property. 

Vacation Rental Marketplaces Make It Easier To Find Renters

Tourism has been growing worldwide and the trend is towards vacation rentals because they offer so much more flexibility and freedom than a hotel. Online booking services have allowed the opportunity to present a wider selection at varied prices to customers. 

Platforms such as Airbnb, HomeAway, and VRBO make it easy for you to book and advertise your short-term rental property. Airbnb is the largest and it has more than six million listings

This means that you can set up a profile and start marketing your vacation rental within minutes. Vacation homeowners are using marketing techniques such as professional photography, SEO, and videos to market their properties. There are even consultancies out there who will show you how to market your property so you can showcase it in the best possible light. 

How will you invest in vacation rentals?

Vacation rentals have been becoming more and more profitable year on year, so now is a great time to invest in international property. There is still plenty of money to be made in this rapidly growing industry – especially if you can market your property effectively. Be sure to look at different options carefully and take your time choosing the right vacation rental property for you. 

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