The Most Profitable Types Of Short-Term Rental Properties

Real Estate BY Abdul Aziz May 05, 2023

Short-term rental properties are increasingly becoming a popular investment option for many people. Investors are now putting their money into rental property investment because it can be lucrative and can let them earn passive income.

The advent of platforms like Airbnb and Vrbo has significantly increased the potential to generate passive real estate income. Nevertheless, not all short-term rental properties are created equal. Some generate more income than others based on their type, location, and other factors.

Investing in a vacation rental property is one thing; choosing the right property is another. In this guide, we will walk you through some of the most profitable types of short-term rental properties to boost your passive real estate income.

The Most Profitable Short-Term Rental Properties

If you are ready to start your real estate journey, there are many things to consider. You should not just buy a property because it is within your budget. You need to consider if it can generate income and if it is in a good location.

Here are some types of properties that  you can turn into short-term rentals to generate income:

City Apartments

City Apartments

City apartments are one of the most popular and lucrative short-term rental properties. Such properties are mainly found in urban areas like business districts or downtown. These places cater to travelers looking for affordable and comfortable places to stay. Depending on the target market and location, city apartments often range from studio to multi-bedroom apartments.

  • Equipped and furnished with modern accessories, such as kitchen facilities, cable TV, high-speed internet, etc.
  • City apartments are less expensive than hotels, which is why they are the ideal option for budget-conscience travelers.
  • City apartments also have a high occupancy rate, which is why many investors are attracted to them.
  • You can make a lot of money from this rental property investment during peak seasons or major events like festivals or conferences.

This type of real estate property is highly lucrative in places with high demand, like major business hubs and tourist destinations. They can also be an excellent option for people looking for a hands-off investment, as proper management and investment companies like Techvestor can handle most of the everyday operations.

Vacation Homes

Vacation homes are also popular types of properties that are rented out for a short period. Many investors buy a vacation rental property because of how profitable it can be. These types of properties are created and marketed for people who go on vacations. You will find them mainly in popular tourist or attraction centers.

  • Depending on the target market and location, vacation homes often range from luxurious villas to comfortable cottages.
  • Investing in vacation rental property is highly beneficial because it commands a higher rental rate than traditional long-term rentals.

Vacationers and tourists are always willing to spend a lot of money for the experience of staying in a fully-furnished, unique property that offers all the amenities and accessories they need for an enjoyable, comfortable stay.

  • Vacation homes are highly lucrative in areas with high demand, such as theme park destinations, ski resorts, and beachfront locations.
  • The occupancy rate of vacation properties is also very high during peak seasons, allowing rental property owners to generate more income during these periods.

Condominiums

Condominiums

The list of most profitable types of short-term rental properties is not complete without mentioning condominiums. Condominiums are housing units in a large complex. The units are owned by individuals and rented out to travelers. They range from high-end luxury apartments to budget-friendly units, depending on the target market and location.

  • The upside of such properties is that they offer a lower entry cost than other short-term rental properties.
  • Their low entry costs make them an excellent option for first-time investors.
  • These properties also offer many amenities, such as fitness centers, swimming pools, and nearby restaurants.

Condominiums are highly lucrative in places with high demand, such as popular tourist destinations or beachfront locations. Like city apartments, condominiums can also be handed over to proper management companies to handle daily operations.

Single Family Homes

Do you know you can make money off your single-family home? These rental properties are not very common but are highly profitable.

  • Such properties are often bigger than vacation homes. You will find them mainly in residential areas instead of tourist destinations.
  • They offer a higher rental rate than long-term rental properties. Many homeowners use such properties to generate significant income.
  • Single-family homes appeal to different types of travelers, such as friends or families looking for a more comfortable and private experience.
  • Single-family homes are more profitable in high-demand areas like major cities or college towns.

If you have a family home in such areas that is currently not in use, you can make an additional income by renting it out for the short term. However, such properties require more attention and maintenance than other rental properties, so you might want to consider that. In addition, short-term rental regulations might vary depending on the property type and location.

  • It is essential to do your findings about local laws and regulations before investing in single-family homes for short-term rentals.

Tiny Homes

Tiny homes have become the latest type of short-term rental property. These properties are increasingly gaining popularity because of how lucrative they are.

  • They are compact, small houses of less than 500 sq. ft. in size. They are also designed to be modular or mobile.
  • They offer an eco-friendly and unique experience for travelers looking for something different.
  • Tiny homes are mainly found in secluded and natural locations like mountains or forests. People also love them because they offer a sustainable and minimalist lifestyle. Tiny homes are more lucrative in places with high demand for outdoor recreation or eco-tourism, such as hiking trails and national parks. Investing in tiny homes for short-term rentals has lower upfront and ongoing costs than other short-term rental properties.
  • Familiarize yourself with regulations around tiny homes in your area before venturing into it. These properties might require additional upkeep and maintenance because of their unique materials and design.

Conclusion

Getting into short-term rental property investing can be highly profitable when you know the right types of properties to invest in. It is crucial to consider the property type and location before investing. Vacation homes, condominiums, city apartments, single-family homes, and tiny homes are profitable short-term rental properties. You can also work with experts in the industry to point you in the right direction and make passive income from your investment.

Additionals:

Abdul Aziz Mondol is a professional blogger who is having a colossal interest in writing blogs and other jones of calligraphies. In terms of his professional commitments, he loves to share content related to business, finance, technology, and the gaming niche.

View All Post

Leave A Reply

Your email address will not be published. Required fields are marked *

You May Also Like