Vacation rentals a booming side hustle among young homeowners

The hospitality sector has changed radically over the last decade. Companies like Airbnb and Vrbo completely shook up the landscape and created an opportunity for short-term and vacation rentals. A recent report shows that an unprecedented number of young people are trying their hand at the business.

A report done by Evolve, a Denver-based vacation-rental property management firm, sheds light on a demographic shift over the last two years. From June 2019 to June 2021, the number of percentage of the homeowners (i.e. vacation-rental landlords) under the age of 30 grew by 100%. In the same period, the percentage of homeowners between the ages of 31 and 56 grew by 17%, while the number of homeowners between 57 and 75 decreased.

The Wall Street Journal highlights the diverse range of young investors and investment opportunities. From condos in touristy towns like Palm Springs, California, and Fredericksburg, Texas to small and remote cabins to a 3,100 square foot castle in Gatlinburg, Tennessee, there are plenty of directions to go with this sort of investment. Most of these up and coming landlords list their properties on short-term rental platforms like Airbnb. Ideally, the properties can generate passive income and gradually pay for themselves.

Ideally. There are plenty of hurdles as well. For younger investors in particular there is often the initial problem of securing a mortgage when you’re still working on paying off student loans and have a low credit score. There is also additional red tape, generally, when securing a loan for an investment property.

Then there’s upkeep. Difficult guests and the general wear and tear of owning a home can definitely add up costs over time, although there are property managers out there who can help handle those issues. The rollercoaster real estate market of the last year has also doubtless been a source of immense stress, although it has by no means deterred everybody.

A further complicating factor is the growing, and often quite intense, local pushback against short-term rental properties. For years, local governments, especially in tourism hotspots, have passed legislation restricting vacation rentals or hitting them with high taxes.

Those caveats aside, the booming interest in this sector, especially among young investors and entrepreneurs, is encouraging.

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