Posted in Builders
Short-Term Rental Trends Affect Housing and Renovation Availability and Affordability
The rising popularity of short-term rental services from popular sites like Airbnb, VRBO and HomeAway are increasingly impacting the housing, real estate and renovation industry. As many homeowners open their homes to guests for a small (or large) fee, some economic experts expect that we will soon see an availability and affordability crisis.
However, the polarizing Airbnb trend presents new opportunities for contractors and remodelers. With an increased number of homeowners turning to Airbnb and HomeAway as a way to bring additional revenue, we can expect them to turn to contractors and remodelers to create private entries, home additions, and even build outdoor sheds to provide a comfortable place for renters to crash.
Here are some of the top implications to look out for as more adventurous travelers seek an alternative to traditional hospitality:
- An increase in home prices and rental rates. The Wall Street Journal recently reported that the popularity of short-term rental services could result in a continued increase in home prices and rental rates. In the article, researchers said they reviewed rental rates and home prices in the largest U.S. metro areas. From 2012 to 2016, they found that a 10% increase in Airbnb listings lead to a 0.39% increase in rent and a 0.64% increase in house prices.
- Decrease in neighboring property values. If you are a builder or remodeler seeking to renovate a home next to a popular short-term rental, the implications could result in lowering your return on investment as buyers are less interested in living next to a “party house.”
- New rental legislation. With more and more travelers choosing short-term rentals over hotels, the traditional hospitality industry is seeing a decrease in revenue. This decrease in revenue has led large cities like New York City and New Orleans to ban short-term home rentals of less than 30 days in certain areas. As cities seek to regulate short-term rentals and create positive revenue streams, we can expect to see more cities presenting new legislation.
At LP, we strive to offer building solutions, like LP® Outdoor Building Solutions®,LP® SmartSide® Trim & Siding, among other products, that make it easy for your company to help clients renovate and redesign a home—whether it be for themselves or for a short-term rental property. We want to hear from you. Visit our Facebook or LinkedIn page to share how the short-term rental industry is impacting your business.
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