The Short Term Rental Industry Is Booming BUT... | The STRR Podcast #100 | Tim Hubbard

I can't believe it. I really can't believe it. It's been a hundred episodes, almost two years of the Short Term Rental Riches podcast and so much has happened. A lot's happened. We're gonna break that down in a brief history this week. And if you're new to short term rentals, hopefully these changes over the last years get you really excited about the opportunity that lies ahead. Welcome to Short Term Rental Riches, where we'll discuss investing in real estate, but with a specific focus on short term rentals to help you build wealth faster with as little headache as possible.

We're here 100 episodes. I can't believe it. That's basically two years and oh my gosh, a lot has happened in the last two years. So we're going to break that down this week. This is essentially a history of the short term rental industry the last two years. Of course, not everything, but the most important pieces and some super important things have happened. But in the end, I'm very, very bullish on short term rentals, so. And real estate, of course. And so if you guys are new to this channel, well, stay tuned because we're going to uncover what's happened the last few years and why that has been poised the short term rental industry for some serious growth. So before I get started on this two years of history, I got to break down just the most important guiding principle that I've learned, and that is consistency. I talked about it on the 50th episode and now here we are another 50 episodes later. We've covered so much in this podcast, but I learned this principle early on from quite possibly my favorite book, at least Top five, and that is the Slight Edge by Jeff Olson. And he is all about consistency and that's how we get results. And I just feel obligated to review this really quickly again since we're already here. Another, another year has passed and so much has changed and things could have changed for the worse. They could have gotten better. And, and so these are some of the principles in the book. It's basically all the little actions that we take each day. They either add up into good results or bad results, while these little daily habits that we have don't have any real. There's no real visible difference on our life impact. But if you add all these little days up, well, boom, yes, there is. And it turns into really big things. John Dryden says we first make our habits and, and then our habits make us. So just a quick review on that. If you haven't read that book, please go read it. I swear it'll change your life. And it's so important in this real estate game because things don't happen overnight, right? They do take some time. So please check it out. At least check out a YouTube summary. Or you can go on Blinkist, which is a great app for summarizing books. You can check it out there. It will change your life, I promise, if you haven't read it already. So, okay, onto the history. Oh my gosh. A lot's happened in the last two years and I guess I'm just going to start with COVID And no, I'm not going to break down all the negative things that have come because of that. And it has been really hard for a lot of us. And depending on where we are in the world, it's been different for all of us. So I don't want to dwell on that side of it, but I do want to talk about the impacts that it's had on the short term rental industry. First of all, we've made it through what could easily be said is the, the most difficult time for travel in our lifetimes. Airlines shut down, hotels shut down, borders shut down. And yet short term rentals have prevailed. They've prevailed much better than most hotels. We talked about that in prior episodes. In fact, most everything that we're reviewing today we've talked about in prior episodes. So if you want the long version of some of these topics, make sure you go back and check out our history. You can check it out on strictures.com we've got them all laid out there for you really easily. So travel shut down. Right? But not exactly. It didn't exactly shut down for short term rentals. We were able to kind of escape under the radar from a lot of these restrictions that the hotels had. Right. It's much more difficult to regulate 5,000 independent property owners and in one city versus you know, maybe 300 large hotels. So we got the easy side of that. And a lot of people continue to stay in short term rentals. Of course, it depends on where you're at in the world, but we made it out of that. Okay. And I would say during this time, the visibility for short term rentals has grown exponentially. You know, it has, you know, it has, there's, there's so many different types of short term rentals now. And they're all over the world. They're in all types of cities. We have series on Netflix now, multiple series like Amazing Vacation Rentals, another one called Stay Here, another one Called Instant Hotel. We have an A N E channel called Vacation Rental Potential. We have famous musicians dropping the word Airbnb in their songs that are heard by hundreds and hundreds of millions of people all the time. So the visibility has grown. A lot of the people that were going to stay in hotels during everything that's been happening have opted to stay in short term rentals instead. So the visibility.

Has boomed and it's going to continue to boom. So we had the start of COVID Travel shut down. Airbnb bans parties in August of last year. Now this is an important point, not to scare you because of parties or anything like that, but it's important because of what we learned from it. We learned so much about the guests coming to our properties and along with that we created tons of tools, tons of new technology to better manage our guests, to make sure that we don't have parties and that our properties are protected as best as possible. We have tons and tons of options. Now I can tell you without a doubt that starting a short term rental today, if you don't already have one, is easier, much easier than it was two years ago and it's much easier than it was five years ago because of the tools and the technology that we have available. So we talk a lot about those tools on this channel and I just want to do a real brief recap of some of the ones that become more popular in the last two years. And a lot of those are around navigating our way through good or bad. Guess so. We have smoke detectors now that can monitor marijuana smoke. We have noise detectors, multiple options, one from minute, another one called Noise Aware that can monitor noise levels in our property. So if someone is having a party, well, boom, it can send us a notification, it can send a notification to the guest. We have countless, countless options for property management software. Now. I did a prior episode on why I switched from Guesty to Host Away, which I'm currently using. Because these things are developing so fast, it's so hard to keep track of all the new tools coming around. So we have tons of, of property management software. Of course. We have amazing tools for managing our pricing, for managing our guidebooks, for managing guest contracts. There is so much out there now. So that is another benefit. With the difficult times we've had, entrepreneurs have, have sprouted up and created solutions for us to handle a lot of these things. Also, smart home technology. Oh my gosh, there's so much, so much in that field now. Cameras, doorbells with cameras on them. You know, smart wi FI systems or wi fi systems that can reach really far distances now, streaming services. So there's so much. So we have way more technology than we did two years ago, that's for sure. Okay, so we had Covid. That certainly disrupted things. And it still is. We had travel basically shutting down for a lot of the world, but not as much for a lot of short term rentals, especially if you're outside of a city or you were in a more remote area. Those did even better. We have Airbnb banning parties and setting limits on the max amount of guests that can stay in a property. And then we have Airbnb going public. What a big change that is, right? They were valued at the time they went public in December of 2020.

They were valued at over $100 billion. A hundred billion dollars. And that was at $160 a share. Their current share price as of the recording of as of today's date is higher than that. So they are a super, super valuable company and with good reason. Right? Millions and millions and millions of people are staying in Airbnbs all around the world. Things have changed, right? This, this is the future for a lot of rental. So really excited about that. But along with this giant valuation, something else happened. We're attracting institutional money. So large hedge funds are coming into the picture. Developers are building properties now designed for short term rentals because they've realized that millennials and a lot of the population are more mobile than we've ever been. We're working remotely, we can stay in places longer. And so we are catering to that. So short term rentals and Airbnb helps complete that picture. We're providing spaces for people to live in now on a short term basis. Brian Chesky said in one of his recent quarterly reports that people are not just traveling on Airbnb, they are living on Airbnb. And that is the absolute truth. So a few more changes. Yes, we're attracting institutional money now because the rent renter demographic has changed and the ownership demographic has changed. We did a podcast recently about how the home ownership rate in the U.S. nASA, specific to the U.S. has dropped several percent. That means millions and millions more people that may have been homeowners are now renters. So rents are going up nationwide. They've gone up over 10% year over year, some cities as high as 30%. So we have all these changes that affected the short term rental industry. But we have this underlying change as a real estate investor that is super good for us as investors because rents are going up and if rents are going up, of course we want to be in the right market, and we have plenty of podcasts on that. But if we're in the right market, rents are going up, and that means your short term rents are going up as well. Now, a few other changes. In the last few years, we've had a lot of pushback from cities fighting municipalities trying to ban short term rentals. We have states now that are opening up and saying, you cannot ban short term rentals in this whole state. Yes, you can regulate it in your city, but there's states like Arizona, Indiana, Tennessee that have passed statewide laws banning the banning of short term rentals. I know that sounds weird, but they want to see short term rentals. It's good for a lot of cities. It brings in tons of tax revenue. Airbnb has partnered with tons and tons of cities across the nation and the world to automatically collect taxes on behalf of these cities. So the cities are making a lot of tax money from short term rentals. So those are some of the big changes we had. Covid, of course, disrupted things a ton. Pretty much shut down travel, but not necessarily for short term rentals. We have all this new technology that's been developed over the last two years. We have Airbnb going public and attracting institutional money. We have Netflix series popping up left and right to talk about vacation rentals. We have YouTube channels focused on tiny homes. And we have musicians dropping Airbnb and their lyrics. And we have more people working remotely than we've ever had. And we have more renters in the US anyways than we've ever had. So it's a good time to be a real estate investor. It's a really exciting time to be involved with short term rentals if you're not already. Hopefully some of these things excite you about the short term rental world. Now, one last thing before we go with this brief history is that we printed a lot of money. We printed a lot, a lot of money during COVID to help us bail out all these things. And what happens when we print a lot of money? Well, inflation, it's estimated, I've heard multiple different estimates. But in the last two years, with the trillions of dollars that we've printed, we've increased the money supply in the US as much as 30% just in the last two years. The whole money supply that's circulating, the economy of the US we've printed in the last two years. So what happens when all this money enters the market? Well, if. Let's just say we Have a can of soda, for example, and it's a dollar and there's a trillion dollars in the market. And then all of a sudden that trillion dollars becomes $2 trillion, but there's still only one can of soda. Well, then people are going to be willing to pay twice as much for that can of soda if they want it. Right? That's how inflation works. And so by owning real estate and by borrowing at fixed rates, which are at historical lows, we can circumvent some of that inflation. We can fight that inflation by owning fixed assets. Because if we're borrowing money today at 3, 4, 5% fixed for 30 years and money is devaluing by X percent a year, that's inflation. That's another way of saying inflation is that the value of our money is decreasing. The government likes to say it's, you know, a few percent, 3, 4%. But it's very realistic that it could be as high as like 10%. Which means if you have $100,000 in your savings account and one year goes by and there's a 10% inflation rate, well, at the end of that year, your hundred thousand is only worth $90,000. So if we can borrow money today with historically low interest rates, fix that. For a very long time, we're essentially paying back our loans with cheaper dollars. I hope that makes sense. If it doesn't make sense, just remember you're not even paying that loan back anyways. Right? Your guests are or your tenants are. So a lot has happened in the last two years and things are faster than ever. But one thing is certain, and that is that short term rentals are not going away. They are the future. I'm super bullish. I hope you've already gotten started in short term rentals. If you haven't, I hope this podcast has been valuable for you. I try to give you actionable advice like I have tried since day one a hundred episodes ago. So I really appreciate you listening and we've, it's, it's awesome to see all the feedback we've got. If you haven't yet left us a review, I'd really, really appreciate it. It helps us grow, helps us get more content out. So until next time, I hope you have a wonderful day and I really look forward to our next hundred episodes together. Cheers.

Sam.