In many markets, we are seeing drops in revenue of properties that are missing one of the 4 key categories that drive revenue for short term rentals: Location, Quality, Design and Décor, and Amenities. If the property is lacking in one of those four categories, the chances of it performing as it did in the last 12 months, or as it did in 2021 are very slim.
How to find deals that make sense
1. Location
You can always update the furnishings of a property but you can’t change the view. Properties in the best location always get booked first.
2. (Understanding the) Competition
Determine if the property you are evaluating has what it needs to compete with the best in the market. Not every property is struggling or taking a hit to revenue this year. It’s the average property that I am seeing.The top performers are doing well and some are doing better year over year. You need to ask yourself, can this property be a top property?
3. Run revenue on a range
Never run your revenue projections on a best case scenario. Always run it off of a worst case, average case, and best case model. Don’t take on the risk by running one projection. Factor in a decrease of 10%-15% difference in the trailing 12 numbers. If the numbers still work at that cut then move forward with further evaluation.
What do the numbers mean?
Now that we’re officially halfway through the year, Orlando’s housing market remains strong. June’s housing data is a strong indication of what the rest of the year will look like – we can expect to continue to see more inventory and great prices for homes, which is good news for buyers and sellers.
More Stats This Month…
New Listings increased by 1% month over month but are down by 24% when compared to last year, while Active Listings inventory increased from the previous month and is up 12% year over year.
The number of units sold decreased from the previous month by 3% and have declined by 7% year over year. Inventory increased for the same time frame.
Total Sales Volume decreased by 2% month over month and declined by 6% year over year.
Average Days on Market declined month over month but has nearly tripled since last year. Inventory increased since last year.