The Pros and Cons of Short-Term Rentals

 

Here’s why you should consider investing in short-term rentals.

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Should you buy a short-term rental property? Airbnbs and VRBOs are becoming increasingly popular investment choices. That’s why today I want to discuss their pros, cons, and if they make sense for you.

An article from the National Association of Realtors says that short-term rentals have surged among remote, hybrid workers. In 2021, half the properties on Airbnb’s short-term rental platform were booked for at least seven days. From what we can tell, remote workers are taking ‘work-cations.’ Since they can work from anywhere, they’ll book an Airbnb by the beach or in the mountains for a week without taking any time off. On top of that, one of every five bookings at a short-term rental was for 28 days or longer. 

“Short-term rentals are becoming more and more popular."

Based on this new data, it seems like owning a short-term rental could be a great use of your investment dollars. However, owning an Airbnb or VRBO is a little different. It’s easiest to pay in cash, but if you need financing, you might have to put down 25% or 30%. You should also consider that managing a short-term rental requires a greater time investment. If someone leaves every month or week, you need to be ready to clean and market the home regularly. 

Short-term rentals are a little more high-maintenance, but the rewards could be great. They become more popular every month, and the sooner you get in, the more potential your investment has. 

If you have any questions about short-term rentals, please call or email my team. We’d love to share where the best opportunities in our area are! 

The Latest Numbers From Our Housing Market

 

The numbers from last year’s market and what they mean for 2022.

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It’s time to look back and recap last year’s market. You’re in luck today because we are talking about stats; I can tell that you’re excited. Let’s talk about the numbers from last year, how they apply to you, and what they mean for our market looking forward.

If you were around in the housing market in 2006, you remember how crazy it was. Well, 2021 was almost the same. It was short a few thousand homes sold, coming in at a little over six million homes. That’s in a year of supposedly low inventory! 

Because of people's perspectives on the availability of homes, prices went up. In December, we saw things slow down a little bit, but the market still stayed relatively strong. The median home price nationwide was $358,000 at the end of last year, which was up around 16% from December 2020. The bottom line is that house prices are still going up. People built up a lot of equity last year, especially compared to more normal markets where we only see 3% to 4% appreciation. 

“You definitely get your money’s worth when you pay for an agent."

Total housing inventory is way down, but keep in mind that it’s not that there aren’t houses for sale. There is a ton of demand, so homes sell quickly and don't stay on the market very long.

Almost 80% of the homes sold this past December were on the market for only about a month. The average was 19 days on the market, which is really fast. First-time homebuyers were about a third of the market. That is up from the year before, so it’s good to know that those first-time buyers are getting a chance. About 17% of homes were purchased with cash, which could be investors in our market. 

If you look at the South, existing-home sales slowed down in December, but our median home price stayed at $323,000. It’s a little bit of a decrease, but there was still a lot of growth over the past few years. We’re also seeing a lot of growth because people are moving into our region right now.

If you’re looking to sell your home, you could never find a better time to do so. If you don’t know where you would go after you sell, there are more opportunities to buy right now than there have been in a long time. 2022 is your year to make this happen; you can sell at the peak price and buy while rates are still low. 

If you want to take advantage of this opportunity, you need to give me or my team a call now at 423-593-5588. We’d be glad to walk you through the whole process. 

What Sellers Have To Pay at Closing

 

Here are most of the costs you’ll have to pay when you sell your house.

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What does it really cost to sell your home? If you’re thinking about selling your home, you may be asking yourself that. So what are the typical closing costs for a seller?

You’ll usually have to pay a title insurance company to perform the closing. They’ll draw up the deed, write a new one, and move money around during the process. You’ll also be charged your share of property taxes from the first of the year to the closing date. 

If you’re in an HOA, you may have some prorated costs due as well. Sometimes, you may be asked to pay some fees on the buyer's behalf, such as their closing costs. Of course, you also have to pay off the remainder of your mortgage.

“You definitely get your money’s worth when you pay for an agent."

If you’re working with an agent, you’ll also have to pay their commission as well. Some people decide not to work with a Realtor because they want to save money, but interestingly enough, most sellers who sell their homes on their own only get 89% to 91% of the asking price. 

Selling by yourself can mean anywhere from an 8% to 10% discount on the asking price, so if you’re paying an agent a 5% commission, you’re still coming out ahead. Agents have a much better track record of getting the full price. Not to mention that we bring professional marketing, photos, and a better knowledge of how to price your home to the table. 

We might even be able to get more for your house than you thought you could; this past week, we sold a property for $15,000 more than what the seller thought they could get. You definitely get your money’s worth when you pay for an agent. 

I’d love to send you a list of all your closing costs as a seller. Just email me at charlotte@charlottemabryteam.com. I can even give you a breakdown specific to your home if you send me your property address. If you have any questions, feel free to call me as well.