For more crisp and insightful business and economic news, subscribe to The Daily Upside newsletter. It's completely free and we guarantee you'll learn something new every day.
Vacations aren't what they used to be. Nowadays, stay-at-home workers with no limits on how far they can be from the office have nothing stopping them from taking a vacation while working.
Most vacation homes– where traveling remote workers often set up shop– are owned by individuals looking to pad their income by renting their property on sites like Airbnb. But it's hard to keep Wall Street out of a moneymaking enterprise. On Tuesday, New York investment firm Saluda Grade announced a new venture with short-term rental operator AvantStay to buy $500 million in homes to rent out.
The days of Clark Griswold loading up the station wagon and taking the family on a cross-country trip to a closed amusement park are over. Thanks to short-term rental services such as Airbnb, more and more travelers are foregoing hotels to rent a home on the lake, in the mountains, or near Wally World– even if it's just for a brief change of pace:
- In the summer of 2021, 28% of rental travelers stayed at a short-term rental for the first time, and by the time the holidays rolled around, that number rose to 43%, according to Deloitte.
- It might not be just a COVID boom: Three out of four new rental travelers said they would continue to use short-term rentals with amenities and wifi at locations near popular attractions, even after the pandemic wanes.
WeRent: Other big-name Wall Street investors could also be playing the game. Earlier this year, controversial WeWork founder Adam Neumann bought majority stakes in more than 4,000 apartments valued at more than $1 billion in Miami, Atlanta, Nashville, Fort Lauderdale, and other U.S. cities, and could use those flats to create a WeWork for the rental market.
Regulations Risk: Short-term rentals are often more lucrative than long-term leases, but renting an apartment to travelers instead of a family can be illegal in some cities. Local governments in New York, Boston, and Santa Monica have approved bills that require hosts to register with the city before renting out their homes on a short-term basis. More stringent policies could be on the way.