We never thought about investing in short-term rentals for different reasons. The first reason was that they have to be actively managed (which we do not want to do). If you don’t want to manage it, then you have to hire a good property manager and pay a hefty fee. The second reason is that it’s not diversified, as they are a single asset.
On the other hands, market industry reports show a steady growth of short-term rentals, especially after COVID-19 and working from home. See some short-term rentals market reports and vacation rentals growth trends.
Then, Why Invest in Short-Term Rentals?
As I have explained in this post regarding our use of real estate investments to achieve FIRE, we love real estate. And we like diversifying by investing in funds with different assets.
I can’t remember how we found out about reAlpha. What I do remember is reading about investing in many short-term rentals at once. That caught my eye because that’s an asset type we still don’t own and it would be a great addition to our portfolio.
The second thing that caught my attention is reAlpha’s goal of democratizing access to short-term rental investments to small investors. That was exactly what also landed me on the real estate crowdfunding sites years ago!
The final aspect that interested me was the concept of professionalizing the management of Airbnb properties. As current nomads staying in Airbnb apartments, one of our main concerns is always about the management. The property can be beautiful and well-appointed but if the host fails, the experience fails. This professionalization also means additional potential income streams and monetization opportunities.
How Have We Invested in reAlpha?
We usually do not invest in startups, but in this case, because it’s related to real estate and so innovative, we did! So far we have invested a small amount, $5,000. The investment is in equity, which means that we now own a little bit of the company.
Apart from being an investor, reAlpha is looking to make you a member of a community. As an investor you get perks as staying in the owned Airbnb’s so you can be proud of what you own! Isn’t that lovely?
In the future they will open up the investment as a syndication. This means that investors will be able to invest a minimal amount in individual properties and get cashflow from the short-term rental income. And all this will become passive income for you. reAlpha will manage all the properties and send you the check 🙂
So, why not expose yourself to potential huge growth? The minimum investment is $1,000 so you do not have to invest a large portion of your portfolio and can diversify it a little bit!