The rental housing industry has been hit hard like any other industry during the COVID-19 pandemic. Phoenix homeowners utilizing Airbnb and VBRO are experiencing a wave of cancellations due to stay-at-home orders, creating a significant loss of revenue during the busiest tourism months of the year. While vacation-home renters may be feeling the crunch, there is an alternative that could position them for long-term success despite market issues.
A recent report from Bloomberg says Phoenix is the fastest-growing city with year-over-year resident influx in the country. With so many incoming residents and limited housing options, people oftentimes rent an apartment until they can purchase a home. Short-term rentals provide new residents, individuals waiting out construction or renovations, and people with other in-between circumstances with a simple solution, and homeowners with a reliable income each month.
One important distinction is in the terms “vacation rental” and “short-term residential rental.” A vacation rental is considered less than 30 days and a short-term residential rental is more than 30 days and less than 12 months. The rental agreement is one key difference between the two options. With vacation rentals, the owner grants a license to a guest to use the property and can revoke the license if a guest is causing issues. With short-term residential rentals, the guest becomes a tenant and the host becomes a landlord. The Residential Landlord and Tenant Act governs landlord tenant issues, so if the tenant breaks the written lease certain procedures must be followed before a tenant can be evicted.
By providing renting options from one through 11 months, homeowners will find fewer “weekend warriors” who may disrupt normally calm neighborhoods with noise, parties, or rude or drunken behavior, and more renters looking for stability while finding a home.
Rather than letting them sit vacant, utilizing second and seasonal homes could be what stabilizes the rental market during and after the coronavirus pandemic. Vacancy has a direct effect on rental income, so the longer the property is empty the less valuable it becomes. Homeowners can even utilize a real estate brokerage that can provide lease agreement contracts, vet tenants and even serve evictions if needed. This provides a hands-off solution for seasonal homeowners while they are out of town. Pivoting from vacation rentals to short-term residential rentals is a simple transition that could make a huge difference in the Phoenix rental market.
Nick Calvi is the founder and CEO of Tweener Homes, the first technology-based real estate brokerage dedicated to people searching for a comfortable, fully furnished home that can be rented on a monthly basis.