Greetings from Vancouver… (that’s Canada, eh)!
On my drive up here to my home-away-from-home for the week, I got to thinking how often we’ve been helping people invest in their property for added income. More and more Portland homeowners and buyers are getting in on the scene to rent out all or part of their house as a vacation rental. Yep, vacation rental.
No surprise there are TONS of people who want to vacation in Portland. We’re a cool destination for sure. Many of us first came here simply as travelers then packed up and moved for the awesome lifestyle that only Portland can offer. It stands to reason others do the same. Trends also show visitors prefer vacationing in a private home over a hotel. So in lies the reason services like Airbnb have exploded.
Think about it from a business perspective. The supply for lodging and rental units in Portland barely keeps up with demand. A quick search on Airbnb today reveals over a thousand listings of available homes and rooms for rent in our metro area. Prices range from $20 a night to over $700 a night. Of course the range of accommodations is huge–from tiny homes and urban tree houses to large estates and event spaces. On VRBO (Vacation Rentals By Owner) there are over 400 listings with weekly rates easily averaging over $1,000. Craigslist too has numerous vacation rentals around Portland and throughout the state. If you’ve got extra space to spare, why not put it out there?
Compare the revenue of owning a vacation rental to a more typical, long-term rental. Revenue can be as much as 40% higher but keep in mind, this increased revenue is offset to a degree by added expenses for utilities, furnishings, and marketing. If you list with a service like Airbnb, you’re charged a 3% service fee when the reservation is confirmed (check out Airbnb’s host page for a revenue calculator).
Then there’s the ADU scene (Accessory Dwelling Unit). Predictions estimate our population to increase by 700,000 people before 2040. To absorb the growth, more Portlanders are building an ADU on their property to rent out…long-term or vacation. You choose. (Read more in our previous blog.)
The chief consideration when thinking about profiting in the vacation rental game is the “cost” of vacancy. Depending what you’ve got (type of property and average rental price) and how seasonal your space is, vacancy rates could be 25%. Would you *enjoy* meeting new people and hosting travelers in your private home? Good question. It’s not for everybody. So be sure to factor in your time to manage the space in relation to the fun of playing concierge.
Care to give it a shot? Give us call. We’ve helped more than a handful of folks buy property that’s perfect for renting out or to be your own urban retreat.
The Portland Home Team are Portland natives who love their home town and know the market better than anyone. Trust them to help you find your dream Portland home!
– Portland Home Team: Experience. Excellence.