Despite the slow reopening of workplaces nationwide, a new report by Redfin shows that demand for vacation homes– otherwise known as short-term rentals –is soaring at a record pace.
One reason for the rise in demand can be attributed to vacationers wanting to keep their distance from strangers in shared hotel spaces. Now, with the developing accessibility of the COVID-19 vaccines, more people are planning their future get-aways. A recent Vacasa review of U.S. vacationers revealed that 59% said they intend to vacation in spring 2021. Additionally, 52% said they would choose to stay in a vacation rental more regularly. A study by the National Association of Realtors also found a 16% increment in second-home purchases in 2020.
Rise in remote work
Another reason for the increased demand could also be due to more affluent families having more opportunities to do their jobs remotely for the foreseeable future. The increase in remote work for individuals in white-collar positions implies that families could leave urban cities and set up for business in more modest, remote towns.
Redfin chief economist Daryl Fairweather said, “The combination of the wealthy becoming wealthier, remote work turning into the new normal, and low mortgage rates is creating an ideal environment for affluent Americans to buy vacation homes,”
“As long as the economy continues to grow, I don’t foresee demand for second homes slowing down anytime soon,” she added.
Fortunes may have genuinely turned for the vacation home market since the start of the coronavirus crisis. But as a real estate investor, what does this mean for you?
From having a stable cash flow to obtaining tax benefits, investing in real estate can have several advantages. It’s also an excellent way to increase wealth over time. New investors can take advantage of this by getting in on this heightened interest for second homes being bought as vacation rentals.
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