PHOENIX — Phoenix’s popularity as a vacation destination has fueled the market for investment properties, based on a recent Wall Street Journal Report.
The popularity has spawned a new trend across the Valley, where people are buying properties and turning them into vacation rentals. One real estate expert says that, while the trends favor investors, the purchases will inevitably tighten the already existing housing shortage.
Valley real estate agents are seeing a rise in people buying luxury homes to list on vacation rental sites like Airbnb. Some of the rentals are going for more than a thousand dollars a night.
Mark Stapp, director of real estate programs at ASU’s W.P. Carey School of Business, said that people were not able to get into the lodging or rental business if they just owned one or two houses.
But, new tools and technology have opened up the game to everyday people. The simplicity of booking an extended-stay vacation in a house, not a hotel, from your phone has changed the lodging sector.
“An entire industry is beginning to evolve around this,” Stapp said. “[Phoenix is] a resort destination community anyway. We have amenities that support a desire for people to be here and you have now more options.”
At first, people were renting out their homes using apps like Airbnb and VRBO. Then, investors started buying homes and putting them on the apps. Now, the big hospitality companies are getting in on the game, offering services to those who own properties for short-term rental.
Stapp said he can see the benefits for investors, but says the new trend is magnifying the current housing shortage in Phoenix.
“I don’t think it’s creating a critical situation, but I think it does exacerbate the current inventory shortage,” he said. “It’s a good business model when you have the right property."
Only time will tell just how much this new industry, where the hospitality world crosses over into the real estate market, takes off.
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