Short-Term Rentals…A Hedge Against Inflation

With the Federal Reserve and Congress cranking out cash and gas prices on the rise, we are likely entering a period of massive inflation. How do investors hedge against inflation? One way is to invest in assets, like rental properties, that appreciate in value. Rental rates also typically increase alongside inflation. The problem with long-term rentals, however, is that it can take 12 months (or longer) for rental rates to reset. Once a tenant signs a lease, you can’t increase the rent until the end of the lease, and even then, there are often caps on how much you can increase rent on an existing tenant.

In contrast, prices on short-term rentals can literally adjust overnight. In our company, we tweak prices every day, both manually and through our smart pricing algorithms. If we need to drop rates temporarily to compensate for a temporary lag in demand, we haven’t locked ourselves into those rates for a full year. If things pick back up in a week or a month, we can boost prices back-up. This flexibility gives us a reliable revenue stream, but one that is instantly responsive to inflationary changes.

If you want to learn more about short-term rentals, feel free to reach out to us at info@patriotfamilyhomes.com. Whether you are a seasoned investor looking to convert your existing portfolio to short-term rentals, or a beginner looking to dip your toes into the short-term space, we would love to help. If you are in a multi-family or manufactured housing space, short-term rentals could still be a great option for your properties. In fact, we find multi-family and manufactured housing often perform as well, or better, than single-family homes.

DISCLAIMER: We are not a licensed real estate agents, so we can’t advise you on individual real estate investments. We advise you to always consult with an experienced agent in your local area. If you would like, we can connect you with an agent in one of the 20 markets where we operate. If you already have an agent, we are always happy to work with them in finding and underwriting short-term rentals in your area. After you buy a property, we can help you maximize revenue through effective marketing, pricing, and management.