Short Term Rental Economics

On today’s show we are looking at short term rentals to see what market conditions are best suited to this product type. 

In addition, some critics are zeroing in on a legal gray zone in the world of residential tenancies, short term rentals, hotel stays, and medium term rentals. 

The world of short term rentals has been suffering a growth in supply and a fall in occupancy in some major metros. Phoenix and Las Vegas are among those cities that have suffered the most.  

But any market follows the laws of supply and demand. The bright spots are those cities where constraints on supply are being imposed through regulation. Without constraints on supply, the sharing economy will continue to attract new entrants until the revenue falls to a level of tolerable pain and nobody is making any money. The classic example is that there is no constraint on adding another vehicle to the fleet of Uber drivers. Supply can grow unconstrained. 

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Host: Victor Menasce

email: [email protected]