Young adults are showing lots of enthusiasm for vacation rental ownership. Indeed, the interest is so strong that even with limited credit histories and little saved for a down payment, many are still able to find loopholes to make what they believe will be a very lucrative investment.
The proportion of homeowners under age 30 who purchased a vacation property doubled between June 2019 and June 2021, according to Evolve, a vacation-rental management and hospitality firm, which has properties bookable on its website as do Airbnb, Booking.com, and Vrbo.
That percentage is significantly higher than the 17% growth during that period among homeowners between 31 to 56 or the 11% decrease among those ages 57 to 75.
“This is quite clearly a growing segment,” Evolve co-founder and Chief Executive Brian Egan told The Wall Street Journal.
One youthful investor is 27-year old Zack North who told the Journal that he and a friend snapped up a 2,000 square foot, four bedroom vacation rental home outside of Asheville, North Carolina, for more than $200,000.
“I believe real estate is the safest and most sustainable way to grow wealth,” North told the Journal. He began renting out the home the first week the outbreak struck the U.S. last year.”
Younger adults, it seems, have a keen eye for the hot housing market and the demand for short-term rental in particular, and are looking to take advantage of it.
“Young people I’m working with are tired of the norm,” said Jeramie Worley, managing broker at Worley & Associates, a real estate firm in Branson, Mo. “There were no jobs when millennials came into the working world. They’ve been forced to find a better way to make a living. Vacation rentals give people that without the fear and anxiety of losing their jobs.”
The idea of owning a second home for rental purposes has been made even more attractive by the rise of online booking websites such as Airbnb. Taylor Marr, lead economist at Redfin, told the Journal that in the past people would buy a lakeside cabin and use it maybe one month each year, and then stay vacant for the rest of the year. Nowadays, those kinds of properties don’t have to stay empty.
“These portals have lowered the functional cost of the vacation home,” Marr said. “You can rent it out to offset your cost.”
Other sites are also popping up to help with the financials of purchasing one and maintaining it. For example, AirDNA crunches data on more than 10 million short-term vacation rentals to help homeowners determine the potential revenue. Other companies like Evolve can handle the rental listing and photography, pricing booking rates nightly, and offers 24/7 guest support.