Читать книгу Buying Real Estate Overseas For Cash Flow (And A Better Life) - Kathleen Peddicord - Страница 10

Short-term rentals are a key element of any global property portfolio, a top choice for generating diversified cash flow overseas. What's the post-COVID-19 picture for this asset class?

The vacation rental business disappeared overnight when borders closed and planes stopped flying. Hotels are being converted to hospitals in some countries, and short-term rentals are being relisted as long term. That's one benefit of owning a furnished rental. You can reposition it according to market demand. In Dublin, Ireland, for example, the available inventory of long-term rentals jumped 83% in March 2020 compared with March 2019, while short-term rental listings on Airbnb fell accordingly.

Since the advent of Airbnb, many cities have seen sharp declines in long-term rental supply, increasing the cost of housing for locals. In an active tourist destination, a short-term rental can produce a much higher net yield than one rented long term. Now we're going to see a dramatic shift, which is good news for locals looking for affordable housing but not necessarily for global property investors. However, we believe this is a temporary trend and will revert as tourist markets are reborn.

You can easily switch a rental from short to long term in a European city, but making a change like that won't get you far in a resort town like Playa del Carmen, Mexico, where's there's next to zero long-term rental demand. Expect, therefore, to see hugely discounted vacation rental prices in destinations like Playa del Carmen when people begin traveling again. Also expect to see properties for sale at discounted prices from owners who either need to sell their investment real estate to shore up their personal financial situations back home or because an extended loss of cash flow has put them behind on their mortgage payments. As we remind our Live and Invest Overseas readers often, leverage is a double-edged sword.