2022 has been a challenging year for most investors worldwide as stock and real estate prices have continued to fall endlessly. Amidst the market turmoil, we tested our Airbnb short let strategy in Q2, which has paid off well. We have made about 20% annualised returns, and we plan to double down on this strategy.
How does this work?
One of our most popular asset classes on Rise is Real Estate. We aggregate investments from our clients, which we use to purchase rental properties across the United States to generate returns for our clients through rental income and price appreciation when properties get sold.
As you may know, Airbnb is one of the largest online marketplaces for short-term rentals. As part of our real estate portfolio, we have decided to list some of our properties on Airbnb.
Why Airbnb?
Airbnb is a marketplace for people to list, discover and book accommodations around the world. Guests can book a private room, share a room, or even rent an entire place. After the stay, guests and hosts can leave reviews about the overall experience. This control maintains the authenticity of reviews – building trust in the community, which is the cornerstone of their business. The service is currently in 190 countries and 72,000 cities.
Airbnb tends to give higher returns than traditional rentals because Airbnb is the number one trusted platform for short-term rentals globally. Our first Airbnb has earned close to 20% annualised return, higher than typical rentals. It’s been fully booked since we listed it.
Our second Airbnb has just gone live and indicators are that it’s going to do extremely well too
Why now?
Despite falling house prices, rental demand is still solid, and travel and short-term rentals are still growing. In light of this, we expect this strategy will yield good returns in the near to medium term. However, if Airbnb traffic slows, we can switch to traditional rental.
Also, as house prices keep falling, we will purchase more at even steeper discounts to grow our portfolio and potential returns. It’s tough to call the market bottom in real-time, so instead of waiting for house prices to reach their lowest point, we plan to capitalise on this opportunity now.
There’s never a bad time to deploy capital into a good deal. We firmly believe this is a good deal.
Conclusion
Given the benefits of safety, stable returns and the expected growth over time, real estate has proven to be a favourite for people who want to balance risk and performance. Our real estate is the perfect fit for those who want stability, consistent returns and long-term outperformance. Start here.