The Covid-19 pandemic and the emergence of short-term rental companies like Airbnb have given birth to a new breed of real estate. This fresh wave blurs the demarcation between hotels and homes, sparking developments designed from the ground up to serve dual purposes. On one hand, they meet the need for buyers seeking a getaway place in a sunny clime like Miami’s. On the other, they satisfy the desire of these and others to generate passive income by renting out the residences when they’re not there.
Among companies making a mark on the short-term rental market is WhyHotel, an alternative hospitality service provider that creates pop-up hotels in places like Miami. Company CEO and founder Jason Fudin calls the work-from-anywhere movement one of the most significant forces impacting real estate uses in a generation.
“We have seen the beginning effects first-hand with increased demand for short-term stay accommodations,” Fudin says. “Our apartment-style hotels have significantly outperformed traditional hotels during Covid, primarily driven by strong occupancy of 85%-plus throughout the heart of the pandemic.
“Consumers demand short-term accommodations that blend home and hospitality, especially as work-from-anywhere continues. For example, people travel for work and stay for fun, especially in Miami, New York and Nashville. And they are looking for apartment-style comforts plus hospitality-like services to support that lifestyle.”
Passive income
Flexible living lets residents have their cake while eating it too, says Nicholas Perez, vice president of Related Group, developer of District 225 Residences Miami, and The Crosby Miami Worldcenter. Many buyers at District 225 Residences Miami and The Crosby Miami Worldcenter arrived in the Magic City seeking an escape from winter and-or high tax states. They enjoy their residences while in Miami, but also relish the passive income cranked out by the units when they travel home to visit family.
“We’ve also seen many locals, especially a new generation of young, upwardly mobile professionals, as well as international buyers, jumping at the opportunity to own property in one of Miami’s fastest growing neighborhoods: Downtown Miami,” Perez says. “Some will opt to live in their units most of the time, like their Northeastern counterparts, while others are looking at this as more of an opportunity to get into the booming short-term rental business with none of the challenges that come with independently managing these types of assets.”
Clear demand
Folks who were highly mobile before the pandemic have become even more nomadic in its wake, adds Harvey Hernandez, CEO of Newgard Development Group, developer of LOFTY Brickell and Natiivo Miami and Austin. Remote work roles have also prompted mobility, and that’s triggered a feeling of unprecedented freedom to test out new and different lifestyles and cities, he adds. “This freedom provides buyers the unique opportunity to have their assets work for them when they want and as much as they want while they’re away,” Hernandez says.
“There’s a clear demand for flexible living and ownership in cities such as Miami, Austin, and others, which have proven to be business hubs and incubators alongside world-class entertainment, a rich culture, award-winning restaurants.”
Asked whether some short-term renters have been known to stay longer, Hernandez answers in the affirmative. He’s seen a surge in length of stay for short-term rentals, reflected in what he calls a “huge demand” for stays of 30 days and more, he says.
Soon, additional developments expressly designed for short-term rentals are sure to sprout, providing a bigger pie for those who want their cake and eat it too.