Well, welcome back to the Short Term Rental Riches podcast.

I’m happier here again, and I’m happy to be home in Medellin, Colombia.

I just got back from a nice trip out to California, where I grew up.

If you’ve been listening to the podcast for a while, then you know my backstory.

For those of you that are new, my team and I have managed over 40,000 guests in seven countries now.

We’re in about 20 cities, and we’ve learned a lot over the years.

Sacramento was actually where I got started with my short-term rental journey 10 years ago.

Yep, back in 2015.

And I still own those properties there in Sacramento.

And so I went back, took a look at them, and I’ve just learned so much since then.

And so much has happened just in the last year.

So I’m excited to just kind of recap 2024 and also give you my predictions for 2025.

These predictions will be based off of all of our partner properties and also my personal portfolio.

So stay tuned and let’s jump right in.

Welcome to Short Term Rental Riches.

We’ll discuss investing in real estate, but with a specific focus on short term rentals.

Quick, actionable items to acquire, manage and scale your portfolio.

I’m your host, Tim Hubbard.

Well, welcome back to the show.

I’m glad you’re here again.

I listen to a lot of other podcasts, a lot of YouTube channels, and I go to a lot of live events throughout the year.

And 2024 was no different.

I went to quite a few, including the VRMA, the industry’s largest event.

I went to several others, and I learned a lot as I have for the last decade since I started managing my own short-term rentals.

I’m excited to share just some of the recaps for 2024, just real quickly, and then what to expect for 2025, based on my own predictions, but also some of those experts out there that I follow closely.

So let’s just jump right into it.

What could we expect in terms of supply and demand in 2025?

Well, if you’ve been following along, then it’s no surprise that supply has slowed down a lot.

In fact, in some markets, supply has actually gone down a little bit.

And as supply has gone down, demand has stayed relatively strong, which means that your occupancy, if you were pulling all the right levers and you’ve been operating your property well, your occupancy should actually have gone up.

And now these are stats that the founder of Price Labs also talked about on a recent virtual event.

But just to kind of prove it a little bit more, I’ll give you some stats for my personal portfolio.

So for the last year, I had a jump in reservations.

These are for my personal properties.

From 2,617 reservations for the year to 2,682 reservations.

I know that’s a lot of reservations, right?

My team does an amazing job.

That sums up to a 5% increase in occupancy for my personal portfolio.

Now that doesn’t mean that all these properties were necessarily making more money, right?

We have the other side of that equation, which is our average daily rate, our average daily rate and our occupancy, give us our total revenue.

And that is what’s most important, right?

But how do I know that I did a pretty good job?

Well, I compare my properties against the market, and I also compare them year over year.

And a lot of those properties that earn my portfolio did earn more.

There’s a few that kind of straggled behind.

I don’t know if straggled is a word, but you know what I mean?

I’ve had some maintenance issues over the year, and that could be the culprit.

But from my personal portfolio, I’ve seen my properties range from 4% to 9% increase in occupancy, with the majority of those earning more than they did last year.

So if you’re out there and your occupancy did not go up, well, you may be trying to charge last year’s prices.

And that’s one of the other stats that came out of this virtual event, is that the average daily rate has in fact gone down a little bit across the nation.

Now, I’m speaking specifically about the US, but this is pretty much around the world.

We’ve seen ADRs go down a little bit, but occupancy has maintained strong or gone up a little bit as supply is sort of settled down.

People aren’t adding properties like they were after COVID.

Some markets saw huge influx and new supply.

I don’t want to name any names, but there’s some common ones out there like the Smoky Mountains and Destin.

Those are a little more competitive, so you got to make sure you are at the top of your game.

Now, another thing that’s happening already and that’s going to continue happening is that the supply and demand is going to just level itself out.

So if we look at the amount of short term rentals in a market, it doesn’t take a whole lot of months where someone’s operating that property negatively, where they’re losing money month after month, assuming this was an investment property.

Doesn’t take a whole lot of months where that owner might start looking for other options, right?

And maybe that means going back to a long term rental, which is much easier to do in urban areas.

And if we think about it, if we have this as a backup option, where we can just take our short term rental that’s not performing as well as we had hoped and started again as a long term rental, this really only takes about 6 to 12 months for a lot of that oversupply to settle out in some of these areas.

Now, hopefully, you’re not finding yourself in this scenario.

And the good news for those of you that aren’t going back to a long term rental or that are sticking in the game, you’re still doing well, is that you’re gonna do increasingly better, right?

The more reviews you have and the better those reviews are, the more money your property will make.

And that is a fact based off of the stats that we now have available to us through multiple, multiple data sources.

So in a nutshell, what to expect in terms of supply in 2025, most experts out there, including myself from what I’ve seen from our partners’ properties and my own personal portfolio, is that we can expect pretty similar results as to last year, as to 2024.

So potentially a little higher occupancy as less new supply is added.

Remember, there’s still a lot of people discovering short term rentals for the first time.

Short term rentals are unique.

They have a lot of benefits over traditional hotels, depends on the guest type, right?

But if we’re assuming that demand is staying even or even growing slightly and there’s no new supply being added, well, then we should have a pretty similar year as we did to 2024.

Okay, next up, and I’m sure this one will come to no surprise to you.

This is AI, yes, artificial intelligence.

And if you’ve been tuning in to the show for a while, I’ve talked about this quite a few times.

In fact, we have our own list of ChatGPT prompts that we’ve created, and you can get a free copy by going to strriches.com.

These are prompts you can simply plug into ChatGPT to help you analyze reviews, to help you create content for your short term rental.

We spent a lot of time creating them.

It’s sort of a continuous work in progress, but it can save you a lot of times.

So head over to strriches.com, and you can get that copy for free, as well as a whole bunch of other guides that we’ve put together.

So I don’t want to talk about AI in terms of efficiency, how this is going to help us operate our short term rentals a little bit better.

We’ve talked about that in the past.

We know that there’s a lot of tools coming online that can help with reception, for example.

But I want to kind of switch things up a little bit, and we’re talking about the future, right?

2025, what’s going to happen with AI?

And AI is going to be a big source of search results.

So we know now that Airbnb and VRBO and booking.com, they spend millions upon millions and millions of dollars making sure that our properties are visible to potential guests so that they can get bookings, they can make money, and so can we.

But the searches are somewhat limited, right?

You can filter for a lot of different things, but nowhere near what you could do with AI.

For example, you could search on AI and I’m just kind of making something up.

I want a sandy beach destination that’s 150 miles from this major city that has climate between X and X.

I mean, you can literally break down exactly what you’re looking for with AI.

And not only is it going to help you find those destinations, probably much better than Airbnb or VRBO, but it’s going to give you some booking options, right?

It’s going to pull up Airbnb, but it’s very likely going to pull up hotels and independent properties that have done a really good job at marketing their property, where you can book directly with them.

So AI is going to be a big player in just finding short term rentals.

And of course, the big players are no dummy, right?

booking.com, Airbnb, they know this, and they’re curating their own search results.

This is why Airbnb is asking you for a lot more information as a host now.

What are your interests?

I mean, they really want to match you up to the ideal guest.

And that’s also part of the reason they bought an AI company, right?

Airbnb bought an AI company in 2024.

Yes, to help with operational efficiencies, but also to help with everything that AI can do, which is just, you name it.

AI can do basically whatever you can think of these days.

And I’m really excited about that.

To help with personal interests, to help with the business, to help our guests have a better experience.

So stay tuned on that one.

But I guarantee you that AI is going to be a bigger player in helping you find the perfect short term rental to rent, which means you need to make sure that you have a good direct booking website set up.

There is another good place to go to get direct bookings.

And this brings me to my third point, which is Google.

I think that Google is going to have a much bigger presence in the short term rental industry versus 2024.

So we know that we are personally getting a lot of reservations from Google Vacations, but they also have Google Hotels, right?

And the beautiful thing about listing with Google is that they do not charge you any commissions.

Who knows if that will be like that forever, but you definitely want to take advantage of it, why it is available.

Start building those reviews and get more presence.

Now it’s not as easy as just jumping on Google Vacation rentals.

They only work with specific property management software programs.

We use Hostaway, which integrates.

And I know there’s a whole bunch of other ones out there, but if you’re not on Google yet, first of all, you’re going to need a direct booking website, but then you’re also going to need a property management software platform that integrates with them.

So make sure you get on that if you are not already on Google.

Okay, so real quick recap trends for 2025.

You can expect your occupancy to increase slightly if you’re doing a good job because new supply is being limited, right?

Number two, we’re going to see AI just really help out in a lot of different operational places, but also in the way people find your short term rentals.

You want to make sure that you stay ahead of the curve on that one.

And Google is playing catch up, I guess you could say, or maybe they’ve been working a lot of things in the background, but I believe that they’re going to be a big player in the short term rental space.

If you’re not on Google yet, make sure you jump on there.

I’d love to just jump into the economy and give you all of my insights.

I do not have a crystal ball, but I do listen to a lot of people that are much smarter than I am when it comes to the economy.

And a lot of them, I guess the consensus from the people that I pay attention to, is that we can expect a pretty similar 2025 versus 2024.

Yes, consumers are getting a little crunched.

Inflation is still a real thing.

And spending power has dropped, which means people are probably going to be looking for a little more affordable options.

When it comes to interest rates, we know that those play a huge role in investing in property, right?

It really all comes down to the numbers.

And if your borrowing costs are much higher, then there’s probably not going to be as many sales.

And we’ve seen that in 2024, and expect that to be pretty similar in 2025.

I would love to see interest rates go down, but again, I don’t have a crystal ball.

You will find that experts, however, predict that in the future, interest rates will be increasing or decreasing.

Yes, that is what happens, right?

You can listen to a million different people, and there’s a million different answers.

And interest rates are one of those things that we can’t just predict with 100% accuracy.

So with that said, I just want to recap some of the most important pieces and remind you that operating our short term rentals, there’s not just one piece to the puzzle, right?

There’s a whole bunch of different pieces.

And all of these have a compounding effect when it comes to our performance.

So if you’re doing a good job with your revenue management, if you’re doing a good job with your guest experience and you have amazing reception, and you’re doing a good job at listing your property in the right places at the right time for the right prices, and you’re doing a good job of just presenting your property with excellent photos and listing copy, well, all of these things have a compounding effect.

You can definitely outperform your neighbors.

The information is available.

If you don’t want to tackle those things yourself, well, if you’ve listened to the show before, you know that my team and I manage a whole bunch of properties.

We’d love to partner with you.

If you’d like some help, you can reach out to us at strriches.com.

There’s a little property management button there.

And I’d like to speak with you personally to see if we are good fit.

So before we jump off, since it is the beginning of a new year, and I know a lot of you are still out there making some last minute resolutions, a real quick tip that I discovered recently is when it comes to visualization, right?

We know if we can visualize things that they become more real.

If you’re still working on your goals, or if you want to change them up and make them a little spicier, is that you can use some of the AI tools like Gemini, for example, from Google, to create images.

So if you have this visualization of owning a really large portfolio or having a property on the beach or having a penthouse suite in New York, well, you can create exactly what you want in an image.

And then I encourage you to maybe leave that as a desktop background, maybe print it out, the more we see it, the more it will become a reality.

And a quick quote just to finish off the episode, this is from Carl Jung, until you make the unconscious conscious, it will direct your life and you will call it fate.

Pretty powerful stuff.

I hope you enjoyed all of our content from 2024.

I’m really excited for 2025.

And until next time, I hope you have a fabulous week.

Whether you’re just getting started or you have dozens of properties, one thing remains the same.

Poor management can crush your investment returns.

Our team has learned a lot managing over 40,000 guests, and we’ve compiled our biggest takeaways into a handy guidebook to help you better manage your property.

Equipped with checklists for guest verification to pricing strategies, it breaks down our whole process from start to finish.

Best of all, it’s free for you for being one of our loyal subscribers.

You can get your copy by going to strriches.com.

That’s strriches.com and I hope it helps you earn higher returns with less headache.