Short-Term Rental Trends 2025: Boost Your Airbnb Bookings with AI, Google, and Pricing Tips

foreign hi this is Russell gray co-host of the real estate guys radio show here for another edition of boots on the ground and we're going to be talking about short-term rentals with our expert guest Tim Hubbard from rest methods hey Tim Hey Russ good to be here it is so good to have you you know we go back a bit we met each other I believe on one of our investor Summits and were you a short-term rental investor at that time yeah I have been I

think I've been on Seven Summits and I've been invested in short-term rentals for about seven years so okay yeah oh you you know I love going on the summit because I never know who's going to be there who I'm going to meet but so many interesting people since then you've started a training program which we'll talk about in a little bit but what we like to do with boots on the ground is we like to take a look at a niche in this case short-term rentals

and get a state of the union I I think for people who maybe aren't familiar uh the most common term the way everybody understands is Airbnb you say Airbnb everybody's like okay I get it but Airbnb isn't the only way to do short-term rentals right right no that's that's totally right I mean short-term rentals have been around for forever you know like as long as hotels really but Airbnb really uh created a lot of exposure for the area so we have other sites like the rbo

and home away and a lot of the traditional hotelier sites now like booking.com have what people would think of it as an Airbnb available on their sites now too so it's really just gained a ton of exposure all across the board nice and so you found an interesting way to do this a lot of times when people think about real estate investing any kind of real estate investing they think it's very Hands-On you buy properties right next door or in your neighborhood within driving distance you're

going to be out there checking on it working with the tenants dealing with issues maintaining the property but you haven't structured your business that way tell us a little bit about that yeah well I I got into real estate in the first place to uh to have some passive income so that I could travel I love traveling and that's kind of been a roundabout way how I got connected with short-term rentals because I was staying in them for years and years while I was investing in

traditional real estate um and so really I mean things can be passive with traditional real estate or they could be not passive it just depends on how much we want to let go of and how much we want to delegate and the systems that we set up so I don't spend a lot of time in the day-to-day operations with with any of my properties really well you know when whenever we say the word markets um people automatically think geographies and you're in multiple geographies even International

but it is also demographic which clientele do you serve and then it's product Niche and even within the product niche of short-term rentals there's different niches so I think it might be kind of fun to talk a little bit about each of those different markets because real estate State all real estate is is local it's very nichy it isn't like an asset class like gold or silver or oil or wheat or shares of a stock that are traded same price everywhere at all times but every

every Market every demographic you serve every sub Niche has its own nuances and so you have some ideas about markets and and who you're serving uh and this is Jermaine because we're potentially standing on the threshold or some people would argue we are in the middle of a recession and stock market's been down the wealth effect isn't there home prices Equity is going away interest rates are high you can't borrow as easily and that all is a drag on the economy which is I think what

the FED is trying to do but that translate into all businesses including short-term rentals so what are you seeing out there as we're sitting here in December of 2022 well um a lot of people are having slightly lower occupancies but of course some are having much lower occupancies than they were before and some are doing better so it comes back again to the fact that not all short-term rentals are created equally just just on Airbnb for example they've broken their search algorithm out to I think

at least 53 different categories of short-term rentals so I mean everything from a tree house to an Oceanside Villa so that's the first thing we have to think about when we think about just how are short-term rentals doing is that they're they're all different a recent stat actually yesterday I was with a pricing company that pulls pricing four investors for owners to dynamically price their properties to change prices every day so they have a lot of good data right they need data on events they need

data on occupancies all these things and their stats on a nationwide basis were down 4.11 of their occupancy levels is from what they were seeing so again that's going to vary a lot depending on the type of short-term rental you're invested in the type of Market I think after covet rush you know we saw a lot of people leaving big cities right we saw a lot of people buying vacation homes and money was easy to get back then and um and so we saw a big

increase in Supply while we saw a decrease in Supply in a lot of the Cities so I think it's kind of reversing again uh we're we're seeing a little more stability in the cities and a little less now in some of those bigger vacation home rental areas well because of your network and the students that you've trained and I'm sure all the people you stay in touch with plus you the owner the research that you do just for the deciding on what properties to keep what

properties to add what properties to jettison um where where are you seeing within those niches what is there a sweet spot is there something that has been resilient in the face of a softening economy well I think so it comes down to supply and demand right there's some places uh that are very heavily restricted for short-term rentals and if you happen to have a permit and the supply is limited well those types of areas could do really well for a long time because the demand's always

going to be exceeding the supply but if you're not in a situation like that where you happen to have a permit no one else does I like to invest in in cities where they're attracting more people for the most ever most amount of reasons you know and to me that makes things a little less risky right versus a vacation a purely vacation rental for example where people are only going there for vacation so you know some other reasons why someone might be staying in a short-term

rental is if they're moving to a new city and they want to check it out if they're going somewhere for medical if they are visiting family um you know there's a whole host reasons aside from work and vacation why someone might stay in a short-term rental well it's interesting when Robert and I do field trips when we go into different markets we talk about migration patterns net in migration do we have more people moving in than moving out here it's a little bit different because you

don't need people to come in and become permanent residents you need people who are wanting to come in and spend time there for whatever reason I'm in Arizona a lot of snowbirds come down here in the winter because it's the weather is you know I I think it's really cold but for people who have been living in -20 it's paradise and I totally get that and so the Phoenix market and some of the suburbs has been a pretty good short-term rental market my daughter actually opened

one here in Gilbert she's been doing very well with it and so the other thing we look at is drivers use talked about multiple reasons and so we look at what pulls money in from outside economically in this case it's what would bring people in uh for tourism I suppose or other reasons medical procedures and whatnot when you're out there looking right now do you see any Trends as far as is is uh is is vacation tourism opposite down is medical tourism up down are you

looking at anything like that in some of the markets as you're you're looking at yeah medical for example something that that I always like to look at because we have an aging demographic and medical is something that's really important it's going to be for a long time so those are markets that I feel like have a that's a really strong fundamental you know at least for the foreseeable future um I I look slightly less at vacations actually when I started with short-term rentals I was sort

of catering to someone like myself you know that was uh working remotely uh for for business reasons and I'm traveling by myself a lot of times so those are the properties that I've sort of uh focused on and and I like them you know now one other thing that happened after covet is that a lot more people have the ability to work remotely and if someone was living in a place it was really expensive and they can work 100 remotely they're very likely going to be

looking for a place that's more affordable so affordability is a really big thing that I look at in any Market too because we're seeing a lot of people move to more affordable places and so another interesting thing that we're seeing to Russ is um there's almost like a merge emerging happen between long-term stays so a year lease and short-term stays we're seeing a lot of medium-term reservations happen you know where people are staying for multiple months and I think the because we can work remotely that's

that's really pushing that segment up it's it's airbnb's fastest growing segment or their long-term stays over 50 of their bookings are for a week or more and over 20 percent of all their bookings on Airbnb are for a month or more and it's interesting yeah well that has some tax ramifications as I'm sure you know if you have an average stay of seven days or less it's considered active income if you're materially participating and it's only one of a couple of areas of real estate where

you can get that active loss residential assisted living is another one in fact it was one of the hottest areas we we went to the imn can't remember Information Management Network I think is what they're called but uh they do these real estate conferences they have a short-term rental conference coming up in January uh 2023 in Miami but they did their single family rental Forum in West in Phoenix just here in December earlier this month and we went and we always go to see what the

state of the thought is where the big thinkers the hedge funds the big money Players think the best opportunity in real estate is in the single family home space and it was short-term rentals one of the reasons we wanted to talk to you because it is one of the hottest the hottest niches so it's really really interesting about that but if it's if it's short-term truly short-term seven days or less you can get write-offs against your active income if you go seven days or more on

average now it becomes passive so is that a consideration for you I guess you're considered full-time but for any of your students is that something you consider when you're thinking about how to organize your property whether to accept those longer stays yeah absolutely I mean I've been a full-time real estate investor for you know 12 plus years so that hasn't affected me as much but you know if you have a doctor for example uh and this this becomes very very important you know if their tax

rates 40 50 and they can offset a lot of those dollars by getting a short-term rental and qualifying to materially participate in one of the beliefs seven different ways that you can actually qualify and that becomes a huge huge uh win I mean even if you just look at that property as breaking even if that allowed someone to save 40 you know or to to offset that income that can be a really huge win so really important thing to look at well especially now we've got

this is in 2022 the last year of 100 bonus depreciation one of the gifts we got in the major tax reform it starts to wind down meaning in 2023 it's 80 bonus depreciation but still pretty considerable so someone could come in and open up a short term rental and make sure they only take those seven day or less bookings and keep their average down and materially participate and then take those big deductions then later on when they don't those deductions have already been taken they could

probably switch over and start taking those longer bookings and maybe go buy another one a new one with a fresh depreciation schedule and do the short-term bookings and do the same thing and keep keep kind of grinding out those tax benefits while you're accumulating a portfolio I don't think anybody wants to walk away from someone who's saying hey I'm willing to pay you every night that I'm here for the next 90 days I think you know you don't want to let the tax tale Wag the

investment dog sounds like a pretty good deal to me so let's talk a little bit about geographic markets because I know you're kind of an international man I think you're recording right now you're sitting in Colombia as I'm sitting here in Arizona but where are some of the places you have properties now how are they doing and are you are you looking at other places are you looking eating out of other places based on what's going on in the world right now so I'm in California

Oklahoma and Tennessee in the U.S and then yeah I have property here in Colombia and also in Brazil and uh I've been slowly leaving California actually for quite a long time before I you know I guess six seven years that's where I started investing in this numbers change there you know I was sort of searching for better better returns and also maybe safer more landlord friendly places so that brought me out of California and I've slowly kind of been been leaving there um I think there's

a really so the markets I'm in though I would say Oklahoma and Tennessee those are very they're not super cyclical markets you could say you know so they they're not they're not the ones seeing the massive appreciation which isn't something that I'm Investing For anyways it's a nice side benefit but these are places that are just moving along steadily that have good employment that are growing they're affordable uh and so but outside of the US you know we actually have a really interesting opportunity right now

I mean our dollar is strong and it's really strong and um like down here in Columbia for example a partner and I were starting on a small development a little community of airbnbs and we get to build in pesos and actually a unique thing about here in Medellin is we're going to be charging in dollars so it's a it's a really good opportunity there's not a ton of places I've found like that but another reason we're bullish on this is because a lot of people are

working remotely and we're three hours from Miami and they come down here you know anyone comes down here nice quick flight direct flights every every day and their dollar goes so much further so that's an interesting thing happening as well really in the whole world yeah well certainly the strong dollar has created some anxiety uh in international trade but for Americans who can invest internationally it actually to your point creates a lot of opportunities so that's exciting too okay so let's wind this thing down with

a couple of just uh Hot Topics or or key points because again boots on the ground update we'll have you back uh certainly call us anytime something changes you think you want to get the word out but we like to check in from time to time but if you could look back maybe a year ago compared to today are there any major trains or Trends or differences changes that you've seen that are notable for people who are either in the space or interested in getting into

it yeah I mean I'd say if we look back a year ago um I mean there was a a lot of people were buying second homes vacation rental homes and so there was a big increase in Supply there and I think that that that segment uh could be uh challenged quite a bit more but another interesting thing about short-term rentals Russ is that every Market's different of course but every short-term rental is different so it really comes down to how we're operating our properties I mean

we could talk about a market that's really struggling but there could be lots of individual properties within that market that are really exceeding expectations and exceeding returns because they know how to operate it well because they have excellent reviews maybe because they have their own Marketing System set up and they're not even using Airbnb so I think management is is becoming more and more important especially as we see a weakening economy and maybe a little less disposable income going forward and that's something that anyone can

improve on so let's close out on the bonus question I think the hot topic for Real Estate Investors everywhere is interest rates on mortgages and I know maybe in some countries you're just purchasing for cash I don't know what the financing picture looks like but I'm going to guess most of our audience are American investors investing in America and probably wanting to use mortgages when you think about what's going on in mortgages with the rates having climbed what's the mortgage climate like right now relative to

short-term rentals and how is that affecting or is it affecting the investment decisions that you're making or your students are making yeah it totally is I mean the cost of money is going up uh then it's more expensive to purchase a property so we use the same loans pretty much to buy short-term rentals as we would to buy other traditional residential real estate and so the cost has gone up for us as well and we have to consider that you know that's part of uh the

underwriting for that property I mean I think there's there's also another side to this those interest rates go up uh you know more seller financings emerging which creates more flexibility maybe someone that couldn't qualify traditionally with a a big bank they can work directly with a a homeowner that maybe needs to sell their home or wants to sell it uh we're not we're in a buyer's market now right so we don't have to compete against 30 40 other offers and we can take our time and

we can we can really evaluate the deals uh that we're checking out and you know if if something makes sense today at today's interest rates which I know there are lots of opportunities out there that do uh if it makes sense today and we can fix that loan for a long time and interest rates happen to go down in the future we can always refinance right we're going to be in an even better position so uh while it's getting more difficult I think there's also another

side to it I totally agree in fact uh part of the reason I wanted to tee that up is because that's exactly the way I feel about it there's a couple of areas in single-family homes short-term rentals and residential Assisted Living where the cash flows are significantly higher when the property is operated for those purposes than whether it's just a long-term typical long-term rental so if you consider home buyers who are less able to qualify less able to bid up property and then you take investors

who are only looking at the property for its capacity at traditional long-term rent they're going oh this thing doesn't pencil somebody who thinks outside the box with a short-term rental or something like a residential assisted living facility for the right property can come in and go hey I can make this thing work at today's high interest rates and to your point if rates go down great because you can refund Finance the property and you're probably going to have some Equity happen at the same time as

more buyers come in competing but the flip side is also an advantage because if you lock in an interest rate today it seems high now compared to where we were a year or two ago but if rates were to continue to go up then you're going to be really glad that you have the locked in rate that you have and by comparison any new inventory coming on to compete against you is going to have a higher cost to do so in a lot of ways you

can win either way just because of the strength of the cash flow of this particular use of the property versus a typical rental property so um okay well good plots on that yeah no I I mean I I agree there's there's two sides to it I think one other thing it's a little too early to say but you know as interest rates go up less people can buy right which means we have more people renting but I also think there's going to be at least a

small segment of people that wanted to buy and they're going to wait around maybe they don't want to sign a year lease right uh they want to weigh around to see if interest rates come down so that they can buy again and if they're not going to sign a long-term lease then I would think that they might be the perfect candidates for these medium-term states as well too so that'll be interesting to see going forward interesting well thanks for keeping us up to date on the

space we love these boots on the ground interviews to find out what's going on in these various niches Robert and I can't possibly pay attention to everything but that's why we have a big network of smart people like you so I really appreciate you taking the time hey Tim I know you train people on how to do what you do because I've taken the class my daughter and I came out and took the class she took your course and actually all by herself figured out how

to open up a short-term rental so thank you for that on a personal note but I know you wrote a special report for us at the real estate guys and so um can you tell us a little bit about that report what's in it yeah it talks about it talks about what I look for in a market um in terms of real estate fundamentals but specifically a short-term rental because not all properties are good candidates for short-term rentals so it's essentially just my process for breaking

that down okay so if you'd like more information you get a copy of that report you can send an email to short term at realestateguysradio.com Short Term at realestateguysradio.com you'll get the report for free and you'll find out more about Tim and his training programs if you're interested in following him you can do that I think you have a podcast don't you Tim yeah it's called the short-term rental riches so just quick bite size actionable uh podcast episodes nice so if you're into the short-term rental

space or want to be make sure you check out Tim Hubbard rest methods and send that email to short term at realestateguysradio.com Tim thanks so much for being with us today thanks for having me Russ all right take care foreign