A Brief Introduction to short-term Housing
Short-term and vacation rentals have skyrocketed in popularity over the last few years, much of it due to the emergence of popular peer-to-peer rental marketplaces like Airbnb, FlipKey, and HomeAway.
Needless to say, the demand for short-term rentals is growing rapidly.
The growth of Airbnb and others has had a significant ripple effect on the broader real estate industry, creating a level playing field for individuals looking to get into the rental space and providing a plethora of options to would-be travelers. These platforms have effectively changed the real estate game, transforming it into an on-demand vertical through increased efficiency and transparency.
Compared to the traditional hotel zeitgeist, the short-term rental vertical is a novel idea. The original corporate housing model has laid the foundation for the short-term rental industry: purpose-built “extended stay” hotels have allowed business travelers to book uniform and predictable places to live.
Although extended stay hotels continue to grow, business travelers, envious of the new on-demand vacation rental services popping up, are eschewing typical, cookie-cutter hotel destinations, instead opting for unique furnished rental options within the short-term rental marketplace.
Hotels are responding to the explosive growth of the short-term rental industry, which is responsible for the current blight of business travelers and a small decline in hotel room occupancy, as the industry’s year-on-year supply growth, 2.1%, narrowly outpaced demand growth, 1.9%.
Dr. Lalia Rach, who sits on the board of the Hospitality Sales and Marketing Association International, says hotels are ramping up their efforts to secure business travelers with “premium services” like exclusive lounges and clubs. In fact, Sheraton Hotels has committed $500M to revamp lagging locations.
Oh the Places You’ll Stay
There are many different types of short-term housing options, and it might be difficult to determine when one choice is more appropriate than others. We’ve put together a quick guide to help you understand when it’s best to use a hotel, a vacation rental, or a furnished rental.
Hotels are the traditional go-to for travelers of all walks of life. Hotels are the flagship of short-term stays, and the options range from small mom-and-pop style bed-and-breakfasts to opulent luxury accommodations created by internationally renowned purveyors. The perks of hotels range equally as widely as their styles: Las Vegas hotels offer gambling, sports betting, and exclusive resident DJs, whereas other hotels offer entire buildings and rooms made of ice!
Hotels are ideal for vacationers and business travelers who prefer a traditional approach with the ability to generate or redeem points and miles. Unfortunately, hotels are too expensive to be a viable option for more than a few nights. Originally, hotels offered weekly and monthly boarding rates, but in more recent years, hotels have structured pricing to optimize turnover.
Home sharing encompasses the entire disruptive travel economy and is the most popular alternative to hotels. Travelers can book a wide range of living options, from shared rooms with bunk beds to entire houses by the night. Some available rentals include a Dog-shaped “Dog House” in Idaho to rural Yurts in Germany. Travelers can also monetize their own property by becoming a landlord on the same platform they book from. Room sharing is also blending with another popular on-demand service. In recent months, hybrid co-working and -living spaces are popping up, meeting the demand of a new generation of traveling entrepreneurs.
Airbnb and Hotel Tonight are just a few of the many different platforms popular with younger working professionals, travelers looking to beat hotel taxes and fees, and those who love to stay off the beaten path. Like hotels, platforms like Airbnb are subject to surcharges and miscellaneous local and state taxes. Unlike hotels, room sharing platforms do not allow users to generate or redeem points or miles.
Furnished apartments are the short- to long-term booking option for travelers who need travel accommodations for one month up to a year. Whereas hotels are perfect for one or two nights and room sharing can stretch as far as a month, furnished apartments fill the gap between vacation stays and permanent living solutions. Furnished rental platforms like HomeAway or Airbnb allow users to book nightly, whereas 2nd Address allows users to book monthly, but the common theme for furnished rentals is the ability to book the entire property without having to share with other travelers.
Furnished rentals are perfect for working professionals who need flexible living solutions. Corporate housing tenants, travel nurses, consultants, interns, and people renovating their homes are typical furnished rental occupants. Like room sharing platforms, booking furnished rentals does not allow travelers to use points. Points and miles can be generated by booking through a credit card.
Dispelling the Myths of Furnished Rentals:
Myth #1: Furnished apartments are more expensive than hotels.
On the contrary. Although great for one or two night stays, hotels fleece users with hidden fees, surcharges, and taxes. Traditionally, hotels are great for one or two night stays but become exponentially expensive scaled up over weeks and even months.
According to Statista, the average nightly rate of a hotel room (without taxes or fees) in the US was $131 in 2018, up from $128 in 2017. Hotel rates in San Francisco topped $319 a night with a yearly average of $302.
For two nights, an average hotel in San Francisco would cost $688.56 including taxes. A weekly stay would cost $1,721.40 to $2409.96, and a monthly stay would cost upwards of $9,639.84 to $10,672.68!
The average monthly rate for a 2nd Address property is $5590, which scales down to $199.64 to $180.32 for a hypothetical daily rate. That’s 26% cheaper in New York and 33% cheaper in San Francisco for a monthly stay.
Compounding on local, state, and miscellaneous taxes and fees is the hotel industry’s deceptive practice of variable advertised room rates, which change unannounced through the booking process. A room listed for $100 a night may inflate as much as 85% percent by checkout! In fact, new legislation has already passed a bill prohibiting the deceptive practice.
Different furnished rental platforms have different practices. Some rental platforms like Homeaway and VRBO hide fees until checkout, whereas booking on 2nd Address shows the entire price upfront.
Myth #2: Furnished rentals have fewer amenities.
Furnished rentals come with all the amenities found in any home. By default, all furnished rentals have a full kitchen, unlike hotels which may have a kitchenette in extended stay options or a shared kitchen available in room sharing options. Other amenities like ensuite laundry machines, backyards, and even pools are available.
Although users book the entire unit, furnished rentals are not necessarily for shut-ins. Some furnished rental syndicates are building fully-furnished community-style living options, similar to the hybrid co-living and -working spaces but with more luxury and privacy.
Furnished rentals are furnished apartments, homes, and condos that come with all the features found back home but with added benefits like a bi-monthly cleaning service. In fact, the furnished rental industry is fueling a new trend in real estate, where real estate agents are selling furniture packages to clients.
Myth #3: Furnished rentals are all shared spaces with little privacy.
Some vacation rental platforms allow users to book a wide range of accommodations, from shared rooms to the entire property. Furnished rental platforms allow users to only book the entire unit, guaranteeing that travelers have maximum privacy.
At 2nd Address, we let tenants book entire properties online with a simple booking process! Read more about our online booking announcement here.
Myth #4: Furnished rentals don’t provide the comforts of home.
Furnished rentals are a home away from home. Not only do furnished rentals provide all the amenities of home ownership, but they also provide all the experiences of being at home. In fact, extra comfort is found in furnished rentals as tenants need not worry about purchasing, moving, and assembling furniture. The comforts of home simply cannot be found in a 325 sq ft hotel room. When leasing a furnished rental, tenants are living in a roomy property that is considerably larger than the average hotel room.
Myth #5: Furnished rentals are not within city limits or right downtown.
Quite the opposite! In fact, the main purpose of corporate housing is to maximize efficiency for the out-of-town commuter by being as close to (or within) major metropolitan areas. Most corporate housing units are actually in the heart of financial districts across the globe. Furnished rentals are found wherever homes, apartments, and condos are.
The Benefits of Furnished Rentals:
More space. Furnished rentals have considerably larger floorplans than hotels. According to Fixr.com, the average size of a hotel room is 325 square feet, including a bathroom. Comparatively, the median size of a 2nd Address furnished rental is over 1,000 square feet!
In addition, furnished rentals vary by size and types of amenities. Standard features include kitchens and privacy, but some furnished rentals come with pools, hot tubs, backyards, and even in-home theater entertainment systems!
More freedom. Furnished rentals are just like homes. Tenants have their own place and abide by their own rules. Airbnb has it’s fair share of “eccentric” hosts known for crazy and downright unenforceable rules, so if you aren’t fond of taking orders and walking on eggshells, furnished rental platforms that guarantee the entire place like Homeaway and 2nd Address are your best options.
More perks. Having your own place with your own rules also comes with extra perks not found in hotels or other vacation rental platforms. Furnished rentals can include your own private pool, BBQs, and sometimes additional amenities like discounted golf, gyms, and secured parking if the property in question resides inside a private community.
The Drawbacks of Furnished Rentals:
Hotels do have benefits over vacation and furnished rentals. Most hotels offer around-the-clock room service, daily maid service, valet, onsite restaurants and bars, a concierge, workout facilities, and even onsite dry cleaning services.
In addition, hotels that are a part of a larger network offer unique rewards system not available when booking vacation or furnished rentals. Although corporate housing specific providers have contracts with large Fortune 500 companies, hotels allow travelers to both generate and redeem points.
Different Uses of Furnished Rentals:
Corporate housing. Instead of sticking to corporate housing networks provided by the company, try furnished rentals, which provide much more flexibility and variety. A short-term furnished rental can act as a home away from home while traveling for work for extended periods of time. If you crave a nomadic lifestyle but want something familiar and comfortable to come back to, a furnished rental is right for you.
Consultants. Hotel magistrates like Starwood hotels are the preferred business travel partner for consulting firms across the globe. However, with longer consulting contracts, scaling up the costs of hotel rooms over weeks becomes too expensive, and bouncing between hotels is too impractical. Instead choosing a furnished rental allows you the freedom of movement without having to pack up and check out. Fly home for the weekend and leave all work-related clothes and items back inside your rental if you want to.
Travel Nurses. Travel nurses secure contracts through their own networks and are often left unsatisfied with the selection of housing options. Instead of becoming complacent with a place to stay, travel nurses can benefit from our easily modifiable leases and wide range of housing options in every major market. With our platform, we find the perfect place for you to live, saving you time and frustration.
Extended Medical Stay. Furnished rentals near hospitals aren’t only for travel nurses. short-term rentals are the perfect solution for family members who want to stay close to their loved ones without having to limit themselves to brief and expensive stays in nearby hotels.
Remodeling & Relocation. Remodeling alters homeowners’ relationships with their homes. Contractors need easy access, and with a crowd of workers moving in and out, noise, dirt, and dust piles up. Furnished rentals are an excellent relocation solution for homeowners who want to live life interrupted with all the conveniences of living back at home.
Divorces. Furnished rentals are also the perfect place to seek asylum during a divorce proceeding. Our leases are extendable to match court delays, and leases can be signed by a 3rd party (like a lawyer) to protect tenant privacy. In addition, furnished rentals provide all the comforts and conveniences back at home without the need to forfeit or relocate any furniture.
Furnished rentals have variable uses. Flexible booking options, cheaper rates, and wider availability make furnished rentals a smart short-term housing solution. In addition to costs, furnished rentals let tenants live in the entire property alone and free from unorthodox traditions. When booking directly with 2nd Address, tenants are protected by our Tenant Guarantee, which let’s you book with confidence knowing the place you saw online matches the place you see in person.
Get started today at 2nd Address.com!