Bigger Pockets' On The Market Podcast: This Could Be Like Getting Into Airbnb in 2012 w/Jeff Hurst

The short-term rental market has transformed dramatically since Airbnb’s early days, evolving from a fringe concept to a global phenomenon. But with this growth, investors have also faced increasing challenges like heightened competition and stricter regulations. A new opportunity is emerging that many real estate professionals are now comparing to the early days of Airbnb—monthly rentals. In the podcast On The Market, titled “This Could Be Like Getting Into Airbnb in 2012”, hosts Henry Washington and Dave Meyer explore with Furnished Finder CEO Jeff Hurst how monthly rentals could become the next lucrative frontier for savvy investors.

The Evolution of Short-Term Rentals and Why Timing Matters

The early 2010s marked a period of rapid growth for Airbnb. At the time, the concept of renting out a room or an entire home to travelers was revolutionary, providing a win-win scenario for both homeowners and travelers. Homeowners could earn extra income from unused spaces, while travelers enjoyed a more personalized and cost-effective alternative to hotels. Investors who entered the market early benefitted from low competition and high demand. As the platform grew, so did the competition, and many of the early adopters saw impressive returns on investment.

Fast forward to today: Airbnb and similar platforms have become mainstream, with hosts worldwide competing for bookings. What was once a relatively untapped market has now become saturated in many popular tourist destinations. Along with this saturation, many cities have implemented strict regulations on short-term rentals. These rules, often aimed at curbing housing shortages or maintaining neighborhood character, can limit the profitability of traditional Airbnb-style rentals. In places like New York, San Francisco, and Barcelona, restrictions have made it difficult for investors to sustain high occupancy rates, especially during off-peak seasons.

This brings us to monthly rentals, a relatively under explored niche with growing demand, particularly in the post-pandemic world. Much like the early days of Airbnb, this space presents opportunities for investors to secure steady income streams by catering to a different kind of renter—those seeking longer stays but still short enough to avoid the hassles of long-term leasing.

What Are Monthly Rentals and Why Are They Important?

Monthly rentals typically cater to renters who need housing for 30 to 90+ days, and the clientele is quite distinct from short-term vacationers. The most common tenants in this category include professionals, such as traveling nurses, corporate employees on temporary assignments, and remote workers. Unlike vacationers, these individuals often prioritize convenience, location, and amenities like furnished spaces and utilities included in the rent.

One of the primary platforms mentioned in the podcast for monthly rentals is Furnished Finder, which connects landlords with tenants seeking fully furnished housing for extended stays. The rise of remote work, particularly post-pandemic, has fueled demand for this type of rental. Monthly rentals allow workers the flexibility of temporary living arrangements without the long-term commitment of signing a year-long lease. At the same time, these rentals offer a more stable income stream for landlords compared to the unpredictability of short-term vacation rentals.

Why Monthly Rentals Could Be the Next Airbnb

In 2012, many people underestimated the potential of Airbnb, allowing early adopters to capitalize on the growing platform. In a similar way, the podcast hosts believe that the monthly rental market is still in its infancy but has the potential to explode in the coming years. Here’s why:

1. Regulatory Shelter: Unlike short-term rentals, which have faced heavy regulation in many cities, monthly rentals often fall into a different category. Because tenants stay for longer periods, they can avoid many of the legal limitations placed on vacation rentals. For example, cities that limit rentals to a 30-day minimum often do not regulate stays that exceed this period, making monthly rentals a safer option for investors.
2. Steady Income Stream: Monthly rentals offer a more stable income compared to the highs and lows of vacation rentals, which are often seasonal. With tenants staying for weeks or months at a time, landlords can reduce vacancy rates and administrative costs. The longer duration also means less turnover, lowering maintenance and cleaning expenses that short-term rentals typically incur.
3. Less Volatility: The podcast notes that short-term rental income can be volatile, especially in markets affected by tourism or seasonal fluctuations. Monthly rentals, on the other hand, cater to a different demographic, leading to less volatility. Tenants such as traveling nurses, contract workers, and digital nomads need housing year-round, regardless of high tourist seasons. This provides landlords with a consistent and reliable revenue stream.
4. Untapped Demand: The market for monthly rentals is still relatively untapped. While platforms like Airbnb and Vrbo have dominated the short-term rental space, monthly rental platforms like Furnished Finder remain niche, offering adopters a unique opportunity to corner this market. Just as early Airbnb investors gained a head start, those who focus on monthly rentals could potentially see high returns as the market matures.

How to Get Started with Monthly Rentals

For investors looking to dive into the monthly rental market, the approach requires a slightly different strategy compared to short-term vacation rentals. The focus should be on providing comfortable, fully furnished spaces that appeal to professionals. High-speed internet, workspaces, and proximity to business districts, hospitals, or co-working spaces become essential amenities.

Another consideration is pricing. Unlike short-term rentals, where rates can fluctuate significantly depending on the season or day of the week, monthly rental rates tend to remain consistent. Investors should set their rates competitively to attract long-term tenants while factoring in the cost of utilities, furnishings, and cleaning services. However, even though monthly rentals might offer lower nightly rates compared to vacation rentals, the extended duration of the stay often makes up for the difference in overall profitability.

Is It Too Late to Invest in Monthly Rentals?

One of the most frequently asked questions in the podcast is whether investors are already too late to enter the monthly rental market. The answer? Absolutely not. Just as the short-term rental market continues to evolve, so too does the monthly rental space. As the hosts point out, many markets are only beginning to recognize the potential of monthly rentals, particularly in the wake of the COVID-19 pandemic and the rise of remote work.

Investors who move quickly and position themselves effectively could see significant returns in the coming years. Much like those who got into Airbnb early, these investors stand to benefit from being ahead of the curve in a growing industry.

Final Takeaway

In the same way that 2012 marked the early boom of Airbnb, 2024 and beyond could represent the dawn of monthly rentals as a mainstream investment strategy. Platforms like Furnished Finder are leading the charge, offering investors a way to diversify their portfolios and achieve consistent revenue streams with lower risks than short-term vacation rentals.

The key is to act now. The monthly rental space is still relatively untapped, and with the right approach, investors can position themselves for long-term success. For those looking to diversify their real estate investments or break into the rental market, monthly rentals offer a lucrative, low-risk option that could provide significant returns in the years to come. By focusing on the needs of professionals and offering fully furnished, move-in-ready properties, investors can attract a steady stream of tenants and minimize vacancy rates.

The future of real estate investment might not be in short-term vacation rentals, but in the stable, long-term potential of monthly rental Listen to the full episode here. Ready to list your property? Get started today.