It comes as no surprise that the short-term rental market is heavily affected during lockdowns, and some investors will be put off by the idea of staying in the market, but that doesn’t mean you should give up on the idea altogether. In fact, lockdowns present a massive opportunity for those investors that are looking to adopt a counter-cyclical investment strategy and take a more long-term approach.
During a lockdown, occupancy rates plummet due to travel restriction, and a lot of investors in the short-term rental market give up hope and either lock in a tenancy agreement, or they start thinking about selling their properties. Both are reactive strategies to today’s problems and don’t take into account the investor’s long-term goals – financial freedom and security. With many properties leaving the short-term rental market due to a lockdown, this presents new investors with an opportunity to jump in at a time when competition is low, and those that stick with short-term rental the opportunity to reap the benefits when the lockdown lifts.
By throwing in the towel, those investors that leave the market are essentially believing that the accommodation industry will not return to normal and that people will not travel when they can. This is obviously not the case as travel is an essential part of life, and the tourism industry was the fastest growing sector in New Zealand before COVID. A lockdown is just a bump in the road towards success, and the market recovers as quickly as it plummets after a lockdown.
We’ve been through a lockdown like this before and now know what happens when we return to normal. People can’t wait to travel! Pent up demand is released all at the same time resulting in the short-term rental market outperforming pre-COVID...
