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It’s official: the FDA has given the green light to administer the Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) coronavirus vaccine on US soil. Doses of the vaccine will be meager at first and therefore limited to healthcare workers and nursing home residents, those who are said to be most vulnerable during the pandemic. But come spring, the hope is that there will be enough doses of vaccine available (either from Pfizer or a competitor) to inoculate the general public (or at least those willing to roll up their sleeves). And that, in turn, could be of great help to real estate investors who depend on short-term rentals.
The vacation rental market could grow
Americans, for the most part, have spent most of 2020 camped out in their homes, bored and isolated from friends and family. Once a vaccine is widely available and travel restrictions are lifted, we are likely to see an increase in bookings in the short term, as Americans can return to comfortable travel or board flights.
Of course, it’s easy to assume that the travel industry as a whole will rebound once mass vaccination efforts are underway. But short-term rentals can have an advantage over hotels for a key reason: They lend themselves to better socializing. For months, Americans have not been able to safely spend time with family and friends. Once things improve, families will seek to reunite and friends will plan to reunite. And vacation properties do a good job of making those things happen.
Travelers may also prefer vacation properties to hotels because hotel rooms can be small and claustrophobic. After months of being stuck at home, those hitting the road won’t want to experience anything that mimics the feeling of being locked up.
Therefore, short-term homeowners have an excellent opportunity to enjoy an increase in income by the summer of 2021. But to get the most out of it, they will need to market their homes strategically and invest in the right amenities. Larger property owners may want to cater for groups and families. That could mean investing in common area furniture or even restocking your board game cabinets. Those renting smaller spaces in major metropolitan areas can give themselves a head start by offering superior amenities and experiences – for example, by recommending tours of local breweries so outsiders can hang out like locals.
Short-term owners will also need to keep their prices competitive, especially as many travelers may be reeling from the financial impact of the pandemic by the time vaccines are widely deployed. And, of course, flexibility with cancellation options will be imperative, especially since the availability of a vaccine will not automatically end the health crisis that has plagued the world since March.
The final result of Millionacres
Still, the introduction of an effective vaccine is something that should excite owners in the short term, especially since the last few months may have been slow from a revenue point of view. As soon as the public gets the green light, domestic travel could really explode, and homeowners with vacation rentals are in a great position to turn a profit in the not-too-distant future.
In fact, real estate investors looking to expand their portfolios may want to buy vacation homes before the post-vaccine boom. Although home prices are inflated these days due to limited inventory, stepping into that window could make those premiums worth paying.
