Short-Term Rentals Trend Upward, But At What Cost to Neighborhoods?

Short-Term Rentals Trend Upward, But At What Cost to Neighborhoods?
Photo by Kindel Media from Pexels

Negosentro | Short-Term Rentals Trend Upward, But At What Cost to Neighborhoods? | While having a backyard cottage — also known as an Accessory Dwelling Unit (ADU) — is always a plus, in the last year, these extra mini homes have become a big trend in real estate across the country, and in Florida. What homeowners use them for varies, as a home for inlaws, short-term rental, or even a home office or home gym. No matter their use, the numbers show that 34 percent of agents nationwide saw more requests for properties with ADUs in their markets, according to a recent survey from the real estate experts at HomeLight. Whether you are buying or selling a house, you’ll want to take a closer look at ADUs. 

ADUs are a versatile extra space, and when transformed into short-term rentals they can also bring in some extra income. In our South Atlantic region, for example, 23 percent of agents in the HomeLight survey shared that they are seeing a shift to short-term rentals for ADUs. However, this shift comes with mixed sentiments. Agents in our region also shared that an owner-occupied property in their markets could be worth up to 12 percent less if surrounded by a high volume of short-term rentals. The big question is, do ADUs for short-term rentals really add or take away value from a property, and is this addition worth the investment?

Vacation rentals on the rise

The pandemic gave a lot of people more time to think about their finances, and this led some homeowners to see ADUs as a source of extra income, whether from short- or long-term renters. Across the country, agents from the HomeLight survey shared that 29 percent of homeowners opened up their ADUs in the last year for long-term renters, while 32 percent were interested in short-term rentals (such as a vacation rental). In our South Atlantic region, where we’ve seen a pandemic migration to the Sun Belt, agents shared that 56 percent of ADUs are being rented out on online vacation rental platforms in their markets. 

Design matters

Agents agreed that materials and paying attention to light and design matter a lot when adding an ADU, especially for a rental unit. The top three features that agents in our region saw contributing to resale value in these extra units in the last few months are: durable flooring such as waterproof laminate (recommended by 49 percent of agents); french doors or skylights (48 percent); and granite and name-brand appliances (47 percent). No matter how many homes in your neighborhood have short-term rentals, there is no doubt that one way to make your property value go up is with a carefully designed ADU with these features in mind. And of course having a private entrance is key, as 84 percent of agents across the country shared.

Both sides of short-term rentals

While the question of how short-term rentals affect property value is in flux, there is no doubt that short-term rentals support tourism. This can in turn boost a city’s economy and bring in more entertainment and dining for everyone to enjoy. Regulations about noise and the length of stay for short-term rentals can help to curb some of the issues that might come up. Short-term rentals can also be an amenity in college towns, and 47 percent of agents shared that proximity to a college campus would increase the value of an ADU in their markets. 

Before deciding the best way to use your ADU, consult with a real estate agent who can help you weigh the pros and cons and discuss how it might add value to your home. 

Photo by Kindel Media from Pexels

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