[00:00:02] Speaker A: This is Short Term Rental Management, the show that is all about short term rental property management with your host, yours truly, Luke Karl.
[00:00:16] Speaker B: There we go. There we go. Short term rental Management. We're here, we're going to party. It's going to be awesome and I love you. We're talking about overnight vacation rental, real estate, renting our second home when we are not using it and such.
[00:00:33] Speaker A: Okay.
[00:00:34] Speaker B: And today's topic is is there a better time of year to buy a short term rental?
Is there a better time of year to list a short term rental for rent? Which really those two things are pretty much the same thing and directly related. And we're going to talk about it today on STRM with Luke Carl, the greatest landlord of all time.
[00:01:04] Speaker A: If you want to buy a short term rental in one of the best vacation markets in America, you're looking for the short term shop.
They are the experts in the vacation rental space.
Their team of realtors are fantastic. If you use the short term shop to buy your home, you'll have access to free classes with me to teach you how to get your property up and running.
Join us at the short term shop.com brokered by exp.
[00:01:35] Speaker B: So first things first, is there a better time of year to buy a short term rental?
Where Dubai and rent, okay. And they're pretty similar, but I'm taking notes here. So first of all, what is a short term rental? Technically, by definition, at least in my opinion, a short term rental is a single family home that we rent on an overnight basis.
This can happen anywhere, anywhere that it is legal.
We personally around here think that it's better to do this in a quote unquote vacation town. A town where not a lot of people live, but a lot of people go on vacation. But there are plenty of people doing this worldwide. As a matter of fact, There are currently 7.7 million listings on Airbnb. That's a lot of houses. Now there's some units on, you know, apartment units, some condos, obviously arbitrage, all all sorts of different things. But in general it is going to be a single family home or a room in the air. Case of Airbnb, this would not fly on verbo, but a room for rent on an overnight basis, a short term rental.
We did not reinvent the wheel with this overnight rental thing. It's been going on for a billion years. It's important to realize, okay, now when it comes to buying and the time of year to do so, generally I think we're referring to there for the most part not always, but for the most part, I think, when can I get a better deal? Are there times of the year that I can get a better deal than others?
And the short answer to that is no.
I relate this to buying a motorcycle because in the motorcycle world there are plenty of folks that are trying to save a buck. There are plenty of folks in the motorcycle world that have way too many bucks.
Very common for super wealthy people to get into motorcycles at some point in their life. Sometimes referred to as a midlife crisis.
I'm joking, but you get my point.
Okay, so in the motorcycle world, there is a bit of a myth that if you buy a motorcycle in the off season, you'll get a better deal. Because nobody's looking to buy motorcycles in the off season.
And sometimes that is true. But I'm here to tell you I have listed motorcycles for sale in the off season. Got them sold. I've listed motorcycles for sale in the spring. I got them sold. Something tells me, and I don't have any data on this or data depending on what part of the world you are from, but something tells me that people are hip to this and sellers have this similar mindset to buyers. In other words, in the wintertime, we're busy. It's holidays. We're too busy to deal with selling this motorcycle. Springtime rolls around, oh, you know what? I think I want a new motorcycle. Let's put the one we have for sale or just trade it in. Otherwise known in the house world as a 1031 exchange. And I think a lot of these principles do carry over to the house world.
The holidays in general are usually decent for rents in some markets. So a lot of times the seller is too busy to care or notice. But then when March rolls around, March is buying season. It's the same thing with motorcycles. March and April is when, if you're looking at a 12 month calendar, more houses are sold in March and April than any other months in the year. Those are the two busiest for closing deals. That's regular houses too. Primary homes, any kind of real estate in general. Now, is it exponential? No. In general, January and February are very slow, similar with motorcycles. I do think that a lot of buyers just aren't really paying much attention. In the wintertime, it's cold. What do I care about a beach house the second the weather changes, usually right around the 10th of March, 15th of. I live in Florida, so keep that in mind. All of a sudden we get a hankering, what I would call what we call back where I'm from. In the cowboy land of Nebraska, we call it a hankering.
You got a hankering to buy a new rental or buy a new house for your family and rent it out.
And then all of a sudden, maybe the home you've got needs to be exchanged or traded in.
Okay?
So people are buying much less in January and February, but we're also seeing much less on the listing side. And again, I'm not a real estate agent, but I do happen to work for a very large real estate team known as the Short Term Shop. We do sell houses in the best vacation market, vacation markets in America, and we would love to earn your business. Okay, so I'm very much on the pulse, although I am not a licensed realtor. So to me, if January and February were a better time to buy a house, the sellers would catch on, and all of the sellers would list their houses in January and February, and the buyers would catch on and on. The buyers would say, oh, we got to buy a house in January because nobody else is buying houses. And then all of a sudden you've got a lot of buyers, and next thing you know, it's no longer the best month of the year to buy a house. So for whatever reason, the equilibrium of the universe keeps January slow, keeps February slow, keeps March and April high.
But for the reasons I just mentioned, I don't think you're going to get a technically a better quote, unquote deal in January and February, because again, if that were the case, everybody would catch on and start buying houses in January, and then that would drive the prices up in the month of January and it just wouldn't work. It's the same thing with motorcycles. Nobody's buying houses or motorcycles in January and February, but nobody's selling houses or motorcycles in January or February either.
That's my theory.
So if you want to know the truth, my opinion is that the best time to buy a house for overnight rental or otherwise is, is when you've got the down payment. I don't know how many times I gotta tell you. The hard part is the down payment. If you've got the down payment, go shopping. It's the same thing with motorcycles. If you're looking to buy a motorcycle, don't worry about what time of year it is.
Just don't worry about it. Go buy it. I hate to be so blunt here, but I do think that thinking there's a better time of year to get a deal than other times of the year, I do think that's thinking a little bit small.
Let's Just get our down payment going and let it rip, baby.
Focus on that down payment. It is so difficult in life to come up with 100,000 extra dollars. I don't care how much money you're making. So be proud of yourself that you got ready to rock on a new property.
Let it rip.
That's my opinion.
So I did take a look at some historical data. I got some data from Mortgage News Daily and I looked at the year 2023, which is not a good year to look at. It's a lot of COVID involved there, you understand.
And in that period of time, January 2024 was actually the most home sales total nationwide. 4 million homes in January of 2024, with all of the surrounding months within a one year period, not, not dipping any lower than 3.5 million homes. So according to Mortgage News Daily, this is not a good set of analysis here because this was post Covid and everything was weird. But if we're looking at just this year alone, we're really not seeing a whole lot of fluctuation per month at all according to the data. The data. Okay, so let's take a look at a pre Covid year. How about that? All right, 2019, according to the United States Census Bureau, May 2019. May was the lowest number of home sales in that year, which not super surprising considering May is, you know, very slow rental month in general as well. People just don't do a lot in May. There's school and it's post spring break, pre summer vacation. So 598,000 homes sold in May of 2019.
Every other month was pretty flat. 644, 669, 693, 656.
And really even May was only about 50,000 less homes.
Again, this is pre Covid 2019.
All right, let's get off the data.
I will tell you that internal data here at the short term shop where we sell homes in vacation markets. I'm back on the data data.
Internal data shows very low sales in Jan and Feb with March and April being pretty high. June and July being pretty high as well. It's almost like home sales are cyclical to rentals, to rents.
Cyclical. Probably not the right word. Maybe concurrent. How about, how about that for a $5 word? Okay, so again, we're just spitballing here, but long story short, I don't personally believe that there is a better time of year to buy a home other than what works personally for you and your pocket, your down payment and your family's life choices.
If there were a better time of year to get a better deal, everybody would be shopping and there would be no deals at during that period of time. Okay, makes sense.
[00:11:36] Speaker A: This episode is brought to you by Short Term Shop Plus.
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[email protected] that's stsplus.com now let's talk about rent.
[00:12:23] Speaker B: Similar thing here, but obviously some variables involved here and I do think there may or may not be better times to purchase based on going for rent, but maybe not for the reasons that you might think.
It is a very new person way of thinking that we need to buy in December, January so that we can get it up and rented for the busy season.
Therefore, buying in August, September to try and tough it out during the slow season is a bad idea. This is true, but again, I think it's thinking a little on the small side. Now I understand because I was small when I first started when I bought my first house. Oh my goodness. I have. How in the hell am I going to pay this mortgage in slow season when I've got no bookings? Totally understand that. Okay, so if you are on a budget, you may need to be prepared in such a way that you are buying the home, say December, January and then listing it for rent when Busy season starts. Go day in most vacation markets is March 15th. That's go day. That's when things get, I hate to say it, but a little easier. That's when people start traveling.
Go day March 15th. Quote me on that. That's going to start spreading around in the world of str. Go Day March 15th as made famous by Luke Cash Flow Carl, World's Greatest Landlord. Can we have some fun here? Is it okay to have some fun and talk with a little bit of ego? I'm joking around here folks.
Not joking about being the world's greatest landlord. I am. I'm good at it. I'm good at it.
Sometimes I'm not that great at getting tile guys to show up. But that.
That is an art.
That is not a job. That is an art.
And sometimes my brush is out of paint, brother.
Anyway, if you are on A budget. It is in your best interest to buy in January, February, get it listed before go day, March 15, and your life will be somewhat easier. And you can start building up those reserves for next slow season, which is generally November, December, January, February, somewhere in that neighborhood. Depends on your market, obviously.
So theoretically, right now is probably the best time to buy, and you could say that about any time of the year. But looking to get this podcast out by the end of January, early February, give or take, and that gives you plenty of time, a little bit of time to get under contract.
You know, obviously got to do your math, find a house that works for you and your family. Short term shop does not run numbers. We never have, never will.
We can lead you in the right direction, but we're not going to say this house will make this much money. We don't do that. There's no way to tell, by the way. There's no way to know unless you own it for a year.
So that's why we don't do it. But if you were to get under contract today, get your thing rocking and rolling, maybe you buy one that's already furnished, you get it rocking and rolling and hopefully we're live somewhere around go day and then we can start to have, you know, a little bit less stress when next holiday season rolls around and we've got some reserves. Hopefully if you do things right to carry us through the winter and pay the mortgage now again, I understand you might not even have a mortgage. There's plenty of people out there buying rental real estate with cash.
There is, I hate to tell you, if you're on a budget, there's somebody out there with way more money than you. And they're buying rental real estate too. And they don't have to deal with a bank and a mortgage and all that kind of stuff and more power to them.
But if you're a regular Joe with a regular job, living an American dream with American family, this would probably be the best time to be list getting ready to list a property to go live because things will get easier come go day. At least until, well, obviously May's a little slow. We'll do another podcast on that. I do have another podcast on that subject, by the way. It's called the Circle of Season. You want to check that out? It's also on the short term shop YouTube channel, Circle of Seasonality.
So if I had to choose a better time of year to go live with a property than others, I would say right now is probably getting ready to be that time of the year. That being said, there's. I'm gonna bring that cyclical word back again. Everything goes in a cycle. So look at it as a 12 month year starting the day that you bought the home. And yes, Jan and Feb are going to be a little lean and difficult to pay the mortgage if you don't have reserves, but you need to have those anyway.
Dare I say, if you can't carry this thing through slow season, you probably shouldn't be getting involved.
That being said, when I first started, I couldn't carry anything through anything and you couldn't tell me no. And I did it anyway. And look at me go.
So what did we learn? Is there a better month of the year to buy a short term rental? The answer to that is no.
Is there a better month of the year to list a short term rental for rent? The answer to that is no. Unless you are on a budget listing somewhere around go day, March 15 would make your year slightly less stressful.
Long story short, you buy a house when you, you buy a rental house, which is what we're talking about here, folks, make no mistake. Just because it's a short term rental, it's an Airbnb, it's a rental house.
Not that big a deal.
It's not a rocket ship. We're not going to the moon, we're just going to Myrtle Beach.
The truth is, the answer to your question is the best time to buy rental houses is when you have down payments, which is was and always will be the hard part. Short term rental real estate Short term rental management Luke, Carl, don't overthink it.
