The Future of Short-Term Rentals: Insights from Colin Carvey
The short-term rental (STR) market continues to grow as an attractive investment option for real estate enthusiasts. Yet, navigating the complexities of this industry requires many things such as strategic planning, deep data analysis, and understanding market dynamics. In a recent episode of the Showplace Podcast, Justin Miller, CEO of Showplace, sat down with Colin Carvey, co-founder and CEO of Revedy, to discuss the state of STR investments, property management, and his own personal entrepreneurial journey.
In this blog, we’ll highlight key takeaways from their conversation, and if you would like to hear the full podcast then you can listen here.
Why Short-Term Rentals Are Gaining Traction
STRs stand out as an investment for their dynamic revenue potential, especially compared to long-term rentals (LTRs). STRs adjust pricing daily, enabling investors to capitalize on market trends and seasonal demand. According to Colin Carvey, STRs not only generate higher cash flows but also offer flexibility in how you use those assets. For example, investors can use the property themselves during off-seasons, an option unavailable with LTRs.
Regulation: An Unexpected Ally for STR Investors
Regulations often sound like a red flag for investors, but Colin highlights an interesting insight: regulated markets can be more lucrative. Why? Strict regulations reduce the overall supply of STRs, creating a high-demand environment for properties that comply with such regulations.
Markets like Palm Springs and San Francisco, which have stringent STR regulations, offer incredible returns for properties that meet the criteria. Investors that are willing to navigate all sorts of red tape may acquire an asset with a higher long-term value.
The Key to STR Success: People and Property Managers
One of the biggest differentiators in STR success is effective property management. As Colin explains, the best property managers excel in three areas:
Revenue Management: Proper pricing strategies and channel management can lead to revenue swings when compared to similar properties.
Guest Experience: Positive reviews directly impact occupancy rates.
Market Knowledge: Property managers with localized expertise often outperform larger firms with less attentive resources
What Makes a Good Investment?
Revedy uses data-backed insights to identify properties with strong investment potential. Colin shares a few tips for these types of investments. Some tips he provides to investors are to look at the cap rate and how much annual rental revenue the property can generate.
This approach helps investors balance property costs, expected revenues, and ongoing expenses, ensuring they enter deals with confidence.
The Future of STR Investments
As interest rates fluctuate, Colin predicts a surge of investors and second-home buyers entering the market when borrowing costs decline. However, this will likely drive up housing prices, making it a little harder for first-time investors to get into the market..
The silver lining? STRs offer a unique diversification opportunity. STR revenues are driven by travel demand, making them more resilient to market fluctuations.
A Word to Aspiring Entrepreneurs
In addition to STR insights, Colin shared his journey as an entrepreneur. Starting a business is no small feat—it requires optimism, persistence, and a willingness to adapt. Whether it’s building a startup or expanding an STR portfolio, the key is surrounding yourself with the right people and staying focused on your goals.
What’s Next?
The world of STRs can be daunting at times; however, there are lots of resources available to you to make the journey that much easier. Companies like Showplace and Revedy both offer excellent services that can get your property off the ground and move you right along to becoming a successful investor.
Want to hear more from Justin and Colin? Click here to listen to their whole conversation and learn more about how to make the most out of your STR.