Avoid This Trap: This Property Type Is Completely Unsuitable for Vacation-Rental Investment!

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Hello, and welcome to Snowball Rentals’ WeChat account, where you can read about recent developments in the US short-term rental market.

A few years ago, the booming short-term rental market made many property owners eager to try it. Many asked me what type of property was best suited to investing in vacation rentals.

Back then, the outlook was strong and properties delivering high returns were everywhere.

But after the downturn of 2024, we have finally recognized the risks of one property type. It has gone from a hot favorite to a costly trap. Think very carefully before buying!

1. The risk of oversupply

As cities continue to ease building restrictions and encourage urban renewal, many neighborhoods have seen explosive growth in new housing.

In Seattle, for example, the city government’s upzoning plan has led to many older detached homes being demolished and replaced by several new, modern townhouses.

With modern exteriors and attractive finishes, these properties were once popular in the short-term rental market. Back in 2022, a townhouse like this could generate as much as US$100,000 a year, twice the income from a long-term rental.

But the balance between supply and demand does not stay fixed.

As 2024 arrived, demand in the short-term rental market dropped sharply, while these largely interchangeable new townhouses continued to flood in.

Many similar properties came onto the market in the same neighborhood, quickly creating oversupply and forcing owners to attract guests with lower prices.

Occupancy was also unstable; often, even price cuts could not fill the calendar. Amid this intense competition, even newly built townhouses faced a “winter,” with rental income falling to around US$70,000—a 30% decline in just two years.

2. How interchangeable properties can undermine your investment

Imagine a neighborhood where almost every house has a similar exterior, layout and interior style. Guests’ choices increasingly come down to price. They are unwilling to pay more for any particular home because so many similar substitutes are nearby. Once a price war begins, every owner’s earnings fall like dominoes.

This has a huge impact on new homes, and can be an even more overwhelming blow to existing owners. If your house was built a few years ago and its exterior cannot compete with the new modern townhouses around it, holding your ground in a price war is difficult.

Even if you lower your price, guests still tend to choose newer homes because their appearance and amenities are more attractive. This is a typical example of competition among similar properties: new homes undercut older ones, ultimately pushing rents down across the market.

3. Differentiate your short-term rental investment

In a cooling market, the key to making your short-term rental competitive is to stand out. If your property is unusual in its neighborhood—for example, a one-bedroom downtown apartment surrounded mainly by large four-bedroom homes—this differentiated position can make it more attractive.

Guests may feel your property meets their specific needs, instead of being just one of countless similar choices. This mismatch between demand and supply can help your property stand out.

Similarly, in an area dominated by modern townhouses, a home with distinctive historic character or a unique interior design can stand apart. In a weak market, a distinctive property may attract guests more successfully than a row of identical modern townhouses.

4. How can you reduce investment risk?

For owners preparing to invest in short-term rentals, the first risk-reduction strategy is to choose an area where comparable properties are relatively scarce. Try to avoid investing in areas already covered by an upzoning plan, especially places crowded with new builds, because future competition may erode your rental advantage.

Next, carefully analyze guest demand in the area.

If guests there prefer smaller apartments, investing in a smaller unit that meets their needs is safer than following the crowd into townhouses. Also pay close attention to future planning changes, including government policies easing building restrictions, as these directly affect the future balance of housing supply and demand.

Conclusion

Overall, changes in the short-term rental market remind us that investing means looking beyond the latest boom. When winter arrives, owners should focus on which properties can withstand market fluctuations.

In future short-term rental investments, do not simply chase popular property types. Assess the market’s long-term stability and choose properties with a differentiated position that can stand out from the competition.

I hope every owner finds the right safe harbor on their investment journey.

~ Good news ~

Snowball Rentals’ REDnote account, 阿蓝聊民宿, has passed 2,000 followers!

Thank you to every friend who has supported us. We are grateful to have you with us!

As a homeowner, you may now be wondering: my home is quite good, but how much could it earn on Airbnb? Would it earn more than a long-term rental? Would it involve a lot of trouble?

Contact us right away! We will evaluate it for you free of charge.

If you:

Hope to increase rental income through short-term rentals;

Cannot spare a great deal of time to handle the small details;

Occasionally need to use the home yourself, making it unsuitable to empty out the furniture for a long-term rental;

Then:

Snowball Rentals’ management team is your best choice.

From pre-launch vacation-rental styling, big-data analysis and online marketing to tenant screening, dynamic pricing, customer service and sales, cleaning and repairs, Snowball Rentals provides everything as one complete service for your home.

This Week’s Booking Results

Through long-standing relationships with insurers, assignment companies and technology companies, Snowball Rentals rents homes for medium- and long-term durations at short-term rates, then gives owners a rebate of 5% in management fees to maximize their income.

As the weather gets cooler, Seattle’s short-term rental low season is approaching again.

Short-term rentals in peak season and mid-term rentals in low season: this is the new strategy we have repeatedly emphasized and tried this year! Some recent large bookings have been like a ray of sunshine. Homeowners, let us support one another and face the approaching low season with confidence.

The detached Renton home below can be found on Redfin, where its estimated long-term monthly rent is about $4,522.

With the owner’s trust and support, we carefully furnished the home and immediately began short-term rental operations. Fortunately, because the home’s condition and location are both good, short- and mid-term bookings have continued to come in.

As shown in the booking screenshot below, a guest recently rented this house through Airbnb from November 10 to December 10 this year, a total of 30 nights, with rent

of approximately $6,150.

Notably, this guest is not an individual but a well-known Chinese supermarket preparing to open in Seattle. It has contracted with Snowball Rentals for several short- and mid-term rental homes to provide temporary accommodation for its employees.

In summary, after Snowball Rentals began operating this property, or part of it, its monthly rental income increased from $4,522 to $6,150, an increase of approximately

36%.

Securing such a large booking in low season is no easy feat!

As noted above, this 30-night booking runs from November 10 to December 10 this year, covering one month of the short-term rental low season, September through March of the following year. We believe it can achieve further success when the peak season arrives.

For homeowners, combining short- and mid-term rentals in this way can earn more in peak season and help them get through low season smoothly. Even if the low-season rental figures look less dramatic, they still outperform long-term rentals and give homeowners a strong sense of financial security.

More importantly, the owner does not have to worry about maintenance or cleaning. When something needs to be discussed with guests, we also help with communication and oversight.

Here, we again thank the owner for placing trust in the Snowball Rentals team!

After nearly two years of Airbnb’s downturn, we at Snowball Rentals hope to help owners make steady progress in low season, navigate the challenges safely and lay a better foundation for next year’s peak season.

Once again, heartfelt thanks to our homeowners for their trust and support. Whether the market is strong or weak, Snowball Rentals will stand with you and look for ways to increase your income!

Some homeowners will surely ask the hard question: was a large booking like this just a stroke of luck? What if the home does not rent? A long-term rental is more stable—even earning less is better than earning nothing!

Our answer is: the outcome depends on what we do.

Vacation-Rental Styling

Competition on Airbnb is becoming increasingly intense. The days of piecing together secondhand furniture, taking phone photos and earning easy money on Airbnb are over. Airbnb hosts have moved toward professional operations.

Careful design and furnishing before launch, followed by professional short-term rental operations, will be the only choice for a rental that continues to generate high income.

Here is another of Snowball Rentals’ core services: vacation-rental styling!

After our careful furnishing, the detached home mentioned above looks like this:

When choosing a short-term rental on Airbnb, would this home’s appearance attract you?

If you would also like to make your home more attractive and earn more rent, please contact us at any time!

This Week’s Short Videos

We regularly update short videos every week.

The content you need is all here.

👇🏻 Homeowners are welcome to follow us 👇🏻

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We also share practical vacation-rental styling plans and creative ideas to help you achieve more with less spending!

Keep rental income growing!

Xiao An’s Vacation-Rental Styling

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Referral Rewards

If you are already a Snowball Rentals homeowner, you receive a US$500 referral fee for each referral.

If you are not yet a Snowball Rentals homeowner, you receive a US$250 shopping voucher for each referral.

Snowball Rentals Management

1. Full service — We provide pre-launch rental design, furniture procurement, furnishing, professional photography, online marketing, copywriting, tenant service and sales, cleaning, supply purchasing and property repairs. You only need to be a hands-off owner; we handle the rest.

2. Multi-platform promotion — We promote the home on Airbnb, VRBO, HomeAway and other mainstream platforms for maximum exposure.

3. Dynamic pricing — Using big data, we adjust prices every day according to seasonal demand, holidays, last-minute vacancy offers, weekends and local activities, maximizing the owner’s income.

4. Income-improvement SOP — We follow 44 secrets for maximizing short-term rental income, optimizing each property’s online marketing, on-site operations and other aspects to work toward maximum income.

5. Flexible owner stays — Owners can flexibly choose when to stay themselves. This is especially suitable for owners with multiple residences around the world.

6. Terminate at any time — Management does not require an annual commitment. The owner can end the agreement with one month’s advance notice.

7. Corporate housing — In addition to nightly rentals, we work with insurers and assignment companies to provide executives with hotel-style managed accommodation for stays longer than 30 days.

8. Transparent fees — For rentals longer than 30 days, we charge 15% of accommodation revenue. For nightly rentals under 30 days, we charge 20% of accommodation revenue.

Author’s tip: Personal views, for reference only.