The Top Cabin Investment Trends for 2023: Where to Put Your Money
Globally, the value of the vacation rental industry in 2021 was over $74 billion, about 32% higher than the previous year. And the projected growth of the industry this year is exponential. Vacation rental properties like cabins or chalets can be a good option to diversify your investment portfolio.
But you must keep up with the fast-moving trends to make successful investments that give you at least a 10% return on your investment. Learn about the top cabin investment trends for 2023 here.
Top Cabin Investment Trends in 2023
Explore the most anticipated cabin investment trends to make the right decision about where to put your money.
Technology At the Forefront
Cabins are often preferred by tourists who want to spend their time in tranquility but don’t want to miss the chance to share their moments. From finding a rental cabin on the marketplace and booking the accommodation to reaching the cabin and enjoying the stay, tourists nowadays want every step to be as smooth as possible.
So, properties with high connectivity and smart management systems will be in more demand this year.
Keep In Mind
These properties are more convenient for owners to manage.
Source: Mountain Zone
In 2020, total revenue from tourism was over $84 billion. And a big chunk of this revenue came from mountain tourism. Investing in cabins located in mountain ranges and national parks surrounding them is popular now. Among these locations, the Great Smoky Mountain National Park in Tenessee is at the top of the most visited list. So, you can check out cabins in the Smoky Mountains to invest in.
Keep In Mind
The surrounding view of a mountain cabin plays a vital role in attracting tourists.
Short-Term Rental Properties
Though the short-term rental industry was heavily affected during the pandemic, it started recovering from the damage. As you can see in the above chart, the demand for short-term rental properties is about to rise by 5.5% this year.
The average active listings will also increase, but the 1.7% growth in the average daily rate can keep you relaxed. So, short-term rental properties are expected to give you a steady gain over the year.
Keep In Mind
New regulations for the industry are peaking from the horizon. Stay aware of them to make the most out of your cabins.
Environment-friendly properties are gaining more attention with increasing awareness of protecting mother earth from the possible apocalypse. About 81% of travelers focus on the sustainability of the accommodation. So, properties with low use of plastic and more energy-efficient devices are in high demand.
Keep In Mind
Cabins with renewable energy sources and recycling practices will become more popular.
Availability of Modern Amenities
While affordable accommodation is one of the main focuses for tourists, no one wants to compromise comfort. From convenient showerheads to smart appliance control, small factors add to the overall comfort during the stay in a rental property.
So, cabins with a cozy interior, fast internet connection, and more virtual controls will be prevalent in the upcoming years.
Keep In Mind
With the increasing number of electric vehicles, properties having vehicle charging systems will get an edge.
Factors You Need to Consider Before Investing in Cabins
Investing in a cabin can be an expensive venture. Eliminate risks by considering crucial factors.
- Projected Income: The typical return on your investment should be close to 10%. But anything less than 8% isn’t a good return. So, calculating the projected income from the property is the first thing you should do.
- Managing Expenses: Apart from the purchase price of the property, you might have more upfront costs. Take the cost of renovation into account. There are other upfront costs, such as appliance upgrades, that you must consider before estimating the total expense.
- Year-Round Demand: Unless the cabin is in a popular tourist destination, it might not have high occupancy rates. Think about the seasonal demand of a property based on its location, climate, and other factors. It will help you secure a steady revenue stream throughout the year.
- Local Regulations: Property taxes and other regulations can vary depending on the location. So, be aware of local laws to avoid hassle on the property.
- Target Audience: Carefully select the appearance and features of the rental property based on your target audience. Traditional properties are more suitable for elderly tourists, while Gen Z might fall for cutting-edge design.
The vacation rental industry is getting revived, and it is the best time to invest in cabins. But that comes with some possible challenges around the corner, and you need to be familiar with the current and upcoming trends in the industry to cope with the situation. Focus on sustainability, technology, and the audience mindset can help you generate stable income from cabins.