How this entrepreneur looks to revolutionize the Luxury Real Estate Market and how agents feel about it.
In just a matter of 7 years, Airbnb has changed the way the short-term real estate rental market works.
Founder Joe Poulin, founder of LuxuryRetreats.com had this similar idea for the high end niche luxury market in 1999 when he founded the company, but until of late hasn’t seen much success. With the success of Airbnb, investors interest has now peaked for this up and coming website that has now raised $11 million in Series B funding and an overall total of $16 million from investors.
Homes currently on Luxury Retreats usually exceed $1,000 per night, which is likely to keep moving upward as they look to make their stamp in the Big Apple.
Now it’s hard to say whether short term rental sites like Luxury Retreats is good or bad for the real estate market. On one hand people in a sense can preview before they buy. They get the privilege of going through the living experience in an area and seeing what its really like to live before making any kind of purchase.
On the other hand, people who are renting their home via short term and seeing success may never list their home, therefore if this trend continues and more people began to do it also, it can destroy the inventory in high-end luxury markets.
Is it good or bad?
We reached out to Rancho Santa Fe Luxury Real Estate Expert, Ryan McGovern of Catherine and Jason Barry Team to get his thoughts regarding Airbnb, Luxury Retreats and the overall short-term real estate rental market.
What are thoughts first and foremost regarding Airbnb?
The amount of disruption to the rental industry and level of success AirBNB has achieved is fascinating. They have done a nice job providing an easy to use affordable solution for young families or single travelers who desire a travel option outside of hotels. Their interface is simple for both homeowners and guests and aligns well with tech savvy budget conscious travelers.
Are sites like Luxury Retreats, good or bad for the Luxury Real Estate Market?
While villa rental sights offer nice pictures of luxury real estate and provide affluent travelers access to luxury rentals around the world they typically do not move the needle much for the Luxury Real Estate Market. A very small percentage of travelers on vacation who evaluate local real estate ultimately buy a place in the town they are vacationing in. The one company we have seen effect the luxury real estate market in a positive manner is Exclusive Resorts (www.exclusiveresorts.com) who has built their business model based on acquiring the majority of their luxury real estate destinations by purchasing hundreds of luxury estates around the world.
Do you feel the success and investor interest of sites such as Luxury Retreats is due to the fact that it allows people not to make a full commitment to purchase a home? As well as allows people to go through the living experience before purchasing a home in an area they are interested in?
To a degree—Yes. The “try before you buy” concept has proven successful over the years in a variety of different businesses. Pending the rental property lives up to expectations and the guests have a positive experience on their vacation—they can walk away with an intrigue in purchasing.
Can you possibly see this happening in the Rancho Santa Fe Real Estate Market? Why or why not?
Potentially. Buyers vacationing in Rancho Santa Fe, Del Mar, Solana Beach, & La Jolla continually walk into our offices and inquire about luxury real estate. They fall in love with the San Diego experience and seek our help in making it a more regular part of their routine.
For more information, contact Ryan McGovern of the Catherine and Jason Barry Team, Rancho Santa Fe’s Top Real Estate Team.