ReAlpha plans to spend $ 1.5 billion to buy short-term rental homes

Giri Devanur, CEO of ReAlpha (Giri Devanur, iStock)

Building on Airbnb’s success, more and more investors are entering the short-term rental market.

Ohio-based asset management firm ReAlpha plans to spend up to $ 1.5 billion to purchase short-term rentals, Bloomberg News reported. The amount is enough to buy around 5,000 homes, said Giri Devanur, CEO of the company.

Over the past decade, a herd of entrepreneurs have joined the short-term vacation rental industry. As the industry matures, large-scale investors are joining the pool, hoping to get their piece of the short-term rental pie.

“The business model has been proven successful, and now the opportunity is to do it at scale,” Scott Shatford, CEO of AirDNA, which provides data and analysis to the industry, told Bloomberg News. “People don’t know how to deploy capital fast enough. “

ReAlpha will initially target homes in Austin, Dallas and Miami, deploying artificial intelligence software to evaluate the listings. The company also hopes to buy foreclosed homes when a federal moratorium on foreclosures ends.

“We can analyze thousands of properties in a minute. For us, it’s all about technology, ”Devanur said at the point of sale.

Buying homes for short-term rentals is complicated by a shortage of home inventory which is now at an all-time low. In addition to individual homebuyers, short-term rental investors will have to compete with Blackstone Group or KKR, which aims to buy homes for billions of dollars to operate single-family home rentals – another popular investment area.

For larger-scale investors to list more homes on its platform could benefit Airbnb, as its users may have options that are not currently available. An Airbnb representative declined to comment.

[Bloomberg News] – Akiko Matsuda

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