Techvestor has revealed a completely new sector of the real estate market, allowing investors to earn returns, cash flow, and tax benefits in a passive environment in the short-term rental market. In many ways, Techvestor’s strategy is similar to traditional investing in the multi-family apartment building market, only in a slightly different asset class.
According to co-founder Sief Khafagi, what has helped to separate Techvestor from other competitors is the fact that it has built proprietary technology. This helps the company better understand the best locations to purchase properties, how to operate them, and how to achieve outsized returns.
Because of this, Techvestor has been able to achieve year-over-year top-line revenue increases of between 15% and 30%, even while the rest of the short-term rental market is struggling. The reason for this, according to Khafagi, is the company’s focus on data.
Data Leads Acquisition
“There is immense power in data today,” Sief Khafagi says. “When used properly, it can power everything you do and help you make informed, smart decisions. And that’s exactly what Techvestor does to excel in the short-term rental market.”
Many people have trouble starting in the short-term rental market because they have issues identifying the best markets to buy in. In addition, individual investors are often restricted to only buying properties near where they live.
Techvestor, meanwhile, owns properties in more than ten markets and uses data to discover which markets are prime for opportunity. One of the main determining factors for location is finding an area where price-to-rent ratios are significant, according to Khafagi.
Data Leads Listings and Design
The use of data doesn’t stop at figuring out which markets to buy in and which properties to buy in those markets. It also extends to discovering what amenities to offer and how to get properties ranked highly on sites such as Airbnb.
“Much like Google, Airbnb and other short-term rental sites rely on algorithms to decide which properties should be listed at the top of results,” Khafagi explains. “And, just like Google, those properties that rank near the top of the list are naturally the ones with higher click-through rates and, as a result, higher rentals.”
In addition to ensuring that all of its homes have great amenities, Techvestor also creates different customer profiles so it knows exactly what each type of renter is looking for in a property. It then is able to use data to play into that profile, giving tenants what they want.
Data Leading Success
By utilizing the power of data, Techvestor has found success in markets where others are failing. For instance, a recent article in the Wall Street Journal reported that the Poconos in Pennsylvania has experienced one of the largest revenue declines year-over-year in the country.
Techvestor, meanwhile, has had a lot of success in that region, with a year-over-year increase of roughly 30%. Part of this is due to the company’s focus on homes that can be rented by larger groups. These homes have larger premiums and can be booked further in advance.
“This approach, and the data that drives the approach, results in Techvestor having rent on the books way in advance. That helps ensure we’re cashflow positive at all times,” Khafagi says.
The company has also created a diverse portfolio of properties from multiple regionals, helping to protect against seasonality. When the Poconos is not a “hot” place to travel to, Clearwater, Florida, might be.
Published First on Grit Daily. Read Here.
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