Prior to Covid, monthly rentals were mainly only used by traveling professionals and those looking to move to a new city. As large companies shifted to remote work, people started to question why they were living where they were.
Prior to Covid, monthly rentals were mainly only used by traveling professionals and those looking to move to a new city. As large companies shifted to remote work, people started to question why they were living where they were. At the time, work was surveyed to be the number one motivator in choosing a home. Once work was just an email or slack away, the US started to experience urban flight, a significant exodus of people living in the city to the suburbs or further out. Without the agonizing thought of an hour plus drive to the office, people started buying for more space and amenities rather than for the proximity to work.
Enter monthly rentals. The new way of renting, traveling and living. Depending on whether someone is looking to move, looking to travel with the family for an extended vacation or a digital nomad, monthly rentals fit the bill each time. With such a quick adoption of this new real estate trend, many homeowners are at a loss of how to price their property. This article uses 6 years of booking data from Homads, a monthly rental marketplace that started in 2016 in Austin, Texas.
Pre-Pandemic Monthly Rental Trends Prior to Covid, we saw a lot of business travelers such as traveling nurses, scholars and the occasional digital nomad. Many were just looking for a quick place to stay while on contract and didn’t need a lot but more than a typical hotel room. Therefore, two thirds of our booked listings were actually private rooms rather than the entire home.
The average booked price for a private room is about $767 with the high around $1200 and the lowest around $550. The average rent in Austin at the time was about $663. Therefore, you could have expected to get 13.5% above the price of a typical annual lease. The remaining third of our booked listings were booked as the entire place. The average booked price of an entire home was about $1800 with a few exceptions that are either below $1k because they’re categorized as a tiny home or over $3k for much larger homes. The average rent in Austin is $1550. Therefore, you could have expected to get about 14% above the price of a typical annual lease for an entire home.
Pandemic Monthly Rental Trends Austin became a hot spot for new movers once the pandemic. The appeal of an up and coming city without the high rental costs of New York City or San Francisco. As more people moved to Austin, rental pricing started to steadily increase. Currently the average rent in Austin is $1,690 with about a 27% increase in rent year over year.
The pandemic also radically changed the type of booked rentals at Homads as well. Previously we had two thirds of booked rentals as private rooms and only a third were booked as the entire place. With social distancing, we noticed that about 80% of our bookings were actually the entire place and it’s been slow for private rooms to catch up since then. The average booked price for a private room with the recent rent increase is about $823. The average rent in Austin for a private room is $766. It’s difficult to tell with the new increase as few people are renting private rooms at this time and we don’t have substantial data to show the average private room price.
The average booked price of an entire home with the recent rent increase is about $2286. The average rent in Austin for the entire home is about $1850. You can expect to make about 19% above the typical annual lease for an entire place.