It's official: The FDA has given the green light to administer the Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) coronavirus vaccine on U.S. soil. Doses of the vaccine will be in short supply at first and will therefore be limited to healthcare workers and nursing home residents -- those said to be most vulnerable during the pandemic. But come springtime, the hope is that there will be enough available vaccine doses (whether from Pfizer or a competitor) to inoculate the general public (or at least those willing to roll up their sleeves). And that could, in turn, be a boon to real estate investors who rely on short-term rentals.
The vacation rental market could boom
Americans have, for the most part, spent the better part of 2020 camped out in their homes, bored and isolated from friends and family. Once a vaccine becomes widely available and travel restrictions lift, we're apt to see an uptick in short-term bookings as Americans are once again able to comfortably hit the road or board flights.
Of course, it's easy to assume the travel industry as a whole will pick up once mass vaccination efforts are underway. But short-term rentals may have an advantage over hotels for one key reason: They lend themselves to better socialization. For months, Americans haven't been able to safely spend time with family and friends. Once things improve, families will seek to reunite and friends will plan to gather. And vacation properties do a good job of making those things happen.
Travelers may also favor vacation properties over hotels because hotel rooms can be small and claustrophobic. After months of being stuck at home, those hitting the road won't want to experience anything that mimics the feeling of being cooped up.
Short-term landlords therefore have a prime opportunity to enjoy a revenue boost by the time the summer of 2021 rolls around. But to make the most of it, they'll need to market their homes strategically and invest in the right amenities. Owners of larger properties may want to cater to groups and families. That could mean investing in more common-area furniture or even restocking their board game cabinets. Those who rent out smaller spaces in major metro areas can give themselves an edge by offering superior amenities and experiences -- for example, by recommending local brewery tours so out-of-towners can hang like locals.
Short-term landlords will also need to keep their pricing competitive, especially since many travelers may be recovering from the financial impact of the pandemic by the time vaccines are widely deployed. And of course, flexibility with cancellation options will be a must, especially since the availability of a vaccine won't automatically put an end to the health crisis that's been plaguing the world since March.
The Millionacres bottom line
Still, the introduction of an effective vaccine is something short-term landlords should get excited about -- especially since the past number of months may have been sluggish from a revenue standpoint. As soon as the public gets the green light, domestic travel could really explode, and landlords with vacation rentals are in a great position to profit in the not-so-distant future.
In fact, real estate investors looking to expand their portfolios may want to buy vacation homes ahead of the post-vaccine boom. Though home prices are inflated these days due to limited inventory, getting in on that window could make paying those premiums worth it.