There's no question the pandemic has been a terrible time none of us will ever forget, no matter what happens next. But the impact on real estate investing hasn't been all bad. There have been winners and losers. For example, many rental property owners did not fare well. Between lockdowns and eviction moratoriums, that was true of both vacation properties and long-term rentals.
But for one rental start-up, the pandemic -- or more specifically, the remote work boom it ushered in -- turned things around in a good way.
More people than ever before were told that their remote work scenarios never had to end. Prior to the pandemic, a lot of people had chosen where to live based on their jobs. But now, suddenly, there was a great big world out there.
That said, just buying a home in your dream location, packing up, and moving could be scary. Why not test the waters first? That's where Zeus Living came in.
Tenants could rent for a few months while they got a feel for the area and decided how they felt about it. But in anticipation of a likely decrease in the number of workers packing up and moving to wherever they please, Zeus is expanding its target market. Here's a look at how Zeus Living works, who else the company is catering to, and what investors should know.
What's going on at Zeus Living?
According to TechCrunch, Zeus Living just raised $55 million in a funding round led by SIG and plans to put those funds toward expansion. Zeus saw what it calls a "6x increase" in leases booked without predetermined end dates over the past year, with an average stay of 129 nights.
Zeus Living differs from vacation rental websites like Airbnb and VRBO in a few big ways. First, while vacation rental platforms generally have a low minimum stay of one to three nights, a stay with Zeus Living is 30 days or longer.
And perhaps more importantly, Zeus manages the properties it offers, handling everything from guest screening and booking to maintenance and even providing attractive furnishings and decor. Meanwhile, landlords listing on the vacation rental platforms are responsible for all of their own property management.
Zeus had a rough time just prior to the pandemic, when it had to lay off about 30% of its workforce. But since 2019, the number of homes Zeus offers has nearly doubled to 5,000, offered in 96 cities.
Tenants can book a stay of a specific length or leave at any time with two weeks' notice.
Potential tenants can take a 3D virtual tour of any home Zeus offers. The company's average turnover per home is three months. The implication on the company's website is that this rental method is safer than staying in a hotel room, where many people have likely stayed recently.
Perks Zeus Living tenants can enjoy include:
Zeus also focuses heavily on location, making sure to only lease properties in the most desirable areas of each city. It's still heavily focused on corporate living. The three major audiences the company addresses on its website are potential tenants, property owners, and companies looking to house their workers for extended stays. Other groups Zeus caters to include:
- Grandparents spending extended time with their newborn grandchildren
- Patients seeking healthcare
- Families renovating their homes
- Younger people who are more concerned with flexibility and mobility than homeownership
The Millionacres bottom line
Zeus Living hit a rough patch a couple of years ago, but the remote work trend helped the company right the ship. Zeus is also looking outside the corporate box to make sure the company can sustain itself once the number of employees being made remote permanently begins to slow. That, combined with its growth over the past year and recent funding, bodes well for Zeus' future.
Many real estate investors shy away from rental property investing because they don't want to deal with all the potential property management headaches. If you agree with that sentiment and also like the idea of the higher rental rates properties with shorter rental terms tend to command, it may be worth your while to take a deeper dive into Zeus Living.