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

Large-scale investors want to take advantage of proven business model

National /
Jun.June 28, 2021 01:30 PM
ReAlpha CEO Giri Devanur (Giri Devanur, iStock)

ReAlpha CEO Giri Devanur (Giri Devanur, iStock)

Invigorated by Airbnb’s success, more investors are entering the short-term rental market.

Ohio-based asset management company ReAlpha plans to spend as much as $1.5 billion to buy short-term rentals, Bloomberg News reported. The amount is enough to purchase about 5,000 homes, Giri Devanur, the company’s CEO, told the outlet.

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

“The business model has been proven, and now the opportunity is to do this at scale,” Scott Shatford, CEO of AirDNA, which provides data and analytics to the industry, told Bloomberg News. “People can’t figure out how to deploy capital quickly enough.”

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

“We can analyze thousands of properties in a minute. For us, everything is through technology,” Devanur told the outlet.

Buying homes for short-term rentals is complicated by a shortage of housing inventory that is now at its lowest. In addition to individual homebuyers, short-term rental investors will have to compete with Blackstone Group or KKR, which aims to buy billions of dollars worth of houses to operate single-family home rentals — another popular area for investment.

Having larger scale investors listing more homes on its platform could benefit Airbnb as its users may have options that aren’t currently available. An Airbnb representative declined to comment.

[Bloomberg News] — Akiko Matsuda





    Related Articles

    arrow_forward_ios
    Aria Development Group's David Arditi and YotelPad Miami (YotelPad Miami, Aria Development Group, iStock)
    YotelPad Miami owners discover they can’t rent their units out daily as promised
    YotelPad Miami owners discover they can’t rent their units out daily as promised
    David Arditi with YotelPad (Yotel) Condos, Miami
    David Arditi completes long-delayed YotelPad tower in downtown Miami
    David Arditi completes long-delayed YotelPad tower in downtown Miami
    The Villa Paradiso at 1415 Collins Avenue and The Orchid House Hotel at 1350 Collins Avenue with Randall Smith of Alden Global Capital and Joe Nakash (Getty, Wikipedia)
    Boutique South Beach hotels trade amid heightened demand
    Boutique South Beach hotels trade amid heightened demand
    South Florida by the numbers: Miami developers stay nimble
    South Florida by the numbers: Miami developers stay nimble
    South Florida by the numbers: Miami developers stay nimble
    From left: Edgardo Defortuna of Fortune International Group; Marcelo Tenanbaum and Jorge Savloff of Blue Road; along with a rendering of Nexo (Elephant Skin, Blue Road)
    Blue Road, Fortune launch short-term rental-friendly condo project in North Miami Beach
    Blue Road, Fortune launch short-term rental-friendly condo project in North Miami Beach
    Rishi Kapoor, Eric Fordin, Suzanne Amaducci-Adams with The Crosby and Urbin
    Investors flock to short-term rental condo projects in Miami
    Investors flock to short-term rental condo projects in Miami
    Torres Properties' Brook and Christina Torres, Adagio Condominium's Anil K. Monga and Adagio Condominium at 7939 East Drive (Susan Gale Group, Torres Properties, LinkedIn)
    Mobile home park moguls buy entire North Bay Village condo building for $17M
    Mobile home park moguls buy entire North Bay Village condo building for $17M
    Raz Ofer with 1568 Drexel Avenue (Dade County, Google Maps)
    Miami Beach apartments mired in ownership dispute slapped with $1M foreclosure
    Miami Beach apartments mired in ownership dispute slapped with $1M foreclosure
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...