INVESTMENT STRATEGY - SHORT TERM RENTALS
Clark REI is building a portfolio of single family homes in drive-to vacation markets.
It is our goal to obtain exceptional properties where groups can have unique vacation experiences, provide hospitality level of service, with a focus on long-term wealth creation.
Crystal Clear Criteria
#1 - PROPERTY TYPE
#3 - PROPERTY CONDITION
#1 - PROPERTY TYPE
Single Family Homes
3+ Bedrooms, more is better
Home Office or Flex Space
2 Living Areas
Outdoor Space
Game Room
#2 - LOCATION
#3 - PROPERTY CONDITION
#1 - PROPERTY TYPE
Population Growth
Top 15 State
3 hour drive from major population
Closer the better
Views
Quick access to local amenity
#3 - PROPERTY CONDITION
#3 - PROPERTY CONDITION
#3 - PROPERTY CONDITION
Constructed since 2000
Property Manager approved
Top 10% in market inventory
Would do rehab if Land is available
#4 - PRICE RANGE
#5 - PROFITABILITY
#3 - PROPERTY CONDITION
Market dependent
#5 - PROFITABILITY
#5 - PROFITABILITY
#5 - PROFITABILITY
Cash Flow Positive Year 1
Cash Flow in Prime Season breaks even for year
The Case for Short Term Rentals
DEMAND > SUPPLY
DEMAND > SUPPLY
DEMAND > SUPPLY
From Q3 2021 AirBNB Earnings:
People can travel anytime
People are traveling everywhere
People are living on AirBNB
LIFESTYLE ASSET
DEMAND > SUPPLY
DEMAND > SUPPLY
Since there is vacancy, the Owner has the ability to utilize the property from time to time.
What other asset class provides this?
TECHNOLOGY
DEMAND > SUPPLY
LESS PRICE SENSITIVITY
Until recently, somebody would have to check on the property.
Now, we have cameras and thermostats connected to our smartphone. I can even open the garage from another state for a delivery.
LESS PRICE SENSITIVITY
LESS PRICE SENSITIVITY
LESS PRICE SENSITIVITY
Especially for large groups traveling to a destination for a prime season vacation.
This offsets the offseason vacancy risk.
NO CEILING
LESS PRICE SENSITIVITY
NO CEILING
Providing a unique experience earns a premium above the market due to:
Increased Occupancy
Increased Rates
The Big Picture
INTEREST RATES
INTEREST RATES
INTEREST RATES
Regardless of where they go from here,
they are historically low.
HOUSING SUPPLY
INSTITUTIONAL INVESTMENT
INTEREST RATES
Most vacation rentals are still run by local property managers and aren't utilizing technology to optimize the business. Many owners don't do upgrades or remodels.
POPULATION MOVEMENT
INSTITUTIONAL INVESTMENT
INSTITUTIONAL INVESTMENT
From reviewing the trends from 2010-2020, it is clear where people are moving. These trends were accelerated by the pandemic.
INSTITUTIONAL INVESTMENT
INSTITUTIONAL INVESTMENT
INSTITUTIONAL INVESTMENT
Institutional capital has not yet made its way into the short-term rental market. Once they do, there will be an ability to exit a portfolio at a reduced cap rate.
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