- reAlpha seeks to provide retail investors with fractional ownership in lucrative short-term rental properties
- The short-term rental market has seen a significant rise in popularity, with Airbnb recently releasing record revenues during its second-quarter results briefing
- reAlpha sees an opportunity to meet consumer demand by deploying as much as $1.5 billion to create a short-term rental property portfolio numbering close to 5,000 properties
- The company’s goal is to democratize investment access to the sector while simultaneously generating higher yields offered up by short-term rental properties
In early August 2021, Airbnb (NASDAQ: ABNB) reported second-quarter revenues that astounded the market. Revenues in the second quarter of 2021 came in at $1.34 billion, nearly four times higher than in the equivalent period in 2020, and up 10 percent over 2019. The quarter also heralded both Airbnb’s “strongest quarterly revenue on record” as well as its single “biggest” night of bookings.
reAlpha is a cutting-edge technology company launching a platform to democratize the real estate market. The innovative startup plans to do so by providing retail investors with the ability to invest in the $1.2 trillion short-term rental market, capitalizing on the growing popularity of the Airbnb platform in diversified short-term rental property portfolios (https://ibn.fm/uE6mA).
Dublin, Ohio-based reAlpha recently announced plans to spend as much as $1.5 billion, including debt, to build a unique and geographically diversified short-term rental portfolio, with reAlpha Chief Executive Officer, Giri Devanur stating that the deployed funds would be enough to purchase roughly 5,000 homes (https://ibn.fm/jzF9I).
The company will employ proprietary artificial intelligence software to evaluate existing home listings and garner appropriate property valuations. Initially, the company will target specific cities in Florida, California, and Texas, where it can rapidly scale, acquiring between 100 to 500 homes. The company has also revealed that it will seek ways to lower its acquisition expenses, including potentially purchasing homes from the wholesale real estate market, which currently is only available to large-scale buyers.
“We can analyze thousands of properties in a minute. For us, everything is through technology” Devanur said.
A recent study from the University of California, Los Angeles (https://ibn.fm/3xxZI) sought to delve deeper into the historical total returns of single-family home rentals in the United States. The study, which covered a nearly 30-year period between 1986 and 2014, found that real estate investments delivered a near 8.5 percent total annualized return, comprising 4.2 percent rental income and 4.3 percent price appreciation. However, in certain locations, opting to rent out properties on a short-term basis could lead rental yields to more than double.
Through its proprietary platform, reAlpha will seek to provide retail investors with access to the superior returns linked to short-term rentals as well as to the potential capital appreciation drawn from a combination of property renovations and market appreciation.
Giri Devanur elaborated on the company’s objectives: “reAlpha enables superior alpha yield by investing in short-term rental properties. We have simplified the entire process of investing and managing these properties using advanced technologies. This allows ‘Mainstreet’ investors to access the real estate investment market like never before,” (https://ibn.fm/7KqwM).
For more information, visit the company’s website at www.reAlpha.com.
NOTE TO INVESTORS: The latest news and updates relating to reAlpha are available in the company’s newsroom at https://ibn.fm/reAlpha
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