How to Create Passive Cash Flow from Short-Term Rentals

Many people think traditional real estate investing is the best way to generate passive income and create financial freedom.

It’s not. Short-term rentals are way better.

Why? Because with the right property and the right management, the daily income potential for a premium short-term rental far exceeds the daily income potential of a long-term rental.

Keep the property booked up and the guests happy, and you have more income from the same property.

Best of all, platforms like Airbnb and VRBO make it easy to operate a property as a short-term rental, cutting into a market once exclusively dominated by the hotel industry.

So why isn’t everyone doing this?

Put aside for a second the fact that if every home was a short-term rental, people would have no place to live.

Short-term rentals have several built-in challenges that make investors reluctant to enter the space, despite the huge profit potential …

• Finding the Right Property. Not every property is an ideal short-term rental. The most successful short-term rentals are in popular areas — resort towns or major city centers, near universities and tourist attractions. Ideally the vacation rental is comfortable and luxurious enough to tempt a guest away from a hotel … or cheap enough for the budget conscious (which is bad for the landlord).
  
• Affordability and Investability. Prime vacation rental real estate tends to be elite real estate — near colleges, entertainment districts, museum districts, tourist districts, beaches, parks, etc. The land is in high demand … meaning the property commands high prices. The barrier to entry is high — meaning only the wealthy need apply.
  
• Managing the Property. There’s no denying that short-term rentals are more management-intensive than long-term rentals. As opposed to having one tenant that you can put in place and largely forget, guests are constantly coming and going, constantly asking questions and requesting services, with constant maid service and repairs between each guest. The cash flow is higher … but it’s hard to see it as “passive.”

So investors are left with two choices (neither of them good):

1. Pay through the nose and sacrifice all their spare time in hopes for the extra income of a short-term rental …
   
   … or …
   
2. Give up and settle for the lackluster cash flow potential of a long-term rental.

It’s easy to imagine an investor saying “By any chance, is there an Option #3?”

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There is — fractional short-term rental investing.

With fractional ownership, your cash flow truly is passive — even with a management-intensive strategy like short-term rental.

Ruebush Group offers fractional ownership interest (that is, partial ownership interest) in short-term vacation rentals in the beach resort city of Batumi, Georgia — not well known of the world stage, but growing in stature … meaning the real estate is affordable right now, but will grow in value over time.

The fractional ownership interest means you can buy part of the property for a reasonable entry price (starting around $5,000, far below what it usually costs to enter the vacation rental market). This purchase price could get you a single room in a hotel, part ownership in a larger, high-end beach house, or anything in between.

Ruebush Group retains an ownership interest plus fees, and in exchange for that compensation we run the entire deal for you. That includes:

• Locating the asset.
• Negotiating the sale.
• Performing due diligence.
• Closing on the property.
• Renovating and furnishing the property.
• Setting up guest services.
• Renting the property out to guests.
• Handling all cleaning, maintenance, and repairs.
• Selling the property at the appropriate time.

Ruebush Group has been doing this since 2013. In that time, we have produced significant passive return on investment for our private investors:

Average Annual Returns (all properties)

2018 15.08%
2019 12.11%
2020 8.38%
2021 14.13%
2022 20.91%

Fractional ownership of Ruebush Group short-term rental property in Batumi gives investors access to both expected and unexpected benefits, including:

• Affordability. Fractional ownership enables investors to acquire positions in premium short-term vacation rental property at an affordable price — starting at $5,000 as opposed to tens of thousands of dollars.
  
• Passive Cash Flow. Because Ruebush Group does the hard work, your fractional share of the rental income is truly passive cash flow — the key ingredient of financial freedom.
  
• Sale Profits. When Ruebush Group sells the property, your fractional ownership interest entitles you to a fractional share of the proceeds from that sale — including any profits in excess of the original purchase price and expenses.
  
• Hedge Against Inflation. Because property is a real asset, it tends to increase in value in step with inflation. Currency, by contrast, loses value to inflation. Fractional short-term rental ownership gives investors an easy way to get out of their rapidly depreciating cash and into real assets.
  
• Official Ownership of Real Estate. To make this ownership interest even better, Ruebush Group actually registers investors’ ownership of the real estate with the local government. You don’t just have “exposure” — you are actually one of the owners of records, giving you much more security and control.
  
• Diversification. Because the barrier to entry is lower, you are free to diversify your capital across many assets — including other Ruebush Group rentals, or any other assets you see fit.
  
• Liquidity. Because real estate is usually not a liquid investment, Ruebush Group goes the extra mile by offering a “buy-back” program — we will buy investors’ shares back from them at market rates, and even provide protections against volatility.
  
• Enjoyment. Where’s the fun in owning vacation property if you can’t use it to, you know, take a vacation? Ruebush Group gives owners free priority booking, so they can enjoy their own real estate investment any time they want.

Want to learn more? Ruebush Group has a limited inventory of Batumi short-term vacation rentals ready to start producing passive cash flow for investors right away. Click here to learn more about what we have to offer.