Amazon.com Inc (NASDAQ: AMZN) founder Jeff Bezos made an early bet on the short-term rental platform Airbnb Inc (NASDAQ: ABNB) during the company’s Series B round in 2011, nearly a decade before its initial public offering (IPO).
His investment came long before the now popular accommodations marketplace was a household name and a common term used to describe virtually any short-term rental.
It’s unclear exactly how much Bezos profited off his pre-IPO investment in Airbnb, but it’s clear that the billionaire investor had incredible foresight as to where the vacation rental market was headed.
More recently, Bezos’ investment activity suggests that he’s looking to profit from the other side of the vacation rental business – the real estate investments.
Bezos was one of several high-profile investors to participate in Arrived Homes’ seed round in 2021. Arrived Homes is a real estate investment platform that allows retail investors to become fractional owners of single-family rental properties with an investment of $100 to $10,000.
Less than a year later, Bezos made an additional investment in Arrived Homes’ $25 million seed round, just before the company publicly announced that it was going to be expanding its offerings to include short-term rental properties.
The company has already begun acquiring properties to be rented out to travelers on Airbnb and is expected to make the first batch available to investors on its platform sometime during the third quarter of 2022.
However, new investors may have a difficult time purchasing shares of the first batch of vacation rentals considering how quickly Arrived Homes has been funding the single-family properties on its platform. Existing investors have been the first to get access to new offerings and the same will likely be true once the short-term rental investments go live.
Short-Term Rental Market
Bezos’ renewed bet on the short-term rental market is looking promising for the tech entrepreneur turned venture capitalist. Airbnb reported its highest profit during the second quarter of 2022 and an all-time quarterly high of 103.7 million nights booked. Quarterly nights booked were up 25% year over year and average daily rates were up 1.7%.
With an average daily rate of $164, it’s no wonder that short-term rentals are becoming such a popular asset class among investors. According to the real estate investment platform Here, vacation rentals generate up to 160% more revenue on average than traditional long-term rentals.
Here has funded five vacation rental properties through its platform so far at a price of $1 per share and currently has one live offering for a property in Santa Fe, New Mexico.
Browse fractional real estate investments on Benzinga’s Real Estate Offering Screener and find investment opportunities that match your specific criteria.
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