Short-term rentals, such as AirBnB, have become extremely popular in a short amount of time. As a result, many people see this as a way to earn income or build a new business. However, there are some things to think about prior to getting into this industry. Most notably, the initial surge in this industry is already beginning to fade. Here’s why:

• The business model is new. Since this is a new business model, there is no history of what to expect within the industry. That makes it difficult for people to plan for changes in the industry, such as natural ups and downs, or other considerations that have not exposed themselves yet. As a result, it can be difficult to know whether a rough spot is a normal part of the business or a sign to get out of the business.
• The competition is minimal. While this may seem like an advantage, it may not be. Fewer competitors now mean higher profits, but as the industry continues, more and more competitors will emerge. That means that existing companies, such as Airbnb, will see a decline in profits rather than maintaining them.
• Regulations are risky. Since this is a new business model, industry regulations are emerging and changing quickly. Society is still working on what standards should be within this industry. That can make it difficult to maintain regulations for those working in the industry and could result in accidental violations by not keeping up with regulatory changes.

Though short-term rentals is a good business idea, it is important to think carefully before getting into the industry. The first wave of interest is beginning to fade and, until the industry becomes more stable and regulated, there will be substantial risks in getting involved. While this does not mean the industry should be avoided, it is important to do a lot of research before getting started.