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Unveiling the Best Investment Strategy: Analysing Real Estate Investors' Yields in Short-Term Rental vs Tokenisation

Writer's picture: Angelos TsigkopoulosAngelos Tsigkopoulos

Unveiling the Best Investment Strategy: Analysing Real Estate Investors' Yields in Short-Term Rental vs Tokenisation




By Angelos Tsigkopoulos

Founder & CEO, Diorasis Group

Keynote Speaker at The International Negotiations Conference, NegotiCON 2025



Real estate investing is changing fast, with two popular strategies gaining traction: short-term rental and tokenisation. Both methods offer distinct opportunities and challenges for investors aiming to boost their yields. We will attempt to compare these strategies, examining their potential returns, risks, and suitability for a variety of investors, including The Decision Maker investment club.



Understanding the Short-Term Rental Market


Short-term rentals, often found on platforms like Airbnb and Vrbo, have revolutionized how people book accommodations. Investors are increasingly attracted to this model as it offers a chance to earn significant returns.


Higher Daily Rates: Property owners can rent their spaces for short periods, often achieving nightly rates that are three to five times higher than traditional long-term leasing. For instance, a property in a tourist hotspot can demand $150 a night versus only $800 for a month as a traditional rental.


However, managing a short-term rental involves much more than just setting a price. Investors must ensure their properties are clean, well-maintained, and responsive to guest needs. Research shows that properties with high ratings on these platforms can achieve an occupancy rate of 70% or higher.


This diverse audience includes tourists, business travellers, and families, making short-term rentals a versatile investment. Yet, investors must remain competitive by continuously improving their offerings and managing reviews.


Wide angle view of an inviting short-term rental property
A cosy living area of a short-term rental showcasing a homey atmosphere.

Yield Analysis: Short-Term Rental Profitability


Understanding the profitability of short-term rentals requires a closer look at several key factors, such as location, property type, and market demand.


High-Demand Locations: Properties situated in urban centres or near tourist attractions can offer exceptional returns. For example, a well-managed short-term rental in New York City can generate over $1,500 monthly compared to a traditional unit yielding $1,000.


While the profit potential is attractive, investors must also consider challenges such as seasonal fluctuations in demand, regulatory changes, and costs such as cleaning and maintenance. According to a survey, 30% of short-term rental investors faced issues with local ordinances affecting their ability to operate. Staying abreast of these regulations is essential to avoid financial setbacks.


Being informed is crucial in this fast-paced market. Effective management strategies and dedication can significantly improve occupancy rates and profitability.


The Rise of Tokenisation in Real Estate


Tokenisation is an emerging trend in real estate, employing blockchain technology to create digital tokens that represent ownership shares in a property.


This innovation opens the door for smaller investors to access high-value assets, democratizing the investment landscape.


For example, an investor can purchase a $100,000 fraction of a $5 million property, allowing them to join in on lucrative investments previously reserved for wealthier individuals.


Transparency is another significant benefit. By using blockchain, tokenisation securely records transactions, making it easier to trust the validity of the investment. Recent studies indicated that the adoption of tokenisation could increase liquidity in real estate markets by up to 90%, allowing faster buying and selling.


Close-up view of a blockchain network symbolizing tokenisation in real estate
A high-tech representation of blockchain demonstrating the concept of tokenisation in real estate.

Yield Analysis: Tokenisation Profitability


Tokenised real estate yields can vary based on the asset and market factors. Investors benefit from property appreciation, rental income, and possible dividends through token management platforms.


Lower Entry Barriers: One of the appeals of tokenisation is that it allows investment with lower initial amounts, making it easier to diversify portfolios. An investor might buy a few tokens at $50 each to gain exposure to multiple properties instead of needing tens of thousands of dollars upfront.


Additionally, tokenisation usually involves lower transaction fees, encouraging frequent trading. However, it is still a nascent field. Challenges like unclear regulations and differing interests among token holders can complicate investment decisions.


Investors must exercise caution and thoroughly assess the credibility of platforms before jumping in, as the landscape continues to evolve.


Comparing Yields: Short-Term Rental vs Tokenisation


Comparing yields between short-term rentals and tokenisation depends largely on individual investor goals and market conditions.


Short-term Rentals: The pros include the potential for high returns driven by favourable location and demand. But they also involve complex management tasks and legal compliance. Earnings can vary seasonally, making it important to implement robust occupancy strategies throughout the year.


Tokenisation: This strategy offers fractional ownership, increased liquidity, and transparency. It may require less hands-on management, appealing to those who prefer a more passive investment style. However, investors must manage uncertainties related to asset evaluations and changing regulations.


Short-term rentals may be ideal for proactive investors looking to maximize daily earnings, while tokenisation suits those aiming for a diversified and less intensive approach.


Key Factors Influencing Your Decision


When weighing these two investment strategies, consider your unique goals, risk appetite, and available time.


  1. Investment Goals: Think about whether you're aiming for immediate income or long-term growth. Those seeking quick returns may find short-term rentals to be a better fit, while those focused on sustained growth might prefer tokenisation.


  2. Time Commitment: Managing a short-term rental can be time-consuming. If you have limited time to spare, tokenisation can provide a more hands-off investment option.


  3. Market Conditions: Keep an eye on local factors that influence the rental market, like tourist seasons or new regulations. Understanding these dynamics is key. Tokenisation's performance will also depend on broader acceptance of blockchain technologies by the market.


  4. Risk Tolerance: Be honest about how much risk you are willing to take. Short-term rentals can see income fluctuations, while tokenisation faces uncertainties stemming from regulatory developments.


Eye-level view of a financial chart analyzing real estate investment yields
A clear financial chart illustrating the yield comparison between short-term rentals and tokenisation.

To Summarise...


Both short-term rentals and tokenisation are viable options for real estate investors looking to enhance yields. Understanding each strategy's features, benefits, and challenges is essential for making informed choices.


Consider your goals, risk appetite, and available resources while remaining flexible in adapting to the ever-changing investment landscape.


The ideal investment strategy is ultimately a blend of personal circumstances and market conditions. Staying informed and adaptable will be vital to success in this evolving field.

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