Last Updated on September 15, 2023 by asifa
Any investor knows that putting all of your eggs in one basket is a bad idea. A diversified investment portfolio, then, can help you if the market goes off the rails a bit. Passive investments, or letting someone else do the heavy lifting while you enjoy the results, may be the opportunity you’re looking for. One of the newest asset classes for passive investors is STRs (short-term rentals). At the center of it is Techvestor, whose institutional grade, proprietary rental platform analyzes over 18MM data points each month, identifying what, where, how, when, and if an investment should occur. With 100k properties underwritten every month, over $37MM raised, and 75+ properties in its portfolio, Techvestor is defining passive investments in STRs. Below, COO Sabrina Guler and CEO Sief Khafagi, the co-founders of Techvestor, explain more about passive investments, including what to look for in a legitimate opportunity, and why Techvestor is set up for success.
“Passive investments, particularly in STRs, only work if the company is solid all the way through, from its leadership to its operations,” says Guler. “If you are considering investing passively in anything, including short-term rentals, your first task should be to look at the people behind the business. Sief and I could never have taken Techvestor to the top of the industry if we hadn’t been independent investors first. That hands-on training gave us the ability to identify, refurbish, and manage STRs across the United States.”
From there, Khafagi recommends making sure that the company has a comprehensive, repeatable process for optimizing every property it identifies and brings into its portfolio. Before they even bought their first STR, he and Guler created a realistic framework for Techvestor so that everything could be handled independently of investors. They designed software that pinpoints the right properties for Techvestor’s portfolio, meaning they know what to buy, where to buy it, how to best finance it, how to operate it, if the property is in a sustainable market, and what realistic growth looks like.
“We also designed a 16-point strategy for analyzing the potential of both a property and its location,” Guler continues. “We look at everything: uniqueness, seasonality, tax benefits, diversification, and STR-friendly states, among other crucial factors. All in all, we analyze millions of data points and 250+ markets monthly.”
That’s at the office, of course. On site, Techvestor’s project managers draw upon a local network of contractors and professionals to transform homes from ordinary to spectacular. Khafagi adds that they are careful to add amenities that will give the property longevity in a saturated market, including hot tubs, fire pits, and other perks.
“So, yes, we have set Techvestor up for passive investors, but at the same time, we believe in transparency so that they can know how their investment is doing,” says Khafagi. “That’s why we are careful to explain all of the terms before onboarding an investor and to keep them up to date as time goes by.”
Passive investors in Techvestor receive 100% of tax benefits, have zero liability for loans and lending, and have instant diversification with over 75+ properties. During the first five years that Techvestor holds a property, investors receive quarterly reporting and dividends, and the company targets a 7-12% cash on cash annually. After the projected hold period, Techvestor looks to sell the portfolio based on revenue or value, whichever is higher.
“As a passive investor, you want to make sure the company is healthy across the board,” says Khafagi. “Additionally, you want to be certain the market itself supports investments. 34% of people prefer short-term rentals, up from 10% in 2011. People are also interested in STRs because of the culture change to remote work. It has created a new asset class that Techvestor is defining.”
There is, of course, no guarantee of success no matter how well-prepared a company may be. “That’s true,” Guler allows. “However, at Techvestor, we believe that our meticulous preparation means that we know how to roll with the punches and come out on top. That’s why in 2023, we will be moving into Fund 2 and expanding our STR portfolio across the U.S. We know STRs, and our passive investors trust us to choose the right properties and develop them into winners.”
Techvestor is the leader in passive investments in STRs in the United States. It was co-founded by Sabrina Guler, a former Engineering Project Manager at Apple, and Sief Khafagi, who worked at Facebook/Meta and was a Forbes Business and Young Entrepreneur Council Member. Guler and Khafagi have grown Techvestor’s portfolio to encompass STRs across the United States, resulting in seven and eight figures in commitments and LOIs. In 2023, Techvestor will continue to expand, listing more properties in Southern Florida and other hot markets. For more information, please see www.techvestor.com.