Today we're talking about an unexpected outcome from the FIFA World Cup, one that contains an important lesson for every real estate investor.
Many short-term rental owners expected the World Cup to be a once-in-a-generation windfall. The assumption seemed obvious. Millions of fans would travel to host cities. Hotels would sell out. Short-term rentals would be scarce. Nightly rates would soar.
But that's not what happened.
Across several host cities, property owners are reporting that demand has fallen far short of expectations. In some markets, hotel occupancy is lower than anticipated, and short-term rental operators are aggressively reducing rates to fill vacant nights.
The question is "Why?"
The answer comes down to a principle that every investor should understand. Price is not determined by demand. Price is determined by the relationship between supply and demand.
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