Published on 27, Feb 2023

Techvestor Explains What to Look For When Passively Investing in STRs

While investors have always known the long-term potential of real estate, a new asset class is gaining their attention: passive investments in short-term rentals. The hurdle for some people, however, is that many of the STRs they might invest in are in other states (along with the company). This creates a potential problem: how do investors identify a legitimate passive investment opportunity? The answer may lie in Techvestor, which owns the largest STR portfolio in the United States. Co-founded by COO Sabrina Guler and CEO Sief Khafagi, Techvestor underwrites 100k properties every month, has raised over $37MM, and has 75+ properties in its portfolio. The secret to Techvestor’s success lies in its institutional grade, proprietary rental platform, which analyzes over 18MM data points each month, identifying what, where, how, when, and if an investment should occur. In this article, Guler and Khafagi offer some suggestions for how to know when an STR passive investment opportunity is one to jump on - or walk away from.

“First, remember that any STR, no matter its potential, will inevitably underperform if not managed competently,” says Guler. “That’s the responsibility of the company’s leadership. Before starting Techvestor, Sief and I both gained invaluable experience investing independently in real estate while we worked at Facebook/Meta and Apple, respectively. When we founded Techvestor, we already understood how to manage STRs and were able to scale more quickly.”

When investing passively in a property, Khafagi believes the investor should have no responsibility at all for making it generate revenue. “That ability comes from the company having a strong program to identify and manage it,” he says. “Granted, every STR is different, but there still needs to be a repeatable process that folds it into the company’s portfolio.”

In designing Techvestor, Khafagi and Guler prioritized creating a comprehensive framework that would allow the company to handle everything 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 70+ 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.”

The most exciting time to jump on any passive investment opportunity is when it is first emerging, Guler believes. “We envision Techvestor becoming the go-to source of STRs around the world. Check us out sometime and learn more about the strong company we are building with the help of our wonderful investors. It’s a ride you don’t want to miss.”

About Techvestor

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.