Short-Term Rentals Trend Upward, But At What Cost to Neighborhoods?

Anonymous | Updated 10/28/2021 12:00pm


In Dallas, as across the nation, the demand for homes with an additional rental property, or Accessory Dwelling Unit (ADU), is on the rise. In fact, 34 percent of agents nationwide saw more requests for properties with ADUs in their markets, according to a recent survey from the real estate experts at HomeLight. In our South Central region, that number is a bit lower at 27 percent. ADUs aren’t only for renters, however. They are also being added by homeowners for grandparents, adult children, guests, or to be used as home gyms or home offices. But what does having more ADUs for renters mean for neighborhoods, especially in Dallas?

ADUs are a hot topic for our city council and the rules for homeowners to follow to add this sought-after amenity are in flux. If you want to add an ADU to your property, you’ll need to jump through some hoops, and this can be a compelling reason for buyers to look for a home that already has an ADU if this is really on your wish list for your next home. With ADUs as rentals on the rise, the question is, does this really add value to a home, and does this feature have any effect on the desirability of your neighborhood? Let’s take a closer look at what real estate agents are saying about ADUs.

Tiny house, extra income

If you are thinking that an ADU can be an extra income source, you are not alone. Nationally, agents from the HomeLight survey reported that 29 percent of homeowners are talking about ADUs for long-term renters, while 32 percent are interested in short-term rentals (such as a vacation rental). Moreover, our region had the highest concentration of agents who have seen an increase in ADUs as short-term rentals, at 61 percent. 

Get your design on

Tiny houses are on-trend, and that means it’s all about small homes with top amenities. Agents shared the top three design features that an ADU owner can add to improve resale value: durable flooring such as waterproof laminate (recommended by 55 percent of agents); french doors, skylights, or clerestory windows (53 percent); and granite and name-brand appliances (47 percent). Homes with ADUs with a focus on design are likely to be the most desirable amenities when selling a property and for long-term renters.

Neighborhoods in flux

There are some compelling reasons to consider a long-term rental, instead of a short-term rental, which might seemingly bring in more income. While an ADU as a vacation rental can enable tourism in a neighborhood and bring in more than renting long-term, agents also shared that it could also devalue surrounding properties anywhere from 10 to 15 percent. Agents surveyed by HomeLight estimated that an owner-occupied property is worth up to 13 percent less in our region when surrounded by a high volume of short-term rentals — and that’s definitely worth considering.

Owning a property with an ADU has perks. It’s up to you to decide what you’ll use it for and whether you’ll want it to lead to a second income source. Talking to a real estate agent about the pros and cons can help you decide if a short-term or long-term rental is right for your ADU. 

Feel free to call your Housed Real Estate team at 214.888.6864 with more questions. We are here to help!

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