We were both a bit surprised when we pulled up to what could only be described as a Lego-sized parking space, wedged between the retaining wall and someone’s trash bin. Fortunately, the rental was a Chevy Spark, possibly the smallest car on the planet. The fact that this car featured manual windows and door locks, modest engine power, and a manual transmission turned out to be almost prophetic — because our tiny room was a match. It was as if the Airbnb listing and the car rental company had co-conspired to create a “Minimalist Throwback Living” theme. To call it cozy would be generous. Only one of us could open a suitcase and that is if the other stood on the bed holding their breath.

Our weekend ended up being much of the same. A few days later, we left unshowered, exhausted and cold — with a large dent in the back of the Chevy Spark, courtesy of a mysteriously appearing pole that had somehow materialized directly behind our impossible parking spot. I made a bold announcement as we boarded the plane, “Let’s never book an Airbnb again.”

The business of short-term rentals has been a lucrative investment strategy for a while now. In fact, during its peak, it was almost too easy. These rentals provided great cash flow, low vacancies and once systems were in place, were easy to manage. Recently, however, they’ve become less desirable. Not because of the poor parking, nor the lack of amenities (our experience a rare one), but simply because of market saturation in some areas and over-regulation in others.

For those who invested in short term rentals at the beginning of the surge (between 2016-2021 in Utah), it was a veritable heyday. High demand and little supply resulted in great cash flow. Sadly, once the proverbial cat was out of the bag, investors poured in and scooped up properties for use as nightly rentals. As a result, supply has now surpassed demand in some areas.

Before the market reached oversaturation, however, the local cities and counties began to implement some strict regulations surrounding nightly rentals. The powers that be decided to apply rules like hotel taxes, primary resident requirements, limited permits and a number of nights per year maximum.

Before you retreat to your closet to cry over lost potential income, take a breath. There’s hope. The latest investment “hack” isn’t short-term rentals or luxury flips — it’s co-living. Co-living is more than just a buzzword. It’s a housing model that offers affordability, flexibility and community — three things cities are desperately short on, which means state and local governments are less likely to put strict regulations in place and would certainly be unable to justify banning it.

With co-living, you’re not displacing residents — you’re creating opportunities. You’re taking a single-family home and making it possible for five or more people to live affordably, often people who couldn’t rent an entire unit on their own. It’s a smarter use of space, and a direct response to the housing crisis — not a contributor to it. Renting each individual room separately creates a much higher rental income than leasing to just one person or a family. This could be a game changer for investors looking away from the past and into the future.

Now we just need a solution for the in-ground telephone pole located in the parking lot.

Jen Fischer is an associate broker and Realtor. She can be reached at 801-645-2134 or jen@jen-fischer.com.