Andes STR Raises First Fund to Buy Short-Term Rental Properties

The company states this is one of the first funds to provide investors with access to the short-term rental market.

Written by Jeff Rumage
Published on Jul. 11, 2022
Andes STR Raises First Fund to Buy Short-Term Rental Properties
Andes STR
Image: Andes STR / Built In

An Austin startup that wants to turn short-term rentals into an investable asset has raised its first institutional fund, which it will use to purchase more than $25 million worth of single-family homes in Orlando.

Andes STR, which was one of five early-stage companies featured in Built In Austin’s Future 5 series, was founded in 2019 by CEO Sebastian Rivas and Chief Investment Officer Matías Duhart.

Rivas, who comes from a real estate investment banking background, has said the availability of short-term rental properties is stifled by the lack of investment. By turning short-term rentals into an investable asset, he hopes to increase the availability of fully-furnished short-term rentals.

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The company’s proprietary machine learning technology helps to identify properties with the highest likelihood of outperforming the market, Rivas said.

“It is incredibly hard to invest in Airbnb-style short-term rental real estate at scale, so we launched Andes STR to leverage cutting edge technology to help real estate investors enjoy the anticipated attractive returns that short-term rentals can provide,” Rivas said in a statement. “This fund demonstrates that investors want to invest in the asset class and find our turnkey solution, which leverages our award-winning technology, appealing.”

Rivas told Built In that this is one of the first funds to provide investors with access to the short-term rental market.

“This is opening up the floodgates,” he said. “This is normalizing short-term rentals as an asset class.”

Rivas believes this is the first fund to offer short-term rentals as an investable asset to international investors. The fund was created in partnership with WEG Capital, a global investment firm based in Chile. Rivas and Duhart are both from Chile. Duhart still lives there, but Rivas lives in Austin.

Guillermo Arriagada, a partner at WEG Capital, said in a statement that short-term rentals proved to be popular with investors amidst inflation and stock market volatility.

“In this period of economic turmoil, our clients have expressed strong interest in these assets that provide an inflation hedge with attractive upside and strong downside protection,” Arriagada said.

Andes STR expects to begin purchasing properties this month. The fund will double the company’s valuation and allow it to hire roughly 20 new employees, according to Rivas.

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