Investing in Luxury Vacation Rentals

The hard truth; most traditional CRE is broken. The economic drivers CRE investors have relied on for decades no longer hold up.

• AI disruption is eroding demand for office, retail, and workforce-driven CRE faster than models can adjust, valuations face inevitable downstream impacts and cascading erosion.

• Work-from-home has permanently reduced demand for office space and foot traffic for retail.

• Wage pressure & regulation threaten traditional rentals with defaults, freezes, and eviction bans.

• Hotels & resorts remain the most exposed in downturns and outbreak scenarios.

• Development risk is magnified by volatile costs and fragile valuations.

• Concentrated downside with most sectors moving in unison, offering little real diversification

The NPI shows years of negative appreciation across core CRE sectors—a clear signal of the structural challenges facing the market today.  

As Harvard Business Review put it: “U.S. Commercial Real Estate Is Headed Toward a Crisis.”

A bit dire? Maybe. But it’s worth serious consideration.

Unlike traditional CRE, which is tethered to corporate demand, interest rates, and cap rates, luxury SFL is anchored by UHNW drivers and scarcity in iconic markets.

• Near-zero correlation → values appreciate independently of yield and CRE cycle volatility

• A proven CAGR track record → that quietly outpaces the majority of CRE portfolios—without construction risk, cap rate compression, financial engineering, or institutional noise.

• Resilience through crises → our structural and operational frameworks have proven to cash flow even in during “doomsday” scenarios like COVID.

• Accelerated value appreciation → luxury home prices outpacing non-luxury by 60%+ from 2019–2023 (J.P. Morgan Private Banking).

• Resilient to AI → grounded in irreplaceable human demand for rare experiences and iconic assets.

Few, if any, other real estate asset classes have shown this level of resilience. 

If Luxury SFL assets are struggling, chances are everything else is struggling worse—it’s the ultimate risk-adjusted hedge.

And here are the two main reasons why:

In the architecture of generational wealth, not all assets are built to perform the same.

Some grow. Some hedge. Some preserve.

But a rare few can do all three.

Iconic, luxury single-family leisure assets exhibit near-zero correlation to core CRE cycles or macroeconomic trends. Anchored by alternative value drivers, they perform independently — and often outperform — across market cycles.

Traditional CRE is driven by:

• Corporate demand

• Interest rates, cap rates

• Supply chains 

• Urban migration

Luxury SFL is driven by:

• Global concentration of wealth among HNW/UHNW individuals

• Scarcity in irreplaceable leisure markets

• Growing demand for assets with experiential value

This asset class' exceptional resilience stems from the unique buyer and consumer demographics that drive it.

Luxury vacation homes are only accessible for purchase to ultra-high-net-worth (UHNW) individuals—the top 0.1% of the world’s wealthiest people—and accessible for rent to the affluent traveller demographic.

One of the only things that slows down luxury spending patterns during an economic downturn isn’t a lack of wealth—it’s social perception.

In challenging economic times, there can be a stigma around spending lavishly when others are struggling.

But once that stigma fades, luxury spending tends to bounce back at an accelerated rate, driven by the perception of scarcity, which only strengthens demand.

This cycle isn’t new, it’s a well-documented phenomenon.

It’s why Bernard Arnault, CEO of LVMH (Louis Vuitton, Dior, etc.), saw his company’s value nearly double in 2021. As soon as luxury spending became “acceptable” again post-pandemic, demand skyrocketed.

The same pattern holds in luxury SFL markets, where buyers, sellers, and affluent travellers operate largely independent of macroeconomic pressures, and are the first to rebound after economic uncertainty.

Unlike other commercial real estate assets, where valuation is tightly linked to rental revenue, luxury vacation homes gain value differently.

Luxury SFL assets can generate cash flows akin to boutique hotels as a significant value driver, with their own multiple reflecting their distinct contribution to valuation. 

However, their value isn’t driven solely by income potential or cap rates—it’s also fueled by inherent, accelerated appreciation that operates independent of rental yield.

That means they offer downside protection similar to the single-family rental (SFR) market but with even stronger long-term growth potential.

Luxury SFL assets in high-barrier-to-entry, outperforming markets will command significant and stable growth in intrinsic value, as much as 60% faster than non-luxury homes.

This unique hybrid profile offers a resilience and risk-adjusted upside that most real estate investments don’t.

Luxury single family leisure (SFL) is an emerging asset class with significant opportunities for sophisticated investors.

But generating strong profits with luxury vacation rental assets requires more than just capital.

It demands specialized expertise, a scalable revenue strategy, and operational precision.

The luxury SFL asset class is distinct, existing in its own category, with unique fundamentals.

The deadpool of well-funded investments proves the cost of ignoring its fundamentals—billions in capital wasted under operators with ill-suited models, flawed assumptions, and a fundamental misunderstanding of how value is created in this asset class.

And that’s a good thing.

Barriers to entry keep competition out, and asymmetric upside in.

The number of operators with a proven track record of consistently delivering strong asset-level returns in this space is rare.

What we do at Jack Laurier is complex, difficult, and it took years to refine.

If we just consider the 4 most recent luxury properties we’ve taken on:

2025 marks 16 years in luxury real estate and vacation rentals for me, with experience spanning nearly every vertical in the space—from platforms and advisory to operations, asset management, marketing, and acquisitions.

Assets under our stewardship consistently rank in the top 1% of their markets, and have achieved:

• Gross Rent Multipliers as low as 4x

• Gross Margins above 50%

• Double-digit cash yields

If we just consider the 4 most recent luxury properties we’ve taken on:

4 different properties, 4 different countries, 4 distinct markets.

Each ranked in the top 1% of highest-grossing homes in its region.

The odds of that happening by chance?
1% × 1% × 1% × 1%—a vanishingly small probability that it’s luck.

I can say with conviction: we know how to replicate success.

Our proven marketing and asset management frameworks deliver a return profile that few can match.

They’re predictable, repeatable, and they work because they’re built on timeless principles of luxury real estate.

And these aren’t isolated outcomes.

Our team has 25+ years of combined experience, operating over $150M in luxury SFL real estate, spanning 36 markets throughout the Americas, Caribbean, Europe, and Southeast Asia—building deep expertise in every phase of the luxury SFL investment cycle.

The difference is discipline—applied globally, executed locally.

That’s the advantage we bring, and where others fall short.

The best returns don’t come from cycling post-tax gains or missing out on upside between commoditized deals.

They come from:

• conviction before consensus

• uninterrupted compounding

By the time a market segment becomes “obvious,” the asymmetric upside is already gone.

Under the right market conditions, a $4M vacation rental operating at a 6X GRM with a 50%+ margin can pull in seven figures in just a few years—purely from cash flow.

And that’s before factoring in:

• 8%+ CAGR in top luxury markets

• High-yield property improvements

• The added value of a multi-six-figure operation

• Portfolio scale value

Today, luxury vacation rentals remain an emerging asset class, still inefficient, still underdeveloped, with very few operators truly understanding how to maximize returns in the space.

Which makes it one of the most compelling asymmetric opportunities left in real estate right now.

It’s not for everyone. But for the few who get it early, it’s the kind of opportunity that doesn’t come around twice.