A 70-year-old Phoenix real-estate agent explains why she converted her 4 Airbnbs into long-term, furnished rentals. 'It's the most overheated market I've ever seen.'

• Real-estate agent Peggy Gascon flipped all of her four Phoenix-area Airbnbs into long-term rentals.
• She appreciates the "peace of mind" and stability as the short-term market shifts.
• Gascon keeps her rentals furnished, and is open to changing back to shorter rentals in the future.

Real-estate agent Peggy Gascon purchased a four-bedroom Scottsdale property in 2018 and set it up to be a "primo Airbnb" with a pool table, bocce court, putting green, and outdoor pool, she said.

Today, however, it's rented to four recent college graduates who live in it year-round, each paying $1,125 a month.

"I've been at this long enough to know markets go up, markets go down," she told Insider of her decision to switch.

Gascon, 70, has been in the real-estate business for 30 years and sensed over two years ago the tides were turning on short-term rentals. She blames a glut of supply and investors who paid triple the price compared to what she paid five years ago.

"They're basically overcooking the supply," she said of the Phoenix area. "It's the most overheated market I've ever seen in my career."

Gascon is just one host dealing with the shifting tides of the short-term rental market. Travelers are still booking some Airbnbs and Vrbos, but a glut of supply has made it a cruel, indecipherable summer for hosts.

Phoenix, especially, is a testing ground for the new normal in short-term rentals, as the market saw Airbnb and Vrbo listings quadruple to 21,000 in 2023, from 5,000 in 2017, according to short-term rental analytics site AirDNA.

Switching to long-term rentals is one way Gascon decided to stay afloat among diminishing returns. She explained to Insider how she made the switch.

She sensed a shift in the market two years ago

Gascon owns four properties: three single-family homes she purchased all in the $400,000 to $500,000 range in 2018, and a townhouse she purchased for $274,000 that same year.

She first sensed a shift in the market two years ago, as she watched investors pay up to $1 million for similar properties.

"People caught fire with this whole idea of Airbnb," she said. Although she believes most hosts are seeing less revenue, she thinks those that bought at the height of the market are feeling more pain.

Then, her bookings began to drop. At its peak, her townhouse was bringing in $10,400 a month in 2017. In April 2023, bookings totaled just $2,000.

Gascon also believes the burst of travel after the lifting of COVID-19 restrictions has calmed down, making the "combination of all these factors" not sustainable for her short-term rental properties.

'I haven't given up on the concept, I just don't think I want to play right now'

Gascon first took one of her properties offline in the summer of 2021 and wasn't exactly sure what she would do with it. But through the grapevine and her network of fellow real-estate agents, she was approached by a group of four recent college graduates in their 20s who were looking for a year-long lease.

At first, she was apprehensive. Though now, after two years, they have proven to be reliable tenants.

"I usually consider males in their 20s to be the most irresponsible people alive," she said.

All four of her short-term rentals are now rented out long-term, having converted the last one in May. It gives her "peace of mind," Gascon said.

"It's stable. When I rent something myself, I'm getting $4,500 a month. With a property manager, that needs to come up to $5,700 to make up the 20% management fee," she explained. The market wasn't providing enough income to make the added expense of maintaining the short-term rentals worth it.

Gascon still pays for landscaping and pool services, but her long-term renters pay for the utilities.

She is determined to keep the units as long-term, furnished rentals, and turned down offers initially to rent them unfurnished. She believes one day she might return to short-term renting on Airbnb and Vrbo if the market becomes more favorable.

"I haven't given up on the concept, I just don't think I want to play right now," she said.