Who's buying the houses? Investors amassing thousands of Airbnb rentals

Investors hunting for returns in the frenzied U.S. real estate market are tapping a new strategy: building massive portfolios of houses to rent out on Airbnb.

A recent filing reveals that Dublin, Ohio-based ReAlpha is seeking to spend as much as $1.5 billion, including debt, to buy short-term rentals at an unprecedented scale. The money would be enough to purchase roughly 5,000 homes, Chief Executive Officer Giri Devanur said in an interview.

Emboldened by a post-pandemic travel boom and searching for better returns than they can get in hotels or apartment buildings, other firms are building on the strategies employed by the scrappy entrepreneurs who built small portfolios of short-term rentals and helped drive Airbnb Inc.'s decade-long rise.

Plans to buy giant pools of rentals would mark a shift toward a consumer experience with Airbnb that more closely resembles a hotel stay. But it comes as record-low home inventory pushes prices higher for average buyers and Wall Street investors alike.