Owning a successful short-term rental home is more than just finding a
great property. Choosing a home to invest in is the only aspect of the
investment, the area is just as important. Just as you would before opening
a store or restaurant, careful analysis should take place to determine the
opportunities an area offers.
Here are a few key factors to consider:
· Local Demand and Tourism – The best locations have some kind of
independent demand, such as amusement parks, beaches or mountains,
or other popular vacation destinations.
· Amenities – People enjoy pools, parks, and shopping whilevacationing. Consider what activities and amenities are available to renters.
· Local Regulations – Carefully investigate the local laws and
regulations governing short-term rentals. Some communities only allow 30+
day rentals or even longer (if at all).
· Competition – Review existing short-term rentals in the area and
check pricing. Spot check a few of the most appealing for availability to
learn about vacancy rates. Make sure the prices and availability fit with
your cost model.
· Seasonality – Consider whether the area has peak seasons with
slower months in between. Understand the trends and plan for lower
occupancy and pricing during the low season.
· Growth and Development – Understand the future development
plans in the community. Planned improvements may offer increased
desirability for the rentals.
A short-term rental can be a powerful addition to your investment portfolio.
Carefully selected and managed, these rentals can offer significant income
while appreciating in value over time. Before choosing a home, ensure
success by carefully considering the location. The desirability of the area is
one of the most crucial factors in a successful short-term rental business.
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