5 questions to ask to know if a property is ripe for short-term rental 

Checking the potential of a property for short-term rental requires a carefuly study.  Digital platforms such as Airbnb has made it easier to reach out the market.  

Still, you need to consider ask several questions when considering a location for your next investment.

1. Is location in high demand among tourists? Find out as much as you can about the area and whether it has easy access to public transportation and nearby attractions; proximity to restaurants, pubs and shops; and strong traffic from tourism throughout the year.

2. What are the attractions in the neighborhood?

Among the key metrics of a good neighborhood are walkability and charm.  Are there enough attractions in the area that will keep tenants entertained? You may also look at the state of the local economy.

It’s important to determine which ones are likeliest to have staying power. Check the industries that are growing the fastest against projections from the Bureau of Labor Statistics to see which are most likely to sustain their momentum.

3. What is the cost of living in the area?

Check first the return on investment from your preferred property.  Finding a rental property with the right price means understanding the cost of living in the area, including the average rent in urban, suburban and rural areas; property taxes and fees; and average utilities costs

In New York, the average cost of renting a two-bedroom apartment is about $3,411 per month. Nationwide, the cost of renting in urban areas stands at $1,640 per month on average. These numbers can give you quick insights into how difficult it will be to enter into a target market.

4. What does Airbnb Analytics say about the area?

4. Dig Into Airbnb Analytics for the Area

Airbnb analytics platforms are tools that can help you discover  how ripe or saturated an area is when it comes to Airbnb opportunities.

Take a good look at the existing Airbnb listings in your market. Find out the price ranges in each neighborhood and see if you can discern which apartment or neighborhood feature sets command a premium. Look at the number and quality of reviews to make inferences on likely occupancy rates, busy seasons and whether guests enjoy what the area has to offer.

5. What is your taget market?

Are you looking at the millennials as a market. They’re the largest segment, and many industries are evolving to account for their tastes.

A study shows that seven in 10 millennials prefer locally owned rentals, and 42 percent want to stay someplace “unusual” when they travel. This may be a good time to buy Airbnb units in a location that is popular with younger travelers. 

It’s important to understand other major market shifts, too — including changing regulations across the country and how they apply to Airbnb and other short-term rental property owners. Young professionals may want a touch of home when they travel, but local municipalities are being increasingly vocal about where short-term rentals may be situated.

This remains an exciting time to enter the short-term property market. The industry is booming, and more and more people are looking for alternatives to the traditional hotel room. If you can identify your target market and ideal location, you can thrive.

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Real estate is no longer just Location, Location, Location. 
Now, it’s about Location, Information…and Timing! 

- Alejandro Manalac, Executive Publisher
 

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