How to Determine a Good Area for a Short-term Rental

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 while vacationing. 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.