If you asked me a year ago to list the areas of the country where short-term rentals thrive, you might as well have asked me to list where I would like to vacation; places near the ocean, places near mountains, and a couple big cities. I’m not alone. “Short-term rental” is a term often interchanged with “vacation rental”. I attribute this mindset to the relative newness of the industry, in terms of popular attention in the digital age. When Airbnb was started in 2008, the whole idea was shocking and whimsical; you go stay in someone’s home, in a residential area with all of the creature comforts of a “local”.
It was so different than the way my family had always done things. When we traveled to see family down south, we’d stay at the Holiday Inn nestled between the McDonald’s and the greyscale office buildings on the busiest (and most unappealing) road in town. Hospitality was a corporate business, done by companies whose job is to cram bodies into rooms – rooms that all look the same and make no effort to be a memorable part of your trip. Airbnb challenged this idea with their original slogan “Travel Like a Human”. By allowing people to rent personal spaces owned by individuals and families, it enabled completely unique and intimate experiences that immersed renters in the lifestyle of a location, rather than just giving them a place to stay. Travelling, for lack of better words, sucked less…and really became fun.
While travel has become more fun, when you’re considering starting your own STR, remember that fun is not the only reason people travel. Here are some of the reasons my guests have stayed in my first short-term rental during the first 3 months of operation:
- Funeral of a friend
- Coming back to visit their hometown
- Temporary housing for a work assignment
- A place to stay for a night during a cross-country road trip
If you want a quick litmus test for whether or not your area might be a good fit for an Airbnb listing, ask yourself these questions:
- Are there hotels in the area? Big hotel chains don’t just set up shop anywhere. If there is a hotel in the area, it is likely because of trends in travel; whether for work, pleasure, or other reasons.
- Am I near a popular destination? While your town might not have a big, sexy name, you may be able to provide “close enough” housing for people looking to travel to that big-name city or destination at a much more affordable price. When searching on a map, budget-conscious individuals are likely to look around the perimeter of where they really want to go. Rather than take it as an insult to your small-yet-spectacular city, consider it an opportunity to capitalize on the sky-high rates in hot zones.
- Why would I want to come here? With some introspection you may remember the campground down the road from your house, the big barbecue festival every Summer, or the local college whose football team has a cult-like following. You might gain some confidence in the profitability of a short-term rental and a greater appreciation for the area.
So, why did I choose the location I chose for my first 2 STR houses? I chose the quaint Michigan town for a few reasons. First, there are 2 hospitals in the area, and I thought traveling nurses and doctors would appreciate a cozy home more than a stiff, boring hotel room after a long shift. Second, this adorable little city offered a touristy vibe only a 1.5 hour drive from my home, making it accessible in case of emergency (while I’m new to this, I enjoy the comfort of feeling close to my rentals). Add in cheap real estate prices in the area and a cute real estate agent friend I knew in town, I was tunnel-vision focused on this area.
In summary, don’t feel like short-term rentals are only for the flashy vacation destinations with household city names. With a little research you and some customer empathy, you may discover that there’s money to be made with STRs in even the unsexiest of towns.
*BONUS* Check out the airdna.co to check out trends and revenue forecasts for short-term rentals anywhere and everywhere.