Investing in a short-term rental (STR) can be an incredibly lucrative opportunity. With the rise of platforms like Airbnb and Vrbo, the demand for unique and well-located vacation rentals continues to grow. However, not all properties are created equal, and maximizing your earnings requires a data-driven approach.
Whether you're a first-time investor or an experienced host looking to expand your portfolio, the main factors to consider when shopping for a high-earning short-term rental include: Market Trends, Target Audience, and Finding the Right Price to charge guests. Below is some of the findings, along with how Host Genie helps clients find the right property themselves.
Recent data highlighted several key trends:
Rising demand for STRs
Limited new supply and high demand which was driving rental rates up
Host Genie Research reports show time series data of major markets to help identify the best places to start a new STR. Small city and more rural markets are starting to see an increase in earning potential, as unique structures and getaways are becoming more popular desires. Finding a market with desirable attractions can also lead to increased revenue during peak travel seasons.
Understanding your target market is crucial for maximizing STR performance. Millennials, who prioritize unique experiences, affordability, and flexibility, are a major demographic for STRs. Social media is playing an increasing role in STR marketing, with platforms like Instagram offering direct booking options and showing off top properties on your feed. Here are some customer buckets:
Millennials (under 30): Price-sensitive, seeking authentic experiences.
Mid-age travelers (30-49): Prioritize cleanliness and convenience.
Older travelers: More cautious, focusing on security and amenities.
Solo travelers: Often opt for shared spaces, whereas families and groups prefer entire homes..
Host Genie Optimization reports help current and prospective AirBnB hosts identify the correct target audience for their market by analyzing the local competitor properties. Host Genie helps our clients find their target audience by summarizing the reviews from their Airbnb page and group them based on the type of client staying at competitor properties. We identify the best customer avatar to target and provide suggestions of amenities and design to best attract that customer.
Price per Night - a key factor in attracting guests and determining gross yield. Price is dependent on many factors, such as location, accommodation, and amenity set.
Occupancy Rate - impacts income and shows seasonal fluctuations. This is helpful in calculating an effective daily rate when accessing income potential of your property.
Host Genie uses price and occupancy data from competitors to determine the best price for you to be charging, and help you adjust price based on seasonality.
Market Value - accurate market values for competitors is important when estimating expected gross yield and income potential
Property Identification - the best properties to choose as competitors have similar characteristics including: Location, Property Type, and Bedroom Count
Properties were assessed using a weighted scoring system based on factors like sea view, access to the beach, privacy, and renovation potential. The scores allowed for selecting the most suitable properties for short-term rental investment based on a combination of price, features, and renovation possibilities.
Host Genie Forecast Reports identify the earning potential of a property in a given market based on similar factors. We look at details pertaining to location, waterfront or pool properties, and accommodations based on bedroom count to provide the best data set to predict revenue earning.