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❌🏡🙅What Not to Do When Selecting a Market for Your Short-Term Rental
Ready to buy your next STR? Here's a couple things you *shouldn't* do when choosing a location.
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April 17th, 2025
Good afternoon STR Report Community!
In today’s issue, you will find:
📱Today’s Article: ❌🏡🙅What Not to Do When Selecting a Market for Your Short-Term Rental
📈 Trending Market Highlight: Sedona, Arizona and Telluride, Colorado
✉️ STR News: What do the new US tariffs mean for the short-term rental industry? & more
💸 Mortgage Rate Watch
🪐 Unique Airbnb of the Week
🏫 Subscriber Perks: Go Live Playbook, including: Beginner’s Guide E-Book, Guest Communication Messaging Templates, Airbnb Welcome Guide Template, STR Buy Box Template, & Tax Savings E-Book
✅ Community Perks: Property Analysis, Personal Airbnb Investment Finder, and STR Loans & More
📬 See our collection of newsletters here: Prior Newsletters
How it feels to finally find the perfect market for your next STR:
❌🏡🙅 What Not to Do When Selecting a Market for Your Short-Term Rental
When it comes to maximizing revenue for your short-term rental, selecting the right market is one of the most crucial decisions you can make. The wrong market choice can significantly impact your bookings, pricing strategies, and long-term success. Here's a breakdown of what not to do when choosing an STR market:
Don’t Ignore Local Regulations
One of the biggest mistakes STR investors can make is ignoring local regulations. Many cities have strict laws about short-term rentals, including limits on the number of days you can rent, registration requirements, or even complete bans. Failing to research and comply with these regulations can lead to hefty fines or even forced shutdowns of your property. Always check local laws before committing to a market to ensure your investment will be compliant and sustainable.
Don’t Choose a Market Based Only on Popularity
While trending markets or highly popular tourist destinations might seem like the obvious choice, they aren’t always the best for maximizing revenue. High demand in a location can be accompanied by higher competition and inflated property prices. Additionally, many popular markets experience severe seasonality, which can lead to significant revenue drops during the off-season. Focus on markets with consistent year-round demand, or niche locations that attract specific traveler types, rather than just those with high tourist traffic.
Don’t Overlook Market Data and Analytics
It’s easy to get caught up in the excitement of a new area, but ignoring market data can be detrimental. Avoid basing your decision on gut feelings or assumptions. Instead, invest time in gathering data on occupancy rates, average daily rates (ADR), seasonal fluctuations, and competitor performance. Tools like AirDNA or STR analytics can provide detailed insights into market performance. By analyzing data, you can avoid overpaying for a property or entering a market that’s already oversaturated.
Don’t Underestimate Seasonal Variations
Selecting a market without considering seasonal fluctuations can lead to disappointing revenue. Some areas may see a surge in bookings during certain months but experience low demand during others. For example, ski resorts may see high demand during winter but little activity in the summer. If you’re targeting a seasonal market, make sure you plan your pricing and booking strategies accordingly to account for the slow months. A year-round location with consistent demand may be a more reliable choice for maximizing long-term revenue.
Don’t Neglect the Local Economy and Demographics
A high-profile market doesn’t automatically mean it’s the best fit for your STR business. It’s important to consider the local economy and the types of travelers the area attracts. A market may have a lot of tourism, but if the area is mostly catering to budget-conscious travelers, you may struggle to achieve higher nightly rates. Similarly, markets with strong business travel or longer-term stays may be a better fit if you’re targeting mid-range to premium guests. Research the local economy, key industries, and the demographics of potential guests before diving in.
Don’t Overlook Future Market Trends
What’s hot today may not be as attractive tomorrow. A common mistake is focusing solely on current market conditions without considering potential future changes. Look for areas with growth potential—whether it’s new infrastructure projects, a booming local economy, or shifts in travel trends that could benefit your STR business. Choosing a market with future promise gives you an edge and helps ensure long-term profitability.
By avoiding these common mistakes and conducting thorough research, you can select a market that not only fits your investment goals but also maximizes your potential revenue. Remember: success in short-term rentals isn’t just about choosing the right property; it’s about selecting the right market that offers both demand and opportunity. Need ideas? Take a look into some hot markets in our “Trending Markets” section below: 👇
Sedona, Arizona 🌄
Downloadable Sedona, Arizona Short-Term Rental Market Report
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Average Daily Rate (ADR): $424.48 per night
Occupancy Rate: 59.48%
Annual Revenue Potential: Around $86,152.68 per year
Read our full Sedona, Arizona Short-Term Rental Market Report attached above.
Telluride, Colorado 🏞️
Downloadable Telluride, Colorado Short-Term Rental Market Report
|
Average Daily Rate (ADR): $810.69 per night
Occupancy Rate: 55.74%
Annual Revenue Potential: Around $164,569.78 per year
Read our full Telluride, Colorado Short-Term Rental Market Report attached above.
💸 Explainer: What do the new US tariffs mean for the short-term rental industry?
In April 2025, the U.S. introduced significant new tariffs on imported goods, including items essential for short-term rentals like furniture and homeware, leading to higher operational costs, delays in supply chains, and a decline in international tourism, which may challenge property managers and hosts in tourism-heavy markets.
💸 Lyft enters Europe with €175M acquisition of ride-hailing provider FreeNow
Lyft has expanded into the European market by acquiring the multi-mobility app FreeNow for $200 million, aiming to compete more directly with Uber in key cities across Europe.
💸 HomeToGo unveils overnight stay at Union Berlin
HomeToGo has partnered with Union Berlin to offer fans an exclusive overnight stay at the Stadion An der Alten Försterei, featuring a converted container with pitch-side views, available on May 2 and May 9, 2025, including match tickets and a stadium tour.
💸 The impact of AI on the operations of travel companies
Phocuswright's "New Age(nts) Trend Series" event explored the transformative impact of generative AI and autonomous agents on the travel industry, with key takeaways emphasizing the need for AI fluency, data quality, AI as a distribution channel, real-time adaptability, and agility in company operations.
💸Mortgage Rate Watch – April 17th, 2025
Current Mortgage Rates (as of April 17, 2025):
30-Year Fixed: 6.86% (-0.02%)
15-Year Fixed: 6.27% (-0.02%)
30-Year Jumbo: 7.21% (-0.11%)
30-Year FHA: 6.34% (-0.02%)
30-Year VA: 6.44% (-0.02%)
7/6 SOFR ARM: 6.75% (-0.10%)
Market Overview: Mortgage rates have seen modest declines today, continuing the trend of slight downward movement across most loan types. A generally stable bond market and continued investor sentiment suggest that rates are in a holding pattern, with minor fluctuations being driven by economic data releases and Federal Reserve signals.
The 30-year fixed rate has hovered between 6.11% and 7.52% over the past year, and recent trends show some relief from the higher borrowing costs that have been a challenge for buyers.
Rate Trends & Forecast:
Short-Term: Rates are expected to remain relatively stable with slight changes depending on economic indicators and Fed policy shifts.
Long-Term: As inflation continues to ease, mortgage rates may trend downward, but significant decreases are unlikely without a major shift in economic conditions. The Fed's policy will remain a key influence on mortgage rates throughout 2025.
For real-time mortgage rate updates, visit Mortgage News Daily.
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Subscriber Perks:
📖🏡💰 Go Live Playbook
The "Go Live Playbook" is your all-in-one guide featuring a beginner’s guide e-book, messaging templates, Airbnb welcome book, STR buy box template, and tax savings tips to kickstart your short-term rental success.
Community Perks with The STR Report
📊 Property Analysis – Instantly discover key metrics like cash flow, ROI, and Cash-on-Cash returns to make smarter investment decisions for your STR, MTR, or LTR.
🔎 Personal Airbnb Investment Finder – Connect with an expert to handpick profitable Airbnb properties that match your criteria. With 200+ successful deals, all cash-flowing, you’re in good hands. Take 15 seconds to fill out the form to see how all of these properties are experiencing at least a 15% Cash-on-Cash return.
🤑 STR Loans & More – Need funding for your next short-term rental? Expect expert guidance, personalized service, and the best possible rates.
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