A place that attracts maximum number of guests AND is your area of interest.
That would be a pretty ideal location.
The ‘investability’ of a market depends on a lot of factors.
But the following tips will help you in making a smart, profitable decision to choose a location just right for you.
- Focus on return on investment
What a property can make for you needs to be higher than the cost to buy and maintain.
Whether it’s cash on cash, annual rate of return, cap rate etc., estimates say 8-12% ROI is good. - Don’t go for high supply areas
Oversaturation of holiday homes in a particular area will make it harder to attract guests and you can’t charge much.
Lack of sufficient demand means these areas will not receive enough bookings to keep revenue high for hosts. - Go for high demand areas that keep going upward
Markets that are generally trending in the right direction, not just momentarily, are the good ones.
Pay attention to locations where the number of booked nights has risen gradually over the last few years. - Consider satellite markets
The areas close to popular destinations hold untapped potential, especially if they have lower nightly rates.
These locations are popular because they feel undiscovered but still have plenty of vacation activities.
- Find out the ‘must have’ amenities
The right amenities can help hosts perform significantly better.
Find a property with those features or add them quickly.
Tip: check out the top earning properties in your area to identify these guest-driving amenities. - Study your competition
Know how your competitors are performing and find an opportunity to slide in as a top listing if they are underperforming.
How?
Compare revenue and revenue potential – the greater the difference, the more competitors are underperforming, and the more opportunity for you! - Don’t go for areas with a lot of professional hosts
These are individuals with more than 21 properties or so.
They are more seasoned, well-resourced people and competing against them will take you some time.
Keep these factors in mind to choose a location that combines your preferences with business-focused rationality, resulting in a successful, long-term investment.
Learn about the advantages of partnering with One Perfect Stay for short-term rentals in Dubai by clicking here now.
