1.3 Identifying Profitable Markets

Knowing what brings travelers into a destination is the key to identifying profitable markets.

With the vacation rental reaching more and more people, the potential has grown to encompass many more markets outside the traditional destination locations.

When looking for markets that would make sense for investors a number of factors come into play including:

• Proximity to airports (hubs are best)
• Local attractions and events
• Zoning regulations
• Attractive sale prices
• Rental and occupancy rates (avoiding saturated areas)
• Always be aware there are no guarantees in any market and as we will see in future lessons, there is a higher risk in short-term rental as opposed to the traditional long term model.

Rental rates and occupancy figures will vary depending on a number of factors such as:

• Seasonality
• Competition
• Number of bedrooms
• Poor reviews
• Source of the booking

Research into profitability takes all these into account and a knowledge of the inbound traveler market will make a difference in the recommendations you will give to a client.