What’s up guys, in today’s video, we’re gonna be talking about the best niche for short term rental investing. If you’re going to be buying an Airbnb or short term rental, then you’ll want to consider this one niche in particular that I’ve found to be incredibly successful. But I also want to share with you some of the cons to consider when investing in this particular niche. And I want to share some my thoughts on other niches.

Just to clarify, when I talk about a niche, I’m not talking about one specific location, we’ve got other videos on the channel that talk about specific cities, specific countries that are really good for investing. But really, I want to focus more on the particular type of property and the setting of the property. More importantly, that makes up the niche. And the way to think about it is that a niche property, a niche of that any property is going to belong to is essentially a property that is going to have the same type of guests. So the question here is like, what type of guests Do you really want your property to cater towards, in order to get the most profit possible, and in my experience, that is groups of friends. So you want to find properties that are going to be catering to large family gatherings or groups of friends? And the question then becomes how do I find properties that specifically attract that type of guests? And why do I even recommend those types of properties over others, like, for example, a business travel style listing or property that’s geared towards couples. And so really, what I found is that these are the properties that have the most price elasticity, which means that generally, they tend to be a lot higher profit. The reason the price a lot more elastic on properties that are catering towards large friend groups, or large families is because of two main things. One, you’ve got a larger group of people that are travelling to that specific property. And so naturally, there’s just more flexibility on the price when you’re splitting the cost amongst 10 people versus when you’re splitting the cost amongst one or just two people. So if you think about it, if you charge an extra $10 per person, which a lot of people will be willing to pay an extra 1020 30, even $50 per person per night, if they got a property that was slightly nicer. And when you apply that to a group of 10 people, now you’re actually charging an extra 100 200 or $500 a night. But when you break it down on a per person basis, it’s actually still really affordable. And the price difference isn’t that massive. So there’s a lot of opportunity with these types of properties to add certain amenities do certain things to improve the listing, and have it really dramatically be impacting the price that you’re charging per night versus if you make a more desirable one bedroom property and you add amenities, furnish it really nicely do these different things, you’re probably still not gonna be able to charge an extra $500 a night for that property. So that’s one thing is that because you’re attracting a larger group of people, you tend to have more price elasticity because those small differences in prices per person end up being large differences in your total nightly rate from the other reason that your price tends to be more elastic is pretty straightforward. It’s just that you have a lot less competition when you have a larger property that is geared towards those large families or friend groups. The reason for this is because if you have a small property, let’s say you have a one bedroom condo downtown, you’re not only competing with the other one bedrooms, you’re also competing with all the two, three and four bedroom properties that although they might not be the ideal property for a single person or a couple to stay at, why not if the price is right, you’re still competing with those other listings, not to mention the fact that you’re now competing with all the hotels in the area that can also accommodate a one or two person booking. So ultimately, you just have a lot more competition, that’s going to put a ceiling on what you can reasonably charge and actually collect on a nightly rate. So although you will have generally a bit higher occupancy. In some cases with those smaller units, you’re generally from my experience going to see much higher profit from the larger units. That being said, there are also downsides to consider, like I mentioned when I started this video, it’s not all sunshine and rainbows. It’s not all upside when you’re looking at these properties, which is why I always encourage investors to take a balanced approach and find the best mix and fit that works the best for them. So the downside here is that if you are going to be investing in a property that is geared towards larger friend or family groups, number one that can start to get impacted when the economy gets shaky a lot more easily than say a one bedroom place. People are going to be able to cut back on their leisure, leisure travel. So especially once you get into the much higher end multimillion dollar properties that are geared towards a luxury experience for those larger groups. It’s relatively easy for them to just kind of downgrade their stay if the economy starts to get worse and things start to get get tighter on the purse strings. And so naturally I always just recommend that if you are buying one of these types of properties, you have a lot of buffer room built into the deal. I’m generally aiming for 20% or greater return on investment cash on cash return. 15% is good if you have a solid backup plan. But I really want to see enough buffer and know that even in a worst case scenario, if things do slow down, that I’m still going to be able to at the very least break even and ideally still be profitable. Guys just want to take a quick break here to say that for those of you watching, who want to build cashflow, and long term wealth by purchasing Airbnbs, and short term rental properties, there’s a link in the description right down below for a free training that will walk you through my exact strategy for investing successfully in Airbnb ease. Now, if you’re not ready to actually buy properties, and you want to get started managing other people’s properties on Airbnb the same way I got started and build a full time income managing other people’s properties. There’s actually another free training linked in the description down below as well, that will be a really great fit for you. So whether you want to invest in short term rental properties and actually build amazing cash flow and long term wealth by acquiring the assets, buying the properties themselves, or you’re looking to earn a full time income managing other people’s properties on Airbnb, we’ve got some awesome trainings that are linked in the description down below. That’ll definitely help you out. When you sign up for the trainings, we’re also going to send you a few other tools and resources completely for free just to help you get started. Again, the links to sign up are in the description down below. And both trainings and all the tools are completely free. So make sure to register for the trainings, links in the description down below. The other thing to consider is that with these larger properties, if they’re in a more rural setting where large friends and family groups tend to go and stay, then it may be more difficult to rent the property long term or midterm as a backup plan if needed. When you go and buy that one or two bedroom condo downtown in a metro area, it’s always a relatively easy prospect to just transition that unit over to a furnished mid term rental, or over to a long term rental if you need to as a backup plan. Whereas doing this with a larger whole home listing in a more rural setting is generally going to be more tough to do. And you probably aren’t going to be in a great cash flow position with that as your backup plan. So again, just makes it really, really important to always have a backup plan, especially on these properties. There’s high upside, but you also want to make sure that the downside is protected, because never worth the additional upside if you cannot protect your downside from incurring losses. So those are some of my thoughts on some of the most profitable niches to be in with short term rentals. Next, let’s talk about where to actually find those types of properties. Where would you want to go? Well, there’s lots of different places that large friends or family groups are going to vacation to. But what I’ve found as a trend is that that tends to be a lot in like I just mentioned more rural settings. Sure, there are a lot of markets like Florida or Arizona, where you’re going to get different types of friend groups, or even bachelor parties, bachelorette parties, Family Travel, things like that. And those can do really, really well. I’ve seen some properties that do hundreds of 1000s of dollars in places like Nashville just by accommodating larger groups of people. So those can absolutely do really, really well. And what I’ve seen a more common trend towards is more rural areas around national parks, kind of staycation type destinations within a couple hours of a main Metro hub. Those tend to attract a lot of larger family groups and travel groups, because there’s just things to do. The most important kind of characteristics that I see linking all these things together, these different areas that perform well is it going to be in a place where you’ve got things to do activities that are going to be entertaining and fun for the whole family or the group of friends, whether that’s a lake or a mountain or an amusement park or just great weather, there’s always stuff to do might be the beaches, all kinds of different things. Whereas if you look at reasons that a business tribalistic succeeds, it’s not because the area has things to do. For example, London, Ontario attracts a lot of a lot of travel for business. There’s barely anything to do in London, Ontario, Canada, but there’s some manufacturing plants or some corporate offices there. And so business travel tends to happen there and you can run the numbers on it and a lot of deals are really good there as well. But it’s just a different type of market. So you want to look for areas where there’s a natural attraction there, whether it’s going to be like I said, an amusement park beach and mountain lakes you know, something generally nearby to a metro hub I found works really well also, because it means that that Metro hub, you’re gonna get a lot of staycation traffic from there. So for example, for our listings, a couple hours outside of Toronto, most of the people that we get staying there are from the Greater Toronto Area. They’re not a lot of people coming in internationally or from other other provinces. It’s mostly people that are coming in just from Toronto or the GTA, that are going to be going up there and staying so being close to that Metro hub. Being within a few hours drive from there really does help to make your listing appeal to those you know millions potentially of people that could actually stay at your listing so that’s my thoughts I want to know yours as well as always let me know in the comment section down below if you liked this video and got value from it, make sure you take a second to give it a thumbs up

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