(00:00) deciding where to invest when you’re buying your first or your next short-term rental property can be a really daunting decision to make and it can be one of the most important deciding factors in your success especially if you choose the wrong Market to invest in in this video I’m going to share with you a few markets that look good a few markets that look not so good and a few markets that look good but might actually be a wolf and sheep’s clothing let’s jump into it and start looking at some good markets so
(00:35) that you can start to figure out for yourself which markets are actually good for short-term rental investing and which ones aren’t the tool that I choose to use in order to do this is a tool called air DNA now you can use air DNA for all kinds of short-term rental analysis and at this level what’s really cool is that air DNA has a list of Any Given market right now for this video we’re just going to be looking at the United States but you can also use airdna Canada for Europe for Asia Australia pretty much
(01:09) anywhere in the world where they have short-term rentals you can use airdna to get data for it now what you’ll want to do is come over to the markets and you can look at them and sort them by things like their Market score their DNA gives them you can look at them by their occupancy their revenue their daily rate and look at all these different markets and you might find some good ones or you might find some that look good but turn turn out to not be so great so I’ve pulled up a market to start with here
(01:34) that based on just looking at what I know about this Market uh it looks like a pretty solid Market it was actually nominated as one of the best markets to invest in for 2024 it is Cocoa Beach Florida now one of the things I like to look at at a market level is for starters the investability which airdna basically calculates by comparing the average purchase price of a property in that area to the average revenue potential now this is no by no means an absolute figure or an exact figure because you are aggregating data from
(02:06) the entire market and what you can run into issues with is if there are some markets that perform really well on the revenue side because of a few outlier properties that skew the numbers or that there’s a lot of cheap properties for sale that wouldn’t do well and then the properties that do perform well are much more expensive so there are definitely potential errors and flaws with the investability score it is not to be taken as a one you know answer for everything it is just one data point that tells you that there’s a good
(02:36) chance you’ll be able to get a good return on your investment now another one that’s really important and helpful to look at right now is rental demand and revenue growth which these two numbers tell you the amount of growth in demand and uh for rentals and the demand for in Revenue uh over the last couple of years so it tells you in other words if the market is becoming more attractive and is growing a lot of markets right now now are Contracting because of the things going on in the market because we’re coming out of the
(03:04) pandemic uh there is a lot of there are a lot lot of markets that are Contracting that saw a big push up and are now kind of coming back and normalizing and so anytime that you can find a market that is still experiencing consistent or strong rental demand and revenue growth that is a good thing seasonality I don’t worry about too much simply because revenue is revenue really the only reason that seasonality matters is for your cash flow planning because you might need to squirrel away some money that you make in High season to
(03:35) make sure that you have it set aside for low season when revenues are going to be lower but overall it doesn’t actually impact your returns when during the year the revenue comes in it just impacts your cash flow so you have to plan accordingly regulations are another really big thing that I look for and frankly trusting air GNA on this one is a bit of a trick I’ll show you that with my next one here so if we look over at this Market Palm Springs California you can see that it’s got good regulation
(04:06) score of 50 it’s actually got decently High investability sure rental demand and revenue growth are down but seasonality is good regulations look good so why not invest in Palm Springs well as you might know if you followed other YouTubers in this space or just been in kind of hearing about things going on in Palm Springs there’s pretty horrible regulations there for short-term rental properties that make it incred incredibly difficult to actually rent your property short term all year round there’s limitations on
(04:36) when and how often you can rent your property shortterm and that means that you either have to leave your property vacant the other nights of the year or figure out some kind of a midterm rental or long-term rental setup which in addition to lowering your overall returns is also going to mean that you’re now going to be falling into landlord and tenant laws with long-term rentals and in California specifically you don’t necessarily want to be doing that because a lot of people get into short-term rental investing in the first
(05:05) place so that they don’t have to deal with all the pain and the headache of tenants not paying rent evictions damages to their property and so if now all of a sudden you have to do that because of regulations it can kind of put you in between a rock and a hard spot and have you not really performing well to boot so you do have to be careful with this do your due diligence with any given Market you want to make sure you’re doing your own uh regulatory research to figure out exactly what the regulations are and you can even take it
(05:34) one step further by looking at what the incentives are for that area for the government the people in that area as far as regulations if the local economy is highly dependent on short-term rentals then you can safely say things are probably going to stay more favorable to shter rentals if all the people and the politicians want short-term rentals gone then even if there isn’t regulations Banning them prohibiting them restricting them right now pretty safe to say that in the near future it will happen so you probably
(06:05) want to steer clear of some of those markets so that’s some of the main things we want to look at are you a brand new or experienced Airbnb host co-host or investor who wants to host as successfully as profitably and with as much fun as possible if so then I would love to invite you to check out BNB tribe Linked In the description down below this video it’s our exclusive Community for Airbnb hosts investors and co-hosts from all over the world where I share some of my best trainings that go into detail on every single aspect of
(06:40) Airbnb hosting from A to Z we’ve got Advanced Training playbooks that will help you to use more advanced strategies to take things to the next level and make more money and have more fun hosting co-hosting or investing on Airbnb you’re also going to get access to an incredible community and over $2500 worth of deals perks disc discounts bonuses that I’ve negotiated with other vendors in the short-term rental industry so if you want access to all of that and a whole bunch more check out the link in the description down
(07:09) below for B&B tribe and I would love to see you on the inside we also want to look at the overall Revenue potential because even though you might be able to earn a good Delta on what you purchase the property for if your property is only making a few thousand a year in cash flow probably not going to be worth your time so you want to make sure that you can find good properties that are in your ideal kind of budget range they’re not too cheap they’re not too expensive for what you’re looking for you have
(07:33) good properties you’ve got good investability good Revenue demand and Rental growth and that your regulations are favorable and likely to stay that way now another thing that I see people running into all the time is a market like this now if you if you ever played like Mario Kart this is like you’re kind of getting towards maxed out on all the stats for this market so you think to yourself canaille wherever that’s located must be a great Market it’s got a 100 100 Market score a 90 on investability rental demand through the
(08:04) roof Revenue growth through the roof seasonality high score regulations 50 so let’s go and research regulations and if they’re favorable let’s get in there before anyone else finds out about this market after all there’s $80,000 in average revenue for properties in this area how much better could you possibly hope for it to get let’s do it however if you look here there’s only eight short-term rental properties in the entire market so all of this data is based on eight properties that means
(08:37) that if Timmy got an extra few bookings this year that’s going to make an actual noticeable difference on the rental demand and revenue growth stat just because some random person traveled to canaville one time and booked Timmy’s property now your stats are maxed out so you have to be really really mindful of that the other thing is you might might say okay well I can do $80,000 a year in Revenue with a property I buy there so let’s go buy one well here’s a home on 40 acres and it did 124 here’s another
(09:11) seven bedroom home on 46 Acres that did 130,000 in Revenue that one you know those ones are pulling up the numbers dramatically if we look at a normal canaville Cottage four bedroom to an a half bathroom this property when 360 days that it was available did 30 $4,000 in Revenue we’ve got another one here that was available for 172 days the tiny home did $28,000 in Revenue so it’s really not looking that promising for us to go into this Market with a property other than maybe a you know home on 40 acres or a seven bedroom place on 46
(09:50) Acres so we don’t actually have the stats to back up that nonmassive ranch homes actually perform well and so although the inv stability is high it’s not actually an accurate representation of what’s going on in the market because sure the average purchase price of a home might be low if we look at some of these properties over for sale you can see well actually these properties are not but bear in mind that for the market performance it does take into account Zillow estimates it takes into account all the properties on
(10:19) Zillow so it might be more than just these two properties that are currently for sale right now but I’d imagine that in Kanarraville you can probably pick up properties for a few hundred th000 and so when you compare them to the $124,000 that airdna thinks it can earn it looks like really really good strong investability however once you actually compare apples to apples the picture might not look the exact same so you got to be mindful of that here’s another great example of a market that kind of had the same thing going on so if we
(10:48) look over at bethl you’ve got really great investability strong rental demand really decent Revenue growth you might need to look into regulations but my biggest concern here is that there’s only only 15 properties and so although if we rate by here Revenue you can see there’s a couple that are really one that’s pulling up and skewing the numbers the other ones here are performing much much more modestly so you can see that now your numbers are getting pretty significantly skewed by just one top performer in the market and
(11:22) it’s possible to do that just because the market is so incredibly small now the other really big challenge you’re going to run into with a market like this is that when you go to formulate your projections you don’t really have much to go off of right you there is an advantage of not having a lot of competition but I would take more certainty in my investment over less competition any day of the week ultimately your due diligence and decision making is what makes or breaks you as an investor and so you don’t want
(11:52) to go and get overly eager and excited about getting into a market where there’s no competition because that means that you don’t have a lot of data to inform your decision- making so hopefully this has been a good helpful insight for you into how I go about looking at different markets the kind of red flags I look for the green lights that tell me a market is worth digging into further and give you some idea of how to find a really good Market to invest in now if you want get further explanations and help and support and
(12:18) access to all of our tools all of our data all of our resources they can help you to find the best Market to invest in and I highly recommend checking out B&B tribe it’s our brand new community for shter rental invest ERS hosts co-host so if you’re looking to start a property management business start co-hosting for people hosting your own space or investing or you’re already doing it and you want to take it to the next level with really great training an amazing community over $2,000 worth of deals
(12:44) discounts everything else then I highly recommend checking it out it’s all in BMB tribe it’s one single Community with everything you could ever possibly need we’ve got Advanced train playbooks we’ve got trained playbooks that are great for people just getting started we’ve got all the tools and resources you can imagine like I said almost $2500 in different tools discounts savings everything you’re going to get um and the best part is it’s so so affordable that you can pay for your entire Year’s
(13:09) membership with basically just one additional booking on your property so check it out it’s linked in the description down below uh if you like this video if you got value from it make sure you hit the like button give this video a thumbs up helps me out dramatically in getting these videos in front of more people helping more people and growing this space I really really love Airbnb and short-term rentals so if you take half a second and just hit that like button it really does me a huge favor um and last but not least if
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