If you learn one selection heuristic from this course, make it this one: in most vacation markets, bigger sleeps better. A 4BR+ home that sleeps 10 usually outperforms smaller properties — and the reason is arithmetic, not opinion.
A home that sleeps 10 can charge group and multi-family rates — often 2–3x the nightly rate of a 2BR. But the fixed costs — insurance, permit fees, lawn care, base utilities, a single hot tub, one pool — barely move between a 3BR and a 5BR. Cleaning and furnishing scale somewhat; taxes scale with price. The spread between revenue growth and cost growth is where the margin lives.
Family reunions, ski groups, wedding parties, and multi-family trips have few lodging options: two hotel rooms and a hallway, or one large STR. Large homes face less competition per booking because the supply of sleeps-10+ properties is thin in most markets, while 1–2BR listings are saturated.
When a client compares properties, have them divide projected annual revenue by bedroom count. A $90K/year 5BR ($18K/bedroom) and a $40K/year 2BR ($20K/bedroom) are closer than they look — but the 5BR usually wins on absolute cash flow, appreciation on a larger asset, and resilience when rates dip.
Urban markets, ski-resort bases, and beach towers flip the math: demand there is couples and solo travelers, walkability beats square footage, and condo-hotel buildings carry built-in rental permissions large homes can't get. Know your market's demand shape before defaulting to "bigger."
Go deeper: How to Choose an STR Property and STR Performance Metrics.
ACTION: Pull three active listings in your market — a 2BR, a 3BR, and a 4BR+ — and estimate revenue per bedroom for each. Get comfortable doing this in ten minutes.
Next lesson: the step you must do before any showing — regulations. One skipped check can vaporize a client's entire business plan.