Pick Your Market

A mediocre property in a great market usually outperforms a great property in a mediocre market. Most first-timers get this backwards — they buy where they vacation, then wonder why the numbers don't work.

The five numbers that define a market

• ADR (average daily rate). What listings like yours actually charge per night. Sets your revenue ceiling.
• Occupancy. The share of nights that get booked. ADR × occupancy is the whole revenue engine — a high rate with empty nights is worthless.
• Revenue trend. Is revenue per listing growing or shrinking year over year? A market can look strong today and be rolling over.
• Supply growth. If new listings are flooding in faster than demand grows, everyone's occupancy falls — including yours. This is the number most buyers never check.
• Seasonality. A market that earns 70% of its revenue in 12 weeks can still work, but you need reserves for the off-season, and your underwriting has to reflect it.

And one filter that trumps all five: regulation risk. A market with beautiful numbers and hostile rules is not a market. That's the whole next lesson.

Two practical notes. First, resist the urge to pick a market because you love visiting it — you're buying a business, and you can vacation in your cash flow. Second, don't just look at today's snapshot; pull 2–3 years of data where you can, because the direction of a market matters more than its current level.

Go deeper

• How to Research STR Markets
• The STR Market Analysis Guide
• STR Analytics: The Data That Matters
• Best STR Markets for Beginners
• Tool: Market Comparison
• Tool: STR Market Analytics

ACTION: Shortlist 3 markets using the Market Comparison tool and rank them by ADR, occupancy, and regulation risk.

Next lesson: the single mistake that kills more STR investments than bad pricing ever will — and the 10-minute check that prevents it.