digest
Short Summary
Main recommendation: Choose a regional drivable vacation market with long-established short-term rental regulations, steady tourism, and verifiable income data, rather than a metro market or a volatile or unregulated area. The speaker says this framework (region type, regulations, tourism, income data) is the most important factor for short-term rental success apart from your own management.
Key Points
- The four steps promised by the title are: (1) Choose a market type, (2) Check the regulations, (3) Find tourism data, (4) Look at the income data.
- The three market types are metro markets (e.g., Nashville, Austin, Seattle, San Diego), fly-to vacation markets (e.g., Hawaii condos, Aspen cabins), and regional drivable vacation markets, which the speaker prefers and where he keeps his own investments.
- Regulations matter most: avoid volatile markets and markets with no regulations, since the speaker argues that no regulation means regulation is only a matter of time.
- Strong tourism is necessary for occupancy; the speaker cites a fishing camp in West Point, Mississippi as an example of a property in a low-tourism location that would be a poor investment.
- Cross-check income data from several sources, since no single dataset is perfect, and compare results against home values.
Details Worth Noting
- Concrete instructions:
- Step 1: Decide which of the three market types to focus on. Metro markets have more hotel competition and newer regulation; fly-to markets are expensive, flight-dependent vacation spots; regional drivable markets are affordable, rely heavily on tourism, and draw drivers rather than flyers.
- Step 2: Check the regulations. Look for long-established rules and stable regulatory environments. Vacation markets often already monetize short-term rentals through small occupancy taxes, making a regulatory crackdown financially unlikely.
- Step 3: Verify tourism. For national park markets, use National Park Service websites, which have visitor data back to each park's establishment. For beach or other tourism-heavy markets, contact the local chamber of commerce or department of tourism for historical data.
- Step 4: Gather income data from multiple sources: AirDNA (performance data reportedly back to 2014), PriceLabs market dashboards (requires a PriceLabs or similar pricing tool subscription, which the speaker recommends getting before buying), and national property managers such as Vacasa, Evolve, and Turnkey (the speaker says Vacasa recently bought Turnkey). You can call these companies to request market data, spreadsheets, and graphs.
- Track occupancy rate, average nightly price, and gross annual income for each candidate market, and compare those figures to home values.
- The speaker notes that individual property analysis is covered in a separate video.
- The speaker frames regional drivable markets as especially resilient, noting they suffered less during COVID-19 because travelers could drive rather than fly.
- The speaker says he keeps all his personal short-term rental investments in regional drivable markets.
Bottom Line
Rank candidate markets by regulatory stability, consistent tourism, and multi-source income data, and favor long-established regional drivable vacation markets over metro or unregulated areas.
