Why Mid-Level Markets Are Ideal for Airbnbs

When considering where to invest in an Airbnb property, mid-level markets often present unique opportunities that can be easily overlooked. In fact, many people only consider the top tourist spots, college towns, and well-trodden towns to be apart of their investment criteria, but they are missing out in our humble opinion. Mid-level markets are not super small or rural locations and they aren’t your large metro areas, but they do hit a sweet spot that can be incredibly advantageous for short-term rental investors. Here are five compelling reasons why mid-level markets are ideal for Airbnb investments:

Less Competition

Rise to the top & fast. Our goal is to always be in the top 90% percentile, and with a mid-level market make that 95%+. One of the most significant advantages of mid-level markets is the reduced competition. We’re finding more and more that major destinations and large metropolitan areas are just too saturated with listings leaving little room for another Airbnb to enter and achieve the necessary margins. However, mid-level markets typically have less Airbnb listings and therefore less competition that compete for bookings. At the same time many of these locations still garner a high demand for bookings to there are really a steady stream of ready guests for your property. Couple that with the fact that it is easier to stand out in these markets and you’ve got a recipe for success.

Greater Team Options

Managing an Airbnb property requires a village including cleaners to maintenance and more. And in a mid-level market there are simply more contractors, maintenance & cleaning companies, and property management options, making it easier to build a strong team and for less. We’ve also found that the strong sense of community that exists in these markets can also help foster a personal relationship between teams which help to create a more fluid working relationship and thereby enhancing the guest experience. Additionally, the lower cost of labor compared to major cities can further reduce operational expenses, contributing to higher profitability.

Lower Investment

Smaller markets typically have a lower initial investment, and therefor a higher margin compared to more in demand areas and urban centers. The key is to know where there is still significant demand and marry the two. This affordability also extends to operational costs such as maintenance, taxes, utilities and other services which allow for lower overhead and a break even point that is quicker to achieve. We love that, since this all points to a greater return on our investments.

Reliable Tenant Base

Mid-level markets often have a stable and diverse tenant base. These areas can attract a mix of tourists, business travelers, and longer-term visitors such as students or people relocating for work. We’ve found that this can reduce the risk of vacancy periods and seasonality that are often experienced in top tourist markets, and we’ve noted more consistent bookings as a result. Further, the diversity of demand means that we offer flexible pricing strategies and unique amenities that appeal to a wider audience and increase our chance of bookings all year long.

Growth Potential

Mid-level markets often have untapped potential for growth. These areas are often off the radar of large investment companies and investors and mean that they are ripe for growth. Many are just starting to develop and revitalize areas and thus investing in an area like this means you get in when it is hot and still lower priced. This allows you to enter into a market poised for growth and can lead to significant appreciation in property value over time. As these areas develop and attract more visitors, the demand for short-term rentals is likely to increase, providing a lucrative opportunity for early investors.

Mid-level markets offer a unique blend of affordability, reduced competition, and growth potential that make them an attractive option for Airbnb investors. The ability to invest with lower capital and and yet still have demand from a variety of guests means that there is a sweet spot in achieving profitability that we love. For those looking to enter the Airbnb market or expand their portfolio, mid-level markets present a promising opportunity to achieve both short and long term investment goals.

Ready to explore Airbnb potential properties in the Charleston market? Let’s connect. We’d love to discuss real estate opportunities that exist.