In any business, it is important to find your niche. You’ve got to know your target market and who it is that you serve. Trying to please everyone waters down a brand. You may think that appealing to the broadest possible number of people is a good strategy, but finding your target market is the better business strategy.
With the potential for revenue from multiple short-term guests, Airbnb and the growth of short-term rental, in general, has been a game changer. The ease of marketing short-term rentals through platforms like Airbnb makes the concept of owning rental property more feasible for more people. Let’s look at how to find your target market using Airbnb as an example.
Finding your niche will serve you well as a short-term rental property owner. Before going any further, there is a misconception about diversification that I want to clear up. Finding your ideal target market is not the same thing as the proverbial “putting all your eggs in one basket.” Honing in on a target market does mean focusing on familiar territory and it does mean going with what you already know. The market you target should reflect you, what you are passionate about, and what makes you tick.
So, while you don’t want to just own stock in one company and have that be the extent of your investment plan, the principle of going with what you know is an important one. This is sometimes called the Peter Lynch rule. He was one of the first famous mutual fund managers, and he basically told people to buy what they know. If you are a stay at home Mom and love Clorox products, then buy Clorox stock. If your family prefers Heinz to other ketchup, buy stock in Heinz too.
This principle is helpful when thinking about understanding the best way for you to buy and market short-term rental properties, or even rent space in your own home on Airbnb. Maybe your kids are in sports and you travel around your region (and sometimes beyond!) for their competitions. Why not own short-term rental properties near the sports complexes where these events are happening? Maybe you love the outdoors. Why not buy some properties near popular recreation destinations in your area?
My point is that if you are traveling around looking for economical places to stay in a given community, why not provide that service to people who are looking for the same thing in your community? So whether your thing is sports, outdoor recreation, museums, or shopping – other people love that stuff too! They are your target market. Don’t try to appeal to everyone. When you know your niche, you can serve them better. They will tell their friends, and your reputation in this niche will grow.
Airbnb and other short-term rental platforms, now more than ever, are changing the game with real estate. The ability to showcase a home for rent for a day or a week or two, allows you to grow a nice portfolio of properties. The more you build them out based on what you know and you attract people with interests similar to yours, the better chances we think you have of being financially successful.
Finding your target market is kind of like marketing to yourself. Where are you at in life? What are you passionate about? What are your needs? What excites you? What mission are you on?
Take those answers and build that into your short-term rental plan.