Calculating Vacancy Rates for STR
Hi Everyone! Im new to biggerpockets and this will be my first post! I was wondering how much do people budget for vacancy for seasonal rentals. Im looking to do a STR in Ocean City Maryland and the vacancy rate, if I'm fully booked in the peak season (May -Sept), would be 58%!. That seems like a lot to budget from the monthly rent. Thank you for helping!
-Paul
Most Popular Reply
Welcome Paul!
I would think that in a seasonal area like Ocean City you could expect occupancy rates of 40-60% on an annual basis. You would want to employ strategies like 3 or more night minimums to encourage week long bookings and weekly discounts.
I would actively adjust prices to maximize revenue. In the off season, I would market to work crews and others who might travel to the area for several weeks at a time. Even in high traffic cities it can be tricky to keep occupancy over 85%, so you would have to be very competitive with your property to hit the 60% mark in my opinion where seasonality is so strong.