Do You Evaluate the Property First or the Market First?

[David Blake]

Most STR investors spend a huge amount of time evaluating properties and surprisingly little time evaluating markets.

After analysing several very different STR destinations—including Breckenridge, Whitefish, Moab, Bar Harbor, and Springdale—I've noticed that the strongest markets tend to share a handful of common characteristics:

• Durable tourism demand
• Pricing power (ADR resilience)
• Limited supply growth
• Strong revenue potential
• Long-term destination appeal

What's interesting is that these characteristics show up in very different ways depending on the market type.

For example:

A ski resort market such as Breckenridge derives demand from winter tourism and affluent destination travel.

A national park gateway market such as Moab relies heavily on visitation growth and outdoor recreation trends.

A coastal destination such as Bar Harbor has an entirely different seasonality profile again.

My question for the BiggerPockets community:

When you're evaluating a potential STR market, what metric carries the most weight?

• Occupancy?
• ADR?
• Revenue per listing?
• Supply growth?
• Something else?

I'd be interested to hear how others approach market selection.

[John Underwood]

If it is not a good market to start with no point in evaluating properties in a bad market.