How to know if a small market is any good?

I was curious about a few small towns near me. They only have 4 Airbnb’s, 2 on a small lake and 2 on land. The city is an hour from Chicago in Indiana. Plenty of grocery, bars, restaurants and essentials. Not really any national events going on there though like a Chicago or Indy might have.

I looked at some of the bookings.Another has 25% of days booked for June ($40/night). Another has 20% booked in June ($125/night on lake). The last, on a farm with llamas, 43% booked, every weekend in June ($143/night).

You can buy a triplex (1bd/1ba each unit) in this city that is in great shape for only $75,000.

Not a lot of comparable. How can someone figure out if a small, maybe untapped, market is any good?

  1. Run a set up and ongoing budget to see what profit you would make based on those sort of occupancy rates. Take into all costs including your time, cleaning etc.

  2. Check with estate agents about long term rental potential (would you get more)

  3. Market research with sites like Airdna and local tourism

If you were serious about investing I suppose you could rent a place yourself in the town for 6 months and then (with the owners permission) rent it out on AirBnB (and Bookings+Tripadvisor+others) and see how it goes before buying a place. Making sure to take into account low/high seasons. A lot of people are advised to rent first before buying in the country to see it it suits them but seems most just go ahead and buy and a fair few regret that and sell up a year later when they cant get pizza delivered.

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All good suggestions so far!

Of course, working out the finances is the most important aspect. The area sounds lovely and much depends on how you market it. A small, untapped market sounds like a great opportunity to me.

P.S. Although you say there are no national events, I find that popular local events are just as good - local art fairs and food festivals really bring bookings pouring in. I’ve just looked it up and Google tells me that it’s a 2hr. 49 minute drive from Chicago to Indianapolis. Are you in between? Both places have loads of events and driving for two hours or less to get to an important one (the Indy 500 for example!) is no problem for many people.