Should I Start an Airbnb with Little Supply in the Area??

One of the questions we see time and time again in our facebook group is “Am I too early for AirBnB in my community?”

The basic premise is this, we see people who are really interested in doing AirBnB for short term rentals but they perhaps live in a rural area or they go online as we recommend and they see that there is not a ton of competition and so the question they rightfully ask is “Is there not a lot of listings because there is no demand?” Meaning that people don’t come to this rural area or this in-between city. Or, it is that I am just early and a lot of the people that are in this rural area either aren’t interested or can’t short term rental? So which is it, an opportunity or a problem location that shouldn’t really have AirBnB?

Here’s the way we look at it:

Do People Travel There? 

Are there other hotels? is there a reason that people would come to this location? It could be anything from a university to a national park, it could be because of a historical location or is could just be a great place to relax. So when you take a look at the tourism that is in the area…is there tourism? Or is there simply no tourism because of lack of lodging?

One of the examples I like to give is this:

If there is a twelve hour drive and people go from City A to City B over that twelve hour drive and there is no lodging in the middle, there is likely to be someone who wants to break that drive up and stay in the middle. So, if you have a home in that middle area, it might be a good opportunity. Especially, if there is not a lot of competition. Remember, not everyone will want to stop, but some peopel certainly would!

The way that I like to think about it is you want to reign in the demand that exists that may not have supply. People want to come, but they just have no opportunity. That is a good opportunity for you. However, you don’t want to be on the side of the equation trying to convince people that this is a great place to stop or a great place to stay. Your job as a short term rental host isn’t to be the chamber of commerce and start to attract people to your location, that is a losing proposition that is unlikely to yield success in the time frame that you allow yourself to be successful in short term rentals. We all have this finite period we want immediate, overnight success and gratification. If you’re in the right place and have the right listing, you should have guests booking your listing relatively quickly. We are talking days, if not weeks, as opposed to months or years. So if you’re in the wrong location and you’re just not getting any hits. Either your listing is not good, your pricing is too high or there may be zero demand. Maybe nobody wants to stop in that town.

How Often will People Stay There, and What Seasons?

So if you launch your listing at a beach area in the middle of winter, people are not going to want to stay there. That’s why I encourage looking for short term rentals if this is a business of yours beyond just a side gig business then you want to choose locations that there are at least two seasons. You don’t want to put all your eggs in one season basket. You could have a great year or a terrible year and its kind of binary, right?

Yes, or No.

So the best way to think about it is, am I in a place that has the potential to have year round listings, will people come there, and for what purpose? So the fact that there is no competition would be a fabulous thing. You could own that market. You can start to generate reputation, reviews, five stars, and slowly increase your price. Now that is a hard barrier for some new entrant to compete against. Remember, you want to make sure that everything I talked about exists for you before moving forward.


One of the things that is really popular right now in AirBnB is people are looking for experiences. They want to be in an airstream in some remote spot or deep in the jungle or whatever it is. What this means is there is not a lot of competition. At the same time, before you go an invest in that, let’s make sure that from a business perspective, as well as an operations perspective, that you can do it sustainably and repeat the process time and time again. So, what is turnover going to look like in the middle of wherever this exotic place is without a lot of competition. If you happen to live there and you can do all the laundry and clean it up, then you’ve got it taken care of. If this is purely an investment, and you feel as though this is an up and coming area and there is no competition, how are the cleaners going to get there? How are you going to get your supplies there? Let’s really start to think about the running of the business in advance of the exotic and exciting dream of owning a yurt in the jungle.

So if you go through all those exercises and you find there is not a lot of opportunity today in that area, well don’t be despondent, that’s okay! There are plenty of other areas in the world, the next town, or state that do have great demand. Do not feel committed or compelled to to just go with your first idea. Spend a little bit of time and energy to get your first property located in the right place so that it is successful and generating free cash flow that allows you to reinvest and grow your business.

That definitely exists, and I am a firm believer that short term rentals and home sharing and so on is here to stay.

Just because it is not in that area today does not mean that six months or six years from now it won’t be a great place. The bigger question I have for you is do you have the lasting power to be there six years from now when that is now a good spot to AirBnB? If the answer is no, then let’s pick you a good spot so when you are doing this six years from now, you can grow into that other area, and then another, and another.


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