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  • Writer's pictureStacy Parkelj

Best Sized Cabins to Buy in 2024 - Deep Diving into the Data

Broken Bow-Hochatown has been one of the fastest growing short-term rental markets in the USA, with its great weather all year round, clear water lake and rolling hills. But, is it a good time to invest? And, if so, what sized cabin should you buy?

Unfortunately, there is no magic ball that will tell you that you will make money investing in Broken Bow or Hochatown or which direction occupancy and daily rates will go in the future years, as we get back to normal. The best you can do is do a lot of research, run different scenarios, and add a little prayer that demand stays higher than supply.

Vacation rental ROI is based on several factors, the most important being OCCUPANCY RATE and NIGHTLY RATE, EXPENSES, and COST of YOUR CABIN.

I pulled some data from one of our data sources that we use as a co-hosting company to price our cabins to get an idea of 2023's numbers.

You can plug your own cost-of-cabin and expense numbers in my proforma spreadsheet below along with the occupancy and nightly rates below, to determine your own ROI (Return on Investment) based on the cost of the cabin you own or are purchasing.


Stacy's BB Calculations
.xlsx
Download XLSX • 47KB


Note: Your occupancy and nightly rate can be affected by many things such as, but not limited to:

  • time of year

  • size of cabin

  • how well it is marketed

  • ratings on listing sites

  • how well you host it

  • economy

  • consumer travel habits

Let's take a look at some of the data from 2023. We use the Adjusted Paid Occupancy metric which is a little different than the "occupany" metric many use. This Occupany metric takes the number of available days minus any non-paid owner block-offs divided by the number of paid nights. This number is more accurate because it does not inflate the occupancy with days that are blocked but not making income.


Year 2023


Broken Bow 2023 Data

Before start working on your proforma worksheet, let me explain a few important things about this data.


1. We use the Adjusted Paid Occupancy metric which is a little different than the "occupancy" metric many use. This Occupancy metric takes the number of available days minus any non-paid owner block-offs divided by the number of paid nights. This number is more accurate because it does not inflate the occupancy with days that are blocked but not making income.


2. ADR stands for Average Daily Rate. The ADR's are calculated as an average of all the active listings.


3. Keep in mind these numbers are the averages. For example, we have 1 bedrooms this year that did upwards of 71% Adj. paid occupancy at $225 ADR, well above the averages. Like I said earlier, there are many factors that can impact your ADR and occupancy.


4. This chart is just meant to be a very conservative jumping-off point for you. Do not make your decisions based solely on this chart. This should be just one resource in your decision-making! Although I get these numbers from a very reliable resource, I hold no responsibility for the accuracy of these numbers!


With all that said, what can be concluded from the data?

  • The times of Covid pricing and occupancy are over.

  • While your home will likely appreciate over time, with today's home pricing and mortgage rates, you are likely to just break even so don't invest if you looking mainly for cash flow or you can't float a bad month.

  • Many owners who bought high in 2021 and 2022 are realizing losses this year and many more cabins are on the market. It may be a great time to buy if you are looking for a long-term hold on your property.

  • Full property management services are going to take a deep cut into your profits. Consider self-management or co-hosting.

Need a competitive edge over the rest of the market? Let The Utmost Host co-host your property or teach you how to self-manage! Learn more at http://theutmosthost.com







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