Cary, Illinois

Cary, Illinois, located in McHenry County, has emerged as a noteworthy area for short-term rental investments due to its proximity to Chicago while offering a more suburban, residential experience. The town is characterized by its scenic landscapes, access to outdoor activities, and a family-friendly environment. As of 2023, Cary has a mix of single-family homes, townhouses, and condominiums, making it appealing to both visitors and investors.

Cary’s appeal as a short-term rental market can be attributed to its appeal for business travelers, families, and nature enthusiasts looking for a getaway. The short-term rental market in Cary is still developing compared to larger urban areas, presenting opportunities for investors who can tap into this burgeoning market segment.

The key performance indicators (KPIs) for analyzing the short-term rental market in Cary include:

• Average Daily Rate (ADR): The current ADR is $149.95, which is competitive for suburban markets.
• Occupancy Rate: Although specific occupancy rates for Cary are not publicly available, suburban properties typically range between 50-70% during peak seasons.
• RevPAR (Revenue Per Available Room): Calculated from the ADR and occupancy rate, RevPAR in Cary is estimated at around $75 to $100.
• Average Length of Stay: Visitors in the area typically stay for an average of 2-3 nights, making it suitable for weekend getaways.
• Seasonality Impact: The Cary market shows variations in performance during different parts of the year, influenced by seasonal local events and holidays.

Over the past decade, Cary has witnessed gradual population growth, which is reflective in the real estate market. The population increased from approximately 18,000 in 2010 to around 19,700 in 2022. The growth rate of approximately 1.2% annually has propelled demand for both long-term and short-term housing options.

The average home prices in Cary have increased, reflecting a trend that favors investment in rental properties, including those geared towards short-term rentals. Data from the U.S. Census Bureau indicated that the median home price in Cary rose from approximately $275,000 in 2013 to around $380,000 in 2023. This appreciation in property values can act as a precursor to increasing rental prices in the short-term rental sector.

Investing in Cary’s short-term rental market shows a favorable potential for ROI, particularly for investors willing to adopt a strategic approach. The combination of a relatively low entry price compared to metropolitan markets and a steady demand for rental accommodations suggests healthy profitability margins.

• Initial Investment: With average home prices around $380,000, an investor can expect a down payment of between 20-25% to participate in short-term rentals effectively.

• Potential Revenue: With an ADR of approximately $149.95 and an assumed occupancy rate of 60%, annual gross revenues could range from $32,000 to $36,000—especially during peak demand seasons.

• Operating Costs: Operating costs for short-term rentals typically range from 25-35% of gross revenue. This includes cleaning fees, utilities, property management fees, and maintenance costs.

• Projected ROI: If operational costs maintain at 30%, an investor could expect a net income of between $22,400 to $25,200 per year, yielding an ROI of approximately 6-8%, depending on property management efficiency and additional expenses incurred.

Cary experiences distinct seasonal patterns that influence the short-term rental market, with summer and weekends typically yielding the highest occupancy rates.

• Peak Season: The summer months, particularly June through August, see higher occupancy as families with children seek vacation accommodations. This period should be capitalized on with aggressive marketing and pricing strategies.

• Shoulder Season: Spring (April to May) and Fall (September to October) seasons often see moderate occupancy rates. These months can attract visitors due to local festivals and outdoor activities.

• Off-Peak Season: The winter months, especially January through March, usually experience a drop in bookings. However, holiday rentals during Christmas and New Year may still provide some revenue opportunities, albeit at lower occupancy.

The performance of different property types in Cary varies significantly based on visitor preferences:

• Single-Family Homes: These properties tend to be the most popular among families, offering additional space and amenities. They are often the preferred choice for visitors seeking a homey atmosphere.

• Condos and Townhomes: These units often cater to smaller groups or couples. While they may have a slightly lower ADR due to limited space, they can still achieve high occupancy due to their lower maintenance costs.

• Unique Properties: Properties that offer unique characteristics (e.g., waterfront locations or historical yet renovated buildings) will likely perform better in attracting guests due to their scarcity and aesthetic appeal.

Understanding guest preferences is vital for successfully managing short-term rentals in Cary. Key amenities that guests often look for include:

• Wi-Fi: Reliable internet connectivity remains a high priority due to increasing remote working trends.

• Kitchen Facilities: Many guests prefer the convenience of cooking during their stay, so fully equipped kitchens can lead to positive reviews and repeat business.

• Outdoor Spaces: A backyard, patio, or balcony is often sought after—especially during warmer months—for recreational activities and family gatherings.

• Parking: Availability of onsite or nearby parking is essential for families and out-of-town guests.

• Pet-Friendly Options: With many travelers interested in bringing along pets, offering pet-friendly accommodations can significantly enhance the marketability of a property.

The regulatory framework for short-term rentals in Cary has generally embraced the changing landscape, but potential investors should navigate local laws carefully.

• Permit Requirements: Currently, short-term rental operators may need to register and obtain permits from the Village of Cary’s local government. It’s important to follow specific guidelines to avoid fines or penalties.

• Zoning Laws: Investors should be aware of the zoning laws governing residential areas. Regulations may differ from one neighborhood to another, influencing where short-term rentals can be operated legally.

• Taxation: There are specific laws regarding taxation for rental income, and short-term rental operators in Cary may be liable for Local Hotel Tax. Staying compliant with financial obligations will be key to a successful venture.

The neighborhoods within Cary lend different characteristics and appeal, influencing rental demand:

• Downtown Cary: Known for its vibrant charm, restaurants, shops, and easy access to METRA (commuter train to Chicago), this area can attract guests looking for convenience and local attractions.

• Lake Community: Proximity to lakes and recreational areas can increase demand for short-term rentals that capitalize on outdoor activities, particularly in the summer months.

• Residential Suburbs: These neighborhoods appeal primarily to family visitors or those seeking a quieter environment. Properties here may appeal to longer stays.

The short-term rental market in Cary holds potential for growth, although several factors could influence future developments:

• Increasing Interest in Suburban Rentals: The COVID-19 pandemic shifted preferences, with many families looking for spacious accommodations away from crowded urban centers. This trend appears likely to continue, benefiting Cary.

• Emerging Local Business: Cary's economic landscape is gradually diversifying, with new businesses emerging that may create more job opportunities and attract business travelers.

• Environmental and Sustainability Awareness: More travelers are seeking eco-friendly accommodations. Properties promoting sustainable practices could benefit from this trend.

1. What is the Average Daily Rate (ADR) in Cary?

   • The current ADR in Cary is approximately $149.95.

2. What types of properties perform best for short-term rentals?

   • Single-family homes generally perform best, especially for families. However, condos and unique properties can also attract specific demographics.

3. Are there specific regulations for short-term rentals in Cary?

   • Yes, operators must comply with local regulations, including obtaining any necessary permits and adhering to zoning laws to operate legally.

4. What is the average length of stay in Cary's short-term rentals?

   • The average length of stay ranges from 2 to 3 nights due to the town's appeal for weekend getaways.

5. How can I ensure a good ROI on a short-term rental investment in Cary?

   • Focus on effective property management, maintaining high guest satisfaction through amenities, and marketing your property effectively based on seasonal demand patterns.

In summary, Cary, Illinois, presents a favorable environment for short-term rental investments. Given the relatively low entry costs, moderate ADR, and growing popularity as a suburban getaway, there are promising opportunities for both new and experienced investors. By remaining aware of market trends, regulations, and visitor preferences, investors can position themselves for success.