Ashland, Kentucky

Ashland, Kentucky, situated in the northeastern part of the state near the Ohio River, has been gaining attention as a potential investment area for short-term rental (STR) investors. This small city, with a population of approximately 21,000, serves as both a suburban haven and an entry point to regional attractions including parks, local arts, and the proximity to larger cities like Huntington, West Virginia, and Ironton, Ohio.

The short-term rental market in Ashland benefits from its position as a regional hub, offering a blend of residential comforts and access to urban amenities. As more travelers seek unique accommodations over traditional hotels, localized STR has become an attractive alternative. The current Average Daily Rate (ADR) in Ashland is approximately $109.15, reflecting a competitive edge within the broader market.

Understanding the viability of a short-term rental investment in Ashland requires examining several key performance indicators (KPIs):

1. Average Daily Rate (ADR): Currently, the ADR is $109.15. This figure is crucial in assessing pricing strategies.
2. Occupancy Rate: The average occupancy rate in Ashland typically hovers around 65-75%. Local events and seasonal tourism can significantly influence these metrics.
3. Revenue Per Available Room (RevPAR): Combining ADR and occupancy, Ashland's estimated RevPAR stands at approximately $72.00, positioning the market favorably for STR investors.
4. Length of Stay: Visitors tend to stay an average of 2-4 nights, with longer stays often correlating with regional events or family visits.
5. Str Supply: The market has seen an increase in available short-term listings to cater to demand, but it still remains manageable compared to larger markets.

Over the past decade, Ashland has seen steady growth in its tourism and STR market, which can be attributed to several key factors:

1. Infrastructure Improvements: Investments in the local infrastructure, including road repairs and public amenities, have made Ashland more accessible and appealing to visitors.
2. Regional Attractions: The development of nearby attractions, such as parks and arts centers, has drawn more visitors, enhancing the market's appeal.
3. Technological Advancements: The rise of online booking platforms has facilitated easier access for guests searching for STR options, leading to increased competition and visibility for property owners.
4. Population Stability: Ashland has maintained a stable population coupled with an influx of visitors from neighboring cities, contributing to market growth.

Future projections indicate a potential CAGR (Compound Annual Growth Rate) of around 4-6% over the next decade for the STR market in this area.

Investing in short-term rentals in Ashland presents a balanced risk-reward scenario:

1. Average Cap Rate: STR investors can expect to see cap rates ranging from 8% to 10%, which is favorable compared to national averages.
2. Local Market Trends: As the area experiences increased tourism from its strategic location and attractions, property values and rental rates may rise, enhancing investment returns.
3. Initial Investments: The cost of entry for STR properties tends to be lower than national averages, with single-family homes often purchasable in the low to mid $100,000s, providing new investors with more accessible entry points.
4. Potential Challenges: Investors should be prepared for fluctuations in occupancy rates during the off-season and should consider diversifying property types or investing in management services to maintain occupancy.

Ashland's STR market is characterized by distinct seasonal patterns influenced by local events and regional tourism:

1. Peak Season: The summer months (June to August) witness heightened activity, driven by family vacations, local festivals, and recreational activities along the Ohio River.
2. Shoulder Seasons: Spring (March to May) and fall (September to November) serve as transitional times where occupancy rates fluctuate but can still yield substantial returns during events like the Ashland Candlelight Tour and local craft fairs.
3. Off-Season: Winter (December to February) tends to be quieter, but strategic pricing and promoting winter activities can help maintain occupancy.

Effective marketing strategies that highlight local events during peak seasons, alongside a carefully managed low-season strategy, can help investors maximize returns throughout the year.

Different property types see varying performances in Ashland:

1. Single-Family Homes: These properties typically yield higher occupancy rates and ADRs due to their spacious nature, allowing families to stay together during visits.
2. Condos/Apartments: This segment caters to younger travelers and professionals looking for shorter stays. However, they often see lower ADRs compared to single-family units.
3. Unique Stays: Properties that offer unique experiences, such as cabins or converted buildings, can stand out and achieve higher occupancy rates due to their novelty.

Investors should consider local demand trends when selecting property types to renovate or invest in for STR purposes.

Understanding guest expectations is crucial for STR success in Ashland:

1. Key Amenities: Guests often prefer amenities such as complimentary Wi-Fi, parking, and fully equipped kitchens. Additional offerings, like hot tubs or proximity to attractions, can set properties apart.
2. Safety & Cleanliness: Guests increasingly prioritize cleanliness and safety in their accommodations. Ensuring rigorous cleaning standards can lead to positive reviews and repeat business.
3. Local Experiences: Many travelers seek immersive experiences. Offering recommendations for local dining, activities, and events can enhance the overall guest experience and differentiate your rental.

Investors should align property upgrades with these guest preferences to boost occupancy and overall satisfaction.

The regulatory landscape for STRs in Ashland has been evolving in response to both local government concerns and resident feedback:

1. Zoning Laws: Ashland maintains regulations that govern the locations and types of properties that may function as short-term rentals. Investors should familiarize themselves with relevant zoning laws to ensure compliance.
2. Licensing and Permits: Properties frequently must secure special permits to operate as STRs. It is essential for investors to stay updated on local legislation changes that impact the regulatory burden associated with STR management.
3. Taxation: STR owners are subject to local occupancy taxes, which can influence pricing strategies. It is prudent to incorporate these considerations into overall financial projections.

Understanding these regulations is pivotal for maintaining operational continuity and fostering positive community relations.

The characteristics of different neighborhoods within Ashland greatly impact STR performance:

1. Downtown Ashland: This area attracts business travelers and tourists visiting local theaters, businesses, and galleries. STRs here tend to perform well year-round.
2. Residential Suburbs: Family-friendly neighborhoods see strong demand, particularly during summer months and holidays where families seek larger accommodations.
3. Proximity to Attractions: Areas close to parks or recreational activities may witness elevated demand during peak seasons; thus, investors should consider the potential of their chosen neighborhood's location.

A thorough neighborhood analysis can help investors target ideal investment properties based on local demand and vacancy rates.

The outlook for the short-term rental market in Ashland is promising:

1. Growth Potential: Given ongoing investments in local tourism-related infrastructure and increased interest in the arts, the market indicates a solid potential for continued growth. Future developments may also bring additional visitors to the area.
2. Technological Influence: Continued advancements in booking technology are likely to enhance the guest experience and improve property management. Adopting updated technology in marketing and property management can lead to higher occupancy and satisfaction.
3. Focus on Sustainability: As sustainability grows into a priority for travelers, properties implementing eco-friendly practices may capture consumer interest and enhance marketability.

Investors who remain adaptable to evolving market conditions and trends will likely see improved returns from their short-term rental investments in Ashland.

1. What is the average occupancy rate for STRs in Ashland?

   • The average occupancy rate typically ranges between 65-75%, depending on the season and local events.

2. How much can I charge for a short-term rental in Ashland?

   • The current Average Daily Rate (ADR) is approximately $109.15, but this may vary based on property type and location.

3. Are there regulations regarding short-term rentals in Ashland?

   • Yes, there are zoning laws and potential licensing requirements for operating STRs. It's essential to understand local regulations before investing.

4. What property types are the best for short-term rentals in Ashland?

   • Single-family homes tend to perform well due to their larger space for families. Unique stays also attract guests looking for memorable experiences.

5. What is the expected ROI for STR investments in Ashland?

   • Investors can expect a cap rate ranging from 8% to 10%, making it a compelling option for long-term investment.

In conclusion, Ashland, Kentucky presents a balanced market for short-term rental investors focused on growth potential and versatile property choices. With careful analysis of local trends and regulatory considerations, investors can successfully navigate this emerging STR landscape.