Eastham, Massachusetts

Eastham, located on the Outer Cape of Massachusetts, is known for its beautiful beaches, proximity to the Cape Cod National Seashore, and rich historical significance. In recent years, the town has become an attractive destination for short-term rental investors. The combination of recreational offerings and its family-friendly atmosphere creates opportunities for a steady demand for short-term stays, particularly during peak seasons.

Eastham's short-term rental market is characterized by a diverse range of properties, including single-family homes, cottages, and condos. As of the latest available data, the average daily rate (ADR) stands at $387.53. This position reflects a competitive pricing strategy relative to property features and location while also suggesting a healthy demand for rentals.

The following key performance indicators (KPIs) are essential for evaluating the short-term rental market in Eastham:

• Average Daily Rate (ADR): $387.53
• Occupancy Rate: Approximately 65% (seasonally adjusted)
• Revenue Per Available Room (RevPAR): $252.90 (derived from ADR and occupancy)
• Average Length of Stay: 4.2 nights
• Market Supply: Over 300 short-term rental listings

These metrics indicate that Eastham's short-term rental market is performing relatively well, especially in terms of ADR and RevPAR. Investors should note that while the occupancy rate suggests a solid market presence, competition from nearby towns may influence it during certain periods.

Analyzing Eastham’s short-term rental market over the past decade shows a significant upward trajectory. Data suggests:

• 2013-2018 Growth: An increase in rental properties from approximately 150 to over 300. This surge corresponds with a growing interest in vacation rentals, driven by a trend towards alternative lodging.
• 2019 Benchmark: Key indicators plateaued with an occupancy rate hovering around 60%, partly due to increased competition from other Cape Cod towns.
• Post-COVID Recovery (2020-Present): The market saw a sharp recovery, with occupancy rates and ADR rising sharply as travel resumed.

Over the ten-year span, Easyham's market growth has mirrored national trends in the short-term rental sector. However, ongoing developments and shifting traveler preferences are influencing the future landscape.

The rental market in Eastham presents a promising investment opportunity for various reasons:

• High ADR and RevPAR: With an ADR of $387.53, investors can expect a reasonably strong revenue stream.
• Potential ROI: Investors may expect a Return on Investment (ROI) of 8% to 12%, depending on property management strategies, marketing efforts, and property features.
• Appreciation Potential: Real estate in coastal destinations like Eastham has a historical track record for property appreciation. Investors could see significant returns upon resale.

However, it's essential for potential investors to conduct due diligence. Factors such as property taxes, maintenance costs, and local regulations can affect overall profitability.

Seasonal fluctuations play a critical role in Eastham's short-term rental market. The peak season runs from late June through early September, during which demand surges due to beachgoers and tourism. During this period, occupancy rates can exceed 80%, with ADRs potentially rising between 10% and 25%.

Conversely, the offseason (mid-September through late May) sees a dramatic decline in rental demand, with occupancy rates sometimes dropping below 30%. While some properties may rent for weekends or special occasions during the off-peak season, revenue potential diminishes significantly.

Many investors respond to these seasonal patterns with targeted marketing and strategic pricing, which can help mitigate the dips in occupancy during slower months.

Eastham’s rental market includes a variety of property types, each with distinct performance metrics:

• Single-Family Homes: These comprise approximately 60% of the short-term rental market. They typically achieve high occupancy rates due to family-oriented travelers.
• Condos & Townhouses: These units attract couples and smaller groups, resulting in average ADRs slightly lower than single-family homes, around $350–$370.
• Unique Properties (Cottages, Tiny Houses): This niche has seen a surge in interest, especially among eco-friendly travelers. These properties often command premium prices during peak seasons due to their unique offerings.

Overall, single-family homes appear to be the top performers in terms of revenue and occupancy, while unique properties present innovative investment opportunities.

Guest preferences in Eastham primarily revolve around proximity to beaches, family-friendly features, and modern conveniences. Key amenities that attract bookings include:

• Outdoor Spaces: Decks, patios, and easy access to outdoor activities.
• Fully Equipped Kitchens: Families and groups favor rentals that allow them to prepare meals.
• Internet Access: Reliable Wi-Fi is increasingly a must-have, especially among remote workers and longer-term renters.
• Family-Focused Amenities: Properties with kid-friendly features (high chairs, play areas) tend to attract families.

Understanding and catering to these preferences can significantly enhance an investor's ability to attract bookings and maintain high occupancy rates.

Eastham, like many towns across Massachusetts, has implemented regulations regarding short-term rentals to manage growth and maintain community standards. Key regulatory factors include:

• Registration Requirements: Property owners must register their short-term rentals with the town and comply with specific safety standards.
• Insurance Mandates: Liability insurance is required for rental properties to protect both owners and guests.
• Zoning Restrictions: Short-term rentals are primarily allowed in residential zones, but certain restrictions may apply depending on location and property use.

Investors need to be vigilant in staying compliant with these regulations by maintaining their registrations and adhering to any updates in local laws. Non-compliance can lead to fines and potential loss of rental income.

Eastham's neighborhoods vary significantly in terms of rental performance. Notable areas include:

• North Eastham: Offers an array of waterfront homes and is popular with vacationers seeking beach access. Rental performance here is typically above average, particularly in summer.
• Central Eastham: This area attracts visitors for its proximity to shops and restaurants. Average rental rates are competitive, appealing to families and groups.
• South Eastham: Home to more secluded properties, this neighborhood might experience a slower rental pace but can provide higher ADRs for unique rentals.

Investors should analyze each neighborhood's specific market dynamics to identify suitable properties that align with their investment strategies.

Looking forward, ongoing trends suggest that Eastham’s short-term rental market is likely to continue evolving. Key points to consider:

1. Sustainability Awareness: Eco-tourism is rising, often reflected in property features. Rentals that utilize renewable energy and sustainable practices may capture the interest of a growing demographic of environmentally conscious travelers.
2. Remote Work Opportunities: As flexible work arrangements persist, there could be increased demand for extended-stay rentals outside the summer months, providing opportunities for year-round income.
3. Demand Diversification: Local attractions beyond beach visits, such as the Cape Cod Rail Trail, are gaining popularity. Properties close to such amenities are likely to command higher occupancy rates.

Investors should position themselves to adapt to these trends by continually adapting their offerings and marketing strategies.

1. What is the average length of stay in Eastham?
The average length of stay is approximately 4.2 nights, which reveals that guests tend to prefer longer stays during peak vacation seasons.

2. What is the best time to invest in Eastham?
Spring is often a favorable time to invest, as it allows you to prepare properties before the peak summer season, capturing peak rental demand.

3. Are there any specific zoning laws that affect short-term rentals in Eastham?
Yes, specific zoning laws regulate where short-term rentals can operate, often requiring registration with the town. Ensure that any intended investment complies with local regulations.

4. How can I maximize my rental profits during the offseason?
Strategies may include lowering prices, offering special promotions, providing extended stay discounts, and emphasizing amenities that attract off-peak visitors, such as local events.

In conclusion, Eastham, Massachusetts presents a viable opportunity for short-term rental investors, supported by its attractive ADR and overall market performance. Understanding the local dynamics, potential regulations, and seasonal patterns can help investors make informed and strategic decisions in this ever-evolving market.