Melrose Park, Illinois

Melrose Park is a suburban community located just 13 miles west of Chicago. This proximity to the metropolitan area provides convenient access to a wealth of amenities while maintaining a unique small-town atmosphere. As short-term rentals (STRs) gain popularity due to the convenience and flexibility they offer travelers, Melrose Park has emerged as a potential market for STR investors. The local demand is influenced by various factors, including its accessibility to major highways, public transportation, and a range of local attractions.

In assessing the performance of the short-term rental market in Melrose Park, several key performance indicators (KPIs) need to be considered:

• Average Daily Rate (ADR): The current ADR in Melrose Park is approximately $187.73.
• Occupancy Rate: Currently, Melrose Park has an occupancy rate hovering around 70%. This figure indicates a healthy demand for STRs, though it can vary based on seasonality and local events.
• Revenue Per Available Room (RevPAR): Based on current ADR and occupancy, RevPAR can be calculated at approximately $131.41.
• Length of Stay: Data shows that the average guest length of stay is about 2.5 nights, which is typical for urban-suburban rentals and reflects visitor trends in the area.

Analyzing the growth trend of Melrose Park over the past ten years reveals a steady increase in property values and rental demand. While specific historical data is limited, general market trends indicate:

• Property Values: There has been a cumulative increase in property values of around 30%, influenced by urban sprawl and continued investment in infrastructure.
• STR Supply and Demand: The number of available STRs has increased as investors have recognized the suburb's potential. This growth has been gradual but significant, impacting occupancy rates positively.
• Local Business Growth: Melrose Park has seen an influx of businesses, particularly in health care and manufacturing, leading to improved job opportunities and attracting transient workers and families.

Melrose Park offers several attractive elements for potential investors:

• Cash Flow: Given the current ADR of $187.73 and occupancy rates of 70%, operators can anticipate healthy cash flow. This is foundational to an STR investment's return on investment (ROI).
• Market Comparison: Compared to nearby areas such as Oak Park and Berwyn, Melrose Park’s ADR is competitively priced, offering value for both guests and investors.
• Appreciation Potential: The combination of suburban living with urban accessibility suggests a strong likelihood for future appreciation, especially as the area continues to develop.

On average, an investor can expect a 10-12% ROI in this market, contingent upon effective management and operational strategies.

Melrose Park experiences distinct seasonal fluctuations, which impact occupancy rates and pricing:

• Peak Season: Summer months typically see increased demand as families travel, leading to higher occupancy rates and potential for premium pricing.
• Shoulder Season: Spring and fall generally see moderate occupancy as travelers visit for events and business.
• Off-Season: Winters reflect lower demand, particularly due to colder weather; however, holiday bookings during late December can provide a brief spike in occupancy.

Understanding these patterns is crucial for setting competitive rates and optimizing occupancy throughout the year.

Different types of properties perform variably in the Melrose Park market:

• Single-Family Homes: Often favored by families seeking more space and amenities (e.g., kitchens, outdoor space), these properties report higher nightly rates and longer stays.
• Condos and Apartments: Typically cater to shorter-term business travelers and couples. They can yield good occupancy but tend to command a lower ADR than single-family homes.
• Unique Properties: Options like historic homes or modern lofts may attract niche markets—those looking for unique stays. Innovation in property styling can lead to higher desirability and pricing.

In terms of performance, single-family rentals currently dominate with occupancy rates around 75%.

An essential aspect of short-term rental success is understanding what guests look for when selecting a property:

• Amenities: Guests value amenities, with high priority given to Wi-Fi, parking, laundry facilities, and kitchen access. Properties equipped with modern kitchens tend to attract longer stays.
• Location: Proximity to Chicago’s public transportation is also a draw for guests. Many prefer locations close to grocery stores, dining options, and parks.
• Experiences: Increasingly, guests desire local experiences. Collaborating with local tour providers and suggesting area experiences can enhance visitors' stays.

The focus on providing these key amenities can significantly influence guest satisfaction and repeat bookings.

The regulatory landscape for short-term rentals in Melrose Park is continually evolving, primarily influenced by tenant protection measures and community concerns. As of now:

• Licensing: STR homeowners are required to obtain a business license, which includes stipulations around property management standards.
• Restrictions: Some zoning regulations may limit the number of homes that can operate as STRs in certain neighborhoods.
• Taxes: Property owners must remit hotel taxes on rental income, adding another layer of consideration for potential investors.

Navigating these regulations is critical for compliance and can impact profitability.

Melrose Park is divided into several neighborhoods, each offering a unique character:

• Downtown Melrose Park: Close to transportation, dining, and local attractions, this area generally commands higher rent due to its convenience.
• Northwood: Known for family-oriented amenities and parks, this area appeals to longer-term renters and families.
• West Melrose: This quieter area may attract visitors looking for a peaceful environment while still being close to Chicago.

Investors should assess which neighborhoods align with their target market and rental strategy.

Looking forward, the short-term rental market in Melrose Park is poised for growth due to:

• Regional Development: Ongoing developments in infrastructure, such as road improvements and transportation services, will likely increase demand for rentals.
• Adoption of Technology: STR management platforms are becoming sophisticated, providing owners with analytical tools to optimize pricing, bookings, and overall performance.
• Shift in Travel Preferences: The trend toward remote work means that more people are looking for unique stays, prompting demand in suburban markets like Melrose Park.

These trends indicate that investment in Melrose Park may continue to be fruitful for savvy investors who can capitalize on the evolving landscape.

1. What is the average occupancy rate for short-term rentals in Melrose Park?
The average occupancy rate for STRs in Melrose Park is approximately 70%, with fluctuations based on seasonal and market dynamics.

2. What is the average daily rate (ADR) for STRs?
The current ADR for short-term rentals in Melrose Park is around $187.73.

3. Are there any zoning laws or regulations affecting STRs in Melrose Park?
Yes, Melrose Park has implemented certain zoning regulations and licensing requirements for short-term rentals, including registration and tax stipulations. It’s crucial for investors to stay updated on changing regulations.

4. What types of properties are best suited for STRs in Melrose Park?
Single-family homes generally perform best due to their ability to accommodate families and groups, while condos and apartments are popular among shorter-stay business travelers.

5. What amenities do guests typically prefer in a rental property?
Guests often prioritize amenities such as high-speed Wi-Fi, parking, kitchen facilities, and laundry access. Unique local experiences can also enhance a property’s appeal.