Amherst, Massachusetts

Amherst, Massachusetts, is a small town located in the Pioneer Valley and is well-known for its prestigious educational institutions, including the University of Massachusetts Amherst, Amherst College, and Hampshire College. This academic community plays a significant role in the demand for short-term rentals, especially during the academic year and for special events like graduations and family weekends.

As of October 2023, the average daily rate (ADR) for short-term rentals in Amherst stands at $198.80. Given its unique positioning, the market largely sees fluctuations based on the academic calendar and seasonal tourism.

To gauge the health of the short-term rental market in Amherst, it is crucial to evaluate several key performance indicators (KPIs):

• Average Daily Rate (ADR): $198.80
• Occupancy Rate: The average occupancy rate is currently around 65%, which is considered reasonable for a college town.
• Revenue Per Available Room (RevPAR): This is calculated by multiplying the ADR by the occupancy rate, resulting in approximately $129.22 per available night.
• Length of Stay: The average length of stay in Amherst is about 2.5 nights.
• Number of Active Listings: There are approximately 250 active short-term rental listings in the area, indicating a moderately competitive market.

Over the past decade, the short-term rental market in Amherst has experienced steady growth, reflecting national trends. While initial interest in Airbnb and similar platforms began to rise around 2011, the local market took a few years to catch up due to skepticism around using home-sharing services.

From 2013 to 2023, the number of short-term rental listings has increased by nearly 150%. This growth has been driven by several factors including:

• Increasing tourism drawn by local attractions and events.
• Growing acceptance of short-term rentals by homeowners and investors.
• The expansion of local ordinances supporting rental platforms.

Given the rate of growth and demand from both tourists and university visitors, it is reasonable to predict that the market will continue to expand steadily over the next decade.

With an ADR of $198.80 and an average occupancy rate of 65%, investors can expect a reasonable return on investment from short-term rentals in Amherst. Here's a breakdown:

• Annual Revenue Calculation:
  • Potential Gross Revenue: $198.80 (ADR) x 365 (days) x 0.65 (occupancy rate) = $47,163
  • Operating Expenses: Average operating expenses for short-term rentals range from 20% to 30% of gross revenue. Assuming operating expenses of 25%, the total would be around $11,790.
  • Net Revenue: $47,163 – $11,790 = $35,373

This estimated net revenue suggests a healthy ROI from short-term rental investments, depending on the initial investment cost. However, potential investors should also consider additional costs such as property management, cleaning fees, and local taxes when determining profitability.

Amherst's short-term rental market displays significant seasonal patterns influenced by the academic calendar, local events, and tourist seasons:

• Fall Semester (August – December): This period typically sees high demand due to students returning to university and their families visiting. Events such as football games and college tours add to visitor numbers.
• Winter Break & Holidays (December): While academic activities slow down, holiday gatherings also drive demand for short-term rentals. Families often seek rentals for holiday accommodations, particularly during graduation weekends.
• Spring Semester (January – May): Similar to the fall, this season experiences heightened occupancy due to students and their families visiting. Additionally, the local attractions in spring, such as the Amherst Farmers Market, can draw tourists.
• Summer (June – July): Summer sees a dip in full occupancy as students leave for break, but family travelers and event attendees still sustain rental demand.

Investors should consider these seasonal trends when structuring their rental strategies.

The performance of short-term rentals in Amherst varies based on the type of property:

• Single-Family Homes: These homes generally yield the best performance due to their ability to accommodate larger groups of families visiting students or attending local events.
• Apartments & Condos: These properties cater to solo travelers or couples, typically translating to lower occupancy rates and rental income.
• Unique Stays: Listings offering unique experiences (e.g. cabins, historic homes) attract niche markets but may not achieve as high occupancy throughout the year.

Property owners must evaluate which property type they hold or seek before investing, aligning it with local trends and guest preferences.

Understanding what guests look for in a rental can substantially impact success rates in this market. Common preferences include:

• Proximity to Campus: Many guests prefer locations close to universities or college sports events.
• Parking Availability: Accessibility is a priority, especially for families or groups traveling together.
• Wi-Fi and Workspaces: Business travelers and students often need reliable internet access and suitable workspaces.
• Pet-Friendly Options: Offering pet-friendly arrangements can broaden the rental's appeal, especially for families or visitors looking to bring pets along.

Amenities such as updated kitchens, laundry facilities, and outdoor spaces also contribute to guests’ experiences and can influence the choice of rental property.

The regulatory landscape for short-term rentals in Amherst is managed by local ordinances that have evolved to balance the interests of residents and the tourism economy. Key regulations include:

• Registration Requirement: All short-term rentals must be registered with the local government.
• Room Limitations: Some local laws may restrict the number of rooms that can be rented out in a single property.
• Zoning Restrictions: Certain zones may prohibit short-term rentals altogether, limiting availability in some neighborhoods.

Understanding local regulations is critical for any potential investor, as non-compliance can lead to fines or revocation of rental licenses.

Amherst is composed of several distinct neighborhoods, each offering unique opportunities and challenges for short-term rental investors:

• Downtown: Ideally situated for guests wishing to explore cultural attractions, cafes, and retail options. Demand is high, but rentals can be competitive.
• North Amherst: More residential feel; family-friendly, offering lower rental rates but good occupancy due to long-term student housing.
• South Amherst: Close to natural amenities and parks; slight tourism in the summer can benefit investors with properties that provide outdoor access.

Neighborhood specificity plays a vital role in determining rental success, and potential investors should assess local demographics, property values, and guest preferences.

The short-term rental landscape in Amherst is likely to evolve, shaped by national trends as well as local variables:

• Sustainability Focus: Travelers are increasingly looking for eco-friendly rentals. Properties with sustainable features may attract especially environmentally-conscious guests.
• Remote Work Surge: As remote work continues to gain popularity, an influx of "workcation" tourists may further boost demand for short-term rentals.
• Technological Advancements: Innovations in smart home technology could become a deciding factor for guests, influencing how properties are marketed.
• Increased Local Taxation: As municipalities and states seek additional revenue, short-term rental tax regulations may become more stringent, impacting profitability.

Overall, the Amherst short-term rental market presents a mix of opportunities and challenges. Investors willing to stay informed and adapt to changing conditions can find success within this unique landscape.