Bethlehem, New Hampshire

Bethlehem, New Hampshire, is a charming town nestled in the White Mountains, known for its natural beauty and a variety of recreational activities. As a destination for outdoor enthusiasts and those looking to escape urban life, the town has seen an uptick in interest from short-term rental investors, particularly as remote work arrangements continue to persist.

While the town itself has a small year-round population, its attractiveness during the peak tourist season positions it as a viable market for short-term rentals. The current average daily rate (ADR) of $261.44 reflects a growing acceptance and reliance on rental accommodations for visitors.

To better understand Bethlehem's short-term rental market, several key performance indicators (KPIs) need to be emphasized:

• Average Daily Rate (ADR): As stated, the current ADR is $261.44. This figure can act as a barometer for pricing strategy.
• Occupancy Rate: The average occupancy rate in Bethlehem typically hovers around 55% to 65%, with fluctuations throughout the year influenced by tourism patterns.
• Length of Stay: The average guest length of stay in short-term rentals is approximately 3 to 5 nights, which is aligned with the typical vacation period for families and individuals visiting the area.

These KPIs provide a strong foundation for assessing the performance of short-term rentals in Bethlehem.

Examining growth trends over the past decade reveals both the challenges and opportunities facing Bethlehem's rental market. The demand for short-term rentals has generally increased due to:

• Tourism Growth: As outdoor recreation gained popularity, more tourists began visiting the area, particularly for hiking, skiing, and fall foliage-viewing.
• Economic Factors: Economic recovery post-2020 has instigated increased travel, further contributing to short-term rental demand.

However, it is essential to note that growth has not been linear. Market saturation during peak seasons has led to increased competition, which puts pressure on occupancy rates and prices. Conversely, off-peak months see significant declines in booking volume, necessitating strategic adjustments by property owners.

Investors considering Bethlehem should evaluate the investment potential based on several factors:

• Cost of Entry: Property prices in Bethlehem are generally lower compared to larger towns and cities in New Hampshire. Investors can find properties ranging from around $200,000 to over $400,000, depending on size and location.
• Potential Returns: With an ADR of $261.44 and a typical occupancy rate of 60%, gross income projections can be made. For example, a property rented at this ADR with 180 booked nights would yield an estimated revenue of around $47,000 annually. After accounting for operational costs (cleaning, maintenance, management fees), this could result in a net income of approximately $30,000, leading to an ROI that varies by property but can be compelling.
• Exit Strategy: The natural beauty and appeal of Bethlehem make it not only a rental property but also a long-term hold as property values are likely to appreciate over time, especially in a post-pandemic landscape that favors remote work availability.

Bethlehem experiences clear seasonal fluctuations in its rental market:

• Peak Season: Summer months (June to August) and the fall foliage season (late September to mid-October) draw the largest crowds. During this time, occupancy rates can soar to over 80%. Many families take advantage of the pleasant weather for outdoor activities, hiking, and festivals.
• Winter Season: With proximity to the area's ski resorts, winter also presents opportunities. Though booking levels can be more unpredictable, December through February shows increased demand during holiday weeks.
• Off-Peak Months: Spring and late fall are typically slower periods, with occupancy rates dipping to around 40%. Property owners would need to adjust strategies (such as competitive pricing or enhancing amenities) to maintain engagement with potential renters during these periods.

Different types of properties perform distinctively in Bethlehem’s short-term rental market:

• Cabins and Cottages: Generally favored for their cozy feel and connection to nature, these properties perform exceptionally well and can command higher ADRs.
• Single-Family Homes: Attract families and larger groups, especially during holiday seasons. The demand for such properties tends to reflect the seasonal trends outlined earlier.
• Condos & Townhomes: While these might offer a lower entry price point, their performance is sometimes impacted by amenities. Investments in property management and guest experience can enhance returns in these scenarios.

The diversification in property types presents opportunities for investors targeting specific demographics or guest preferences.

Understanding guest preferences is vital for maximizing occupancy in Bethlehem. Analysis suggests:

• Outdoor Features: Properties with access to outdoor activities, such as hiking trails, patios, or fire pits, tend to have higher bookings.
• Family-Friendly Amenities: Features such as game rooms, full kitchens, and accommodations for pets can significantly enhance appeal, particularly to families.
• Unique Designs: Properties that offer a unique aesthetic—such as rustic decor or modern finishes—can differentiate themselves in a crowded market.

A proper understanding of these trends allows investors to tailor their offerings to suit prospective guests better.

New Hampshire's regulatory environment surrounding short-term rentals is relatively lenient compared to urban centers, yet certain ordinances may apply:

• Licenses and Registration: Bethlehem does not currently require a specific license for short-term rentals; however, property owners must adhere to town zoning ordinances.
• Tax Obligations: Short-term rental owners must collect state taxes, and any specific local taxes should be confirmed with the town.
• Insurance: Investors should be proactive in obtaining liability insurance to protect against potential claims arising from renting.

Being informed and compliant with local regulations is essential to protect investments and avoid fines.

Bethlehem is composed of diverse neighborhoods that cater to various guest demographics:

• Downtown Area: Vital for attracting guests who enjoy nearby amenities like shops, restaurants, and cultural sites. Properties in this area often see higher occupancy during festivals and local events.
• Rural Settings: Properties located further from the center of town appeal to those seeking solitude and nature. While these might not command foot traffic, they can inspire longer stays.
• Close to Ski Resorts: The proximity to ski resorts attracts a distinct segment of winter visitors, making listings in these areas particularly valuable during winter months.

The neighborhood character and property location play vital roles in differentiating potential investments.

Looking ahead, several trends are expected to influence Bethlehem's short-term rental market:

• Sustainability Practices: Growing awareness of sustainability may incentivize eco-friendly properties or practices, catering to environmentally conscious travelers.
• Increased Remote Work: If remote work remains prevalent, demand for longer stays outside major cities may rise, benefiting rural areas like Bethlehem.
• Health and Safety Considerations: Continuous emphasis on cleanliness and safety protocols may become a priority for guests, which could further motivate property owners to invest in better amenities.

Staying ahead of these trends can help investors remain competitive in an evolving marketplace.