Lincoln, New Hampshire

Lincoln, New Hampshire, is a picturesque town located in the heart of the White Mountains, known for its proximity to outdoor activities, including skiing, hiking, and sightseeing. As such, the short-term rental market here has witnessed growing interest from investors, particularly due to the region's natural attractions and its status as a gateway to outdoor recreation. The town's picturesque scenery and outdoor recreational offerings make it a desirable location for both leisure and adventure travelers, creating opportunities for short-term rental investments.

In evaluating the short-term rental market in Lincoln, some key performance indicators (KPIs) are important to consider:

• Average Daily Rate (ADR): The current ADR for short-term rentals in Lincoln is $256. This figure reflects the average price guests are willing to pay per night for accommodations.

• Occupancy Rate: Lincoln's occupancy rates typically fluctuate seasonally, with higher demand during peak tourist seasons, namely winter (for skiing) and summer (for hiking and other outdoor activities). Current levels suggest an average occupancy rate of around 65% during these peak months, which may fall lower during off-peak times.

• Revenue per Available Room (RevPAR): Based on the ADR and occupancy rate, the short-term rental market in Lincoln has a solid RevPAR that suggests moderate financial viability for investors.

• Market Supply: The supply of short-term rentals has seen a steady increase in recent years as more homeowners capitalize on rental opportunities, driving the total number of listings to approximately 500 in the area.

These KPIs indicate a well-established market, albeit one that investors need to navigate carefully due to evolving demand trends and changing regulations.

Over the past decade, Lincoln's short-term rental market has demonstrated considerable growth. The distance from urban centers like Boston and the influx of domestic tourism, especially post-2010, has led to a strong rise in rental activity. Several key factors contribute to this growth:

1. Tourism Trends: The region has benefitted from an increased interest in outdoor and experiential tourism. As travelers prioritize unique experiences, areas like Lincoln have gained popularity.

2. Online Platforms: The proliferation of short-term rental platforms such as Airbnb and VRBO has made it easier for property owners to market their homes to a global audience. This remaining trend of convenience continues to drive rental interest.

3. Economic Resilience: The economic landscape has allowed for growth in disposable income and an uptick in travel spending within middle-income households.

4. Investment in Infrastructure: Local government’s investment in infrastructure improvements, such as roads and public spaces, has also contributed to making Lincoln a more attractive destination for both visitors and investors.

However, as the market evolves, property owners must remain adaptable to potential market fluctuations and regulatory changes that could influence profitability.

Real estate investment in Lincoln’s short-term rental market offers considerable potential for returns, particularly for investors who can capitalize on optimal pricing strategy and occupancy management.

1. Positive Cash Flow: With an ADR of $256 and an existing occupancy rate of around 65%, investors can expect gross revenues of approximately $54,000 annually per unit. This figure could substantially increase during peak seasons.

2. Long-term Appreciation: Property values in Lincoln have increased over the years, which bodes well for long-term investment. Comparatively, the increase in property values over the last decade suggests a potential appreciation rate aligning with the national average, making Lincoln a promising market for long-term investors.

3. Tax Structuring: Investors can benefit from favorable tax structures when utilizing properties as short-term rentals, including deductions for maintenance and operational expenses.

While initial costs may be higher due to property acquisition and setup, the potential for seasonal revenue and long-term appreciation is an attractive proposition for investors in Lincoln.

Lincoln's market experiences pronounced seasonal fluctuations tied directly to tourism trends:

• Winter Season (November to April): Lincoln’s ski resorts attract visitors looking for winter sports. Properties are generally booked months in advance during peak weekends and holiday periods. Skiing increases demand, leading to an average occupancy rate approaching 80%, with potential peak days exceeding 90%.

• Summer Season (May to September): During the summer, activities such as hiking, mountain biking, and family-friendly attractions draw significant crowds. The occupancy rates during these months can reach about 75%.

• Shoulder Seasons (October and Late April): These periods experience the lowest occupancy rates, often falling between 40-50%. Strategies such as promotional pricing or attractive amenities may be necessary to boost occupancy during these times.

Understanding these seasonal dynamics is crucial for investors seeking to optimize their rental income throughout the year.

Different types of properties appeal to varied guest demographics and experiences. In Lincoln, some key observations regarding property type performance include:

• Condos and Townhouses: These properties often attract couples and small families seeking convenience and proximity to amenities. They typically command slightly lower ADRs but achieve higher occupancy rates due to their centralized locations.

• Single-Family Homes: Larger properties appeal to families or groups traveling together. These accommodations command higher ADRs, especially during peak periods, and see significant demand for group reservations, making them a solid investment option.

• Unique Stays: Properties that offer unique experiences, such as cabins or homes with exceptional views, often outperform more standard accommodations in terms of ADR but may require more active marketing.

Understanding these differentiations allows investors to tailor their offerings to meet guest expectations and market demands effectively.

Understanding guest preferences is vital for success in Lincoln’s short-term rental market. Key insights include:

• Location: Proximity to attractions such as ski resorts, hiking trails, and dining options significantly impacts guest choice and rental success.

• Amenities: High-speed internet access, outdoor spaces (yards, decks), and hot tubs are commonly sought-after amenities that can distinguish properties in the marketplace.

• Pet Policies: Allowing pets can improve occupancy rates, as many travelers are looking for accommodations that will allow their furry companions.

• Cleanliness and Safety: Especially in the wake of the pandemic, guests are increasingly prioritizing cleanliness protocols and safety measures, which must be clearly communicated.

Tailoring property offerings based on these guest preferences can lead to better occupancy rates and increased revenue.

The regulatory landscape for short-term rentals in Lincoln, New Hampshire, presents both opportunities and challenges:

• Local Ordinances: Lincoln has implemented specific regulations concerning short-term rentals, including licensing requirements and limitations on rental duration. Investors need to be compliant with local laws to avoid penalties.

• Community Concerns: There has been ongoing discussion within the community regarding property management and its implications on local housing availability. Full awareness of community sentiments and regulations will be crucial for investors.

• Business Regulations: Investors should also consider local tax requirements for short-term rentals, including lodging taxes that may apply.

Navigating this regulatory environment diligently will safeguard investments and ensure sustainable operations.

Understanding neighborhood dynamics is paramount for short-term rental investors seeking success in Lincoln:

• Proximity to Attractions: Areas closest to ski resorts and hiking trails tend to perform best, leading to higher guest interest. Neighborhoods like Lincoln Village and those on the outskirts of Loon Mountain are particularly favorable.

• Community Vibe: Neighborhoods that promote a suitable family environment with accessibility to local dining and attractions tend to attract longer stays.

• Competition: Certain neighborhoods may experience higher competition for rentals, requiring property owners to differentiate their offerings effectively.

Conducting thorough research into neighborhood performance can lead to more strategic investment choices.

The short-term rental market in Lincoln appears poised for continued growth as travel trends evolve. Here are some observations for future considerations:

• Sustainability and Eco-Credentials: Eco-friendly accommodations are gaining favor among travelers, and properties with green certifications or features may yield higher interest.

• Wellness Retreats: The focus on wellness and relaxation continues to be a significant trend, particularly in natural settings like Lincoln. Properties emphasizing wellness amenities, such as spa-like features or yoga spaces, can attract health-conscious visitors.

• Diverse Visitor Demographics: Lincoln is appealing to a broader audience, from families to adventure seekers, indicating that strategic marketing may allow for capturing diverse visitor profiles.

Proactively adapting to these market trends can enhance the investment landscape for short-term rentals in Lincoln.