Absecon, New Jersey

Absecon, located in Atlantic County, New Jersey, serves as an appealing destination for travelers seeking access to the Atlantic City area, offering visitors a quieter setting just minutes away from the bustling nightlife and attractions of the famed seaside resort. The short-term rental market in Absecon has gained momentum in recent years, influenced by the increasing popularity of the sharing economy and a growing number of tourists who are favoring the comforts of home-like accommodations over traditional hotels.

The local short-term rental market is characterized by a broad range of property types, including single-family homes, condos, and townhouses. Absecon’s proximity to major highways and its transportation options enhance its attractiveness as a short-term rental destination.

Currently, the average daily rate (ADR) for short-term rentals in Absecon stands at $262.17. This figure reflects the market's overall pricing strategy amid varying demand levels. Some additional key performance indicators worth noting include:

• Occupancy Rate: As of October 2023, average occupancy rates hover around 66%, indicative of solid demand, especially during peak tourist seasons.
• Revenue per Available Room (RevPAR): This key metric provides insights into overall revenue potential, calculated as the product of ADR and occupancy rate. At the current ADR and occupancy rate, RevPAR is estimated at approximately $173.03.
• Length of Stay: The average length of stay in Absecon rental properties is approximately 2.5 nights, which can impact pricing strategies and turnover rates for property owners.

Over the past decade, Absecon has experienced consistent growth in its short-term rental market, driven largely by increased tourism in nearby Atlantic City. The number of short-term rentals in Absecon has increased by roughly 30% since 2013, while rental rates have surged by around 12%. The growth in ADR and occupancy rates suggests a burgeoning interest in accommodations that cater to families and groups looking to enjoy the attractions without the chaos of the city center.

Key drivers behind this growth include:

• Tourism Trends: The rise of vacation rentals has paralleled increased visitor numbers to Atlantic City, with tourists seeking a balance of convenience and comfort.
• Local Investments: The city has seen investments in infrastructure and amenities that enhance its appeal, including park developments, dining options, and recreational activities.

Investing in Absecon's short-term rental market presents opportunities for solid returns, especially for investors focusing on residential properties that cater to leisure travelers. Calculating ROI is essential, taking into account both income potential and local market dynamics:

• Potential Income: Based on the current ADR of $262.17 and an occupancy rate of 66%, owners can expect an estimated gross revenue of about $46,876 per unit annually, assuming average guest turnover.
• Costs: Property owners should account for costs such as property management services, maintenance, cleaning services, and local taxes. Estimating yearly costs at approximately 30% of potential income could leave an estimated net income of $32,813 per year per unit.
• ROI Calculation: To determine ROI, the initial investment should also be factored in. If a property is purchased for $300,000, potential yields and the annual net income would result in an ROI of approximately 10.94%, making it an attractive proposition.

The short-term rental market in Absecon exhibits distinct seasonal patterns, heavily influenced by regional tourism trends. The peak season typically runs from late spring through early fall, coinciding with favorable weather and numerous events in Atlantic City:

• Peak Season (May to September): The summer months draw the highest occupancy rates, reaching as much as 85% in July and August. This is when rental pricing can be optimized to maximize revenue.
• Shoulder Season (April & October): These months see moderate traffic, often attributed to local events and conferences held in Atlantic City. Occupancy rates might average around 60-65%.
• Off-Peak Season (November to March): Winter months show lower occupancy, sometimes dropping to 40-50%. Rental owners may need to adjust strategies or pricing to attract longer stays or niche markets, such as snowbirds.

Absecon’s rental market comprises diverse property types, each performing differently based on demand, features, and market positioning:

• Single-Family Homes: These properties tend to attract families or larger groups looking for more space. They often outperform other types during peak summer months because they offer amenities like backyards and family rooms.
• Condos and Townhouses: More affordable options can appeal to couples and smaller groups, often leading to higher occupancy rates year-round. Given their proximity to area attractions, these properties can be consistently booked, especially during weekend events.
• Luxury Rentals: While fewer in number, high-end rentals can command premium pricing and capture niche markets during peak seasons. Their success largely depends on effective marketing.

Understanding guest preferences is crucial for maximizing the appeal and profitability of short-term rentals:

• Amenities: High-demand features include Wi-Fi, parking, fully equipped kitchens, air conditioning, and outdoor spaces. Properties that offer unique experiences, such as themed decor or access to local tours, tend to stand out.
• Value Proposition: Guests increasingly favor accommodations that provide value in both price and experience. Competitive pricing strategies combined with excellent customer service and cleanliness have proven to yield positive guest reviews.
• Local Experiences: Tourists are looking for ways to immerse themselves in the local culture. Providing information on nearby attractions, dining options, and outdoor activities can enhance the overall guest experience and improve reviews.

Absecon's regulatory landscape for short-term rentals is still evolving. New Jersey has laws intended to address zoning and taxation related to short-term rentals:

• Licensing Requirements: Property owners offering short-term rentals must be aware of local regulations and necessary permits. Currently, registration with the city is required to operate legally.
• Zoning Laws: Certain areas have restrictions on rental types or the number of rentals permissible in a given zone. It’s essential for investors to consult local zoning ordinances before purchasing investment properties.
• Tax Obligations: New Jersey enforces the collection of occupancy taxes on short-term rentals. Investors should factor these taxes into income projections and consider the costs associated with compliance.

The appeal of neighborhoods within Absecon plays a significant role in determining rental performance. Key observations include:

1. Proximity to Attractions: Properties closer to the junction of major roads leading to Atlantic City generally attract higher occupancy rates due to ease of travel to attractions.
2. Safe & Family-Friendly Areas: Neighborhoods that advertise their community safety and amenities such as parks and schools often draw families and long-term visitors.
3. Real Estate Trends: Certain neighborhoods are projected to grow as commercial development expands, meaning that early investments could yield higher returns in the future.

The future of the short-term rental market in Absecon looks promising, buoyed by ongoing development and changing guest preferences.

• Growth in Remote Work: The rising trend of remote work allows longer-term stays, which could spur demand. This may attract guests looking for a tranquil environment conducive to work during weekdays while enjoying leisure activities on weekends.
• Sustainability Practices: Travelers increasingly seek eco-friendly accommodations. Properties that incorporate green practices may appeal to a growing segment of environmentally conscious travelers.
• Increased Competition: As the market matures, competition is likely to increase, necessitating that property owners invest in marketing and guest services to differentiate their rentals.