Booming market or lesser known areas

[Bin Chen]

I am looking into purchasing a short term rental but I am a bit stuck on which market I want to get into. I've done research on some possible locations and just wanted to see if I can get some input.

When I say booming markets I mean: Joshua tree, Poconos, smoky mountains. These are the locations that everyone thinks about when they are looking to invest into strs.

Pros:

Established rules and regulations 

Tourism Driven markets so they won't ban Airbnbs

easy to find cleaners, handymen, managers,etc

Cons:

Highly competitive. hundred of listing to choose from and more are coming

Everyone wants to look there for STRs so the price is skyrocketing lowering returns

New money means new renovations, will this mean 5 yrs down the line you will have to do a lot of work to update?

If the market crashes wouldn't these be the areas hit the hardest? 

Lesser known areas locations by universities and small getaway towns.

Pros:

Maybe just 30-40 active listings so low competition. People aren't optimized so you can go in there and become top tier relatively easy

According to airdna the returns are better.

Cons:

No regulations or regulations that are subject to change so str might be banned.

Am I missing anything? What would be a better choice in todays market?

Thanks

[Mark Miles]

Quote from @Bin Chen:

I am looking into purchasing a short term rental but I am a bit stuck on which market I want to get into. I've done research on some possible locations and just wanted to see if I can get some input.

When I say booming markets I mean: Joshua tree, Poconos, smoky mountains. These are the locations that everyone thinks about when they are looking to invest into strs.

Pros:

Established rules and regulations 

Tourism Driven markets so they won't ban Airbnbs

easy to find cleaners, handymen, managers,etc

Cons:

Highly competitive. hundred of listing to choose from and more are coming

Everyone wants to look there for STRs so the price is skyrocketing lowering returns

New money means new renovations, will this mean 5 yrs down the line you will have to do a lot of work to update?

If the market crashes wouldn't these be the areas hit the hardest? 

Lesser known areas locations by universities and small getaway towns.

Pros:

Maybe just 30-40 active listings so low competition. People aren't optimized so you can go in there and become top tier relatively easy

According to airdna the returns are better.

Cons:

No regulations or regulations that are subject to change so str might be banned.

Am I missing anything? What would be a better choice in todays market?

Thanks

 For the Poconos, your pros should actually fall under cons:

Established rules and regulations -> not true. Rapidly evolving in many Poconos townships

Tourism Driven markets so they won't ban Airbnbs -> not true. Many Poconos townships looking to restrict or ban

easy to find cleaners, handymen, managers,etc -> not true. Oversaturated Poconos STR market means dire labor shortage and not easy to find any of these things