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Updated almost 3 years ago, 01/17/2022
What are some of the best markets for Air BNB
I am very much intersted in growing my Air BNB rentals. What do you feel are some of the best markets for Air BNB? I have been trying the Pigeon Forge/ Gatlinburg market but I've been out bid on EVER offer in the past 12 months (and I'm always over asking price). I'd love some insight for all of you in the BP community.
Thanks so much,
Nick
Bid more. :) if you've been bidding for a year, you've seen prices go up 30-50% while you were trying to save 1 or 2% on an offer. Ive closed on 2 cabins in the past 3 months, but it takes multiple offers to win.
Avery here loves the Destin market. Myrtle Beach and Branson and Orlando are perennial favorites. Basically anything with near year-round occupancy and driven by tourism will be good. And no strong lobbies or anti-STR cities like Vegas or New Orleans.
I answered this question and analyzed vacation rentals almost every day for the last 3 years in my former job. Right now I would consider the following places to look.
My personal top 10:
top 3 investor markets - Pigeon Forge/Gatlinburg, TN (Yes, it's hard to get something there); Poconos, PA; Branson MO.
Then the rest:
Broken Bow, OK.
Hot Springs, AR.
Destin, FL.
Cape Coral, FL.
Blue Ridge, GA.
Alma/Fairplay, CO.
Phoenix (*Do a hybrid play where you Vacation rent in winter, then short term lease to corporate renters or traveling nurses Summertime)
I personally would like to own in the above mentioned areas as a portfolio and that's my plan.
Honorable Mentions:
Hilton Head, SC
Myrtle Beach, SC
Massanutten, VA
Killington or Southern, VT by ski areas
Granby/Grand Lake, CO
Lake Travis or Lake Granbury TX
Lake Havasu City
Cocoa Beach, FL
Traverse City, MI
Black Hills, SD
Island Park, ID
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Echoing what Justin said, Vegas = No go. New Orleans = also a No Go.
I would argue that Disney World area is getting crushed with oversupply and investors should avoid.
@Nick Troutman just stick with it. Patiences and persistence. I’ve gotten a 4 bed and a 5 bed in the Smokies in the past couple months. It’ll happen.
@William Beck Thanks for all the input. This is incredible. Just out of curiosity, when you say you analyzed short term vacations for your former job, what was that? Sounds interesting. Thanks again!
@Justin Anderson I totally agree, though I am now coming across two issues, 1. the numbers don't work as well if I over pay. 2. The houses aren't apprising for the price they are selling for. I just had a cabin that I loved that was selling for the new standard in Gatlinburg area for a 3/2 and it was selling for over 100K more than what it would appraise for. The sellers had 3 contracts already fall through because of this and were just waiting for a cash offer. I know these are all problems that can be overcome though they are still issues at hand.
@Avery Carl I will continue to be patient. Glad to hear you got a couple new cabins.
@Nick Troutman I'll also add, we do a fair amount of off market deals for our clients, I got one of my new ones through that stream, but one I snagged right off the MLS. Offered 40k over asking and it still appraised 20k over the contract price. It was just a right place right time thing. So it'll happen eventually, it's just not a situation where there are 20 good deals just sitting on the market at any given time like it used to be.
@Nick Troutman I was a Home Buyer Consultant for Evolve Vacation Rental, nationwide management service. The company had a LOT of data. Data showing how much $$$ people were making, and in some cases how much $$$$$ and other cases how little $. I wanted to soak that up and know where get the best real estate investments in the whole country for personal interest reasons and I learned quite a bit. Here's more info on the team there: https://evolvevacationrental.c...
I decided to go the realtor route so I could get closer to deals and broaden my experience. So far so good!
Excellent info! That's cool, Evolve seems like a good company compared to others. I noticed they managed a few in the Destin area I was looking at and also a reasonable mgmt rate. Lake Granbury looks interesting not far from here.
Hey @Nick Troutman,
First off let me say that it's cool to see a fellow boater on here investing in real estate. I've from Louisiana but have spent virtually every summer of my life in Western NC boating- was a whitewater canoe instructor for many years at a camp in that area.
To that end, the Brevard area seems to be a really hot market right now for STR's. I would trust Brandon's list on areas around the country that are most profitable because of the thorough research he has done, but if you were looking for something that is closer to you and within driving distance, you should check out Brevard. Plus you can get a quick lap in on the North Fork while on a "work" trip...
- Austin Ashcraft
- Real Estate Agent
- Denver CO | Colorado Springs, CO
- 2,557
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I was just talking to a favorite agent of mine in Summit County here. (That's the Breckenridge area.) She does a ton of work with STR investors and said she's seeing a huge demand for Fairplay and Alma, like @William Beck mentioned. Plus, who doesn't want a Colorado mountain home.
It's not a traditional vacation rental hot spot, but Denver area has a few cities that have voted in the last six months to allow Airbnb investment properties. It's a distinctly more urban thing. You definitely can cash flow, though not like some of the other vacation rental hotspots. But I know some people see these purchases not purely as a numbers play; it's also a portfolio of vacation homes for them to visit. Having a Denver-area home can be attractive, especially with the potential appreciation over the next few years.
Whatever you decide, I wish you luck!
Hi Nick,
Not sure if you have logged into AirDNA, but their reporting is pretty good and they have some great content. You might want to look for markets where rental arbitrage is a thing. Personally, because fly to markets are impacted the most this might be a good area to look into Like Oahu, Maui, Kaui. The problem is that you might need to ride out most of 2021 before things go back to normal which would mean paying utilities and HOA fees.
@Austin Ashcraft Thanks. I hadn't thought of Brevard.
I own a Condo in Key West that seems to get higher rents than most other parts of FL. Mind you, the real estate prices are higher. But it's a fantastic tourism area and my favorite place to visit. I get guests ALL year round. My condo has a transient license which means I can rent it by the week
@Christina HennessyIs it difficult to obtain a transient license?
In Key West yes it is. Many of the rentals are monthly only. So, you have to make sure you ask what type of license the home has.
@William Beck I see that you mentioned The Poconos. Somewhere else I saw the occupancy rates are (or at least were) low. You would recommend buying there for STR's?
@Matt Garry Typically Poconos properties book out weekends throughout the course of the year, with summer being peak season. That has a net impact on total days getting booked for your occupancy %. The big shift there was prices shot up after covid. You could have gotten a 4-5BR house in the Poconos for sub $200,000 and it was a good enough vacation rental market that it was very investment grade. I Know prices have shot up so it's still a good market but there may be a situation where the vacation rental investment becomes break-even or offsetting costs because of the increased acquisition price. I'd still want to own there. Lake Harmony, Arrowhead Lake, Albrightsville.
@William Beck, good summary. I have a small portfolio of STR properties in the Poconos and I can see already the difference in the market dynamics of supply vs. demand. On the supply side, there is a surge of approx. 25% of new listings since Q1 2021 driven by the new investors coming to the area and higher real estate buyer demand (due to liquidity and low rates). On the demand side, summer is busy but not nearly as busy as last summer as many people already took the 2nd dose and would rather take a plane to so somewhere else. Still a good market, but very challenging to operate if you dont have a very strong local team.
@William Beck : Thanks for listing out best markets. As the market is so fluid and pacing rapidly month after month, do you see any new trends wrt areas that you listed. Any suggestions on what are the best markets with Skiing traffic as primary revenue generator ? I am looking for a ski market with friendly STR regulations and atleast 30-40% occupancy in non skii seasons. Too much to ask..:-)?
@Chaits J. If I was personally interested to purchase in a ski market I would be looking in periphery markets to the main ski markets. I don't think it's going to even be close to cash flowing if you are buying a ski-in/ski-out property since those are generally overpriced relative to what they will bring in for vacation rental income. The ask for there to be 30-40% occupancy in non-ski seasons is tough because ski markets also tend to have a saturation effect where when it's ski season, demand spikes and everyone gets booked but when the snow is not there, the traffic doesn't make sense. For example in Summit County in Colorado the epicenter is Breckenridge. Breckenridge will command the highest prices, but during shoulder seasons/mud season for April-May & Sept-Nov. there are definitely people that go there, just not in the same swells that you see in peak season. The majority of condo properties in those markets sit vacant during those times. If I had to invest in a ski area property in Summit County, I'd be looking at Fairplay/Alma just down the road. I think you'd be able to pick a cabin that has a $/sq ft that's more favorable than in Breckenridge or Dillon/Silverthorne and will have more sleeping capacity and will allow you to charge a higher rate. The pricing and availability in that area has gone nuts since last summer so I have no idea if it's still viable but using the data I had for trailing 5 year performance numbers, that's the play. Another option would be Granby/Grand Lake area. These areas are still close enough drive to Denver metro where you can still get strong traffic and let the guests pay your vacation rental investment bills! Hope this helps.
*Final quick edit, short answer TL;DR: Don't go to ski markets if you are looking for a cash flow positive property.
@William Beck : Thanks so much for a detailed response. Great analysis!!
I have a awesome Airbb investment for someone in Branson Mo with a very very rare private dock on Taneycomo someone would make a killing were wanting a place in the country how would I go about advertising it to investors since we have it listed with a realtor already thanks
@William Beck Thanks for sharing your analysis! I see that your initial post is ~6 months old, are Pigeon Forge/Gatlinburg, TN; Poconos, PA; and Branson, MO still the top 3 investor markets you would recommend?