Best US Island for STR Investment

[Ryan McNamara]

What is the best island in the US for short term rental investment in regards to friendly regulations and cash-on-cash returns? Oahu, Hilton Head, St Thomas, Martha’s Vineyard, another island? 

[Scott McCurley]

@Ryan McNamara

Martha’s Vineyard has a very high entry point and a 8-10 week rental season. Very difficult to make any cash flow for at least 5 years. Rental rate increase significantly each year and appreciation is high. Also, very specific areas are preferred over other areas. It is very important to have local knowledge.

For example, we purchased a 4 bedroom home for 1 mil in 2017 in a very desirable area of the island. At the time, our high rent weeks were $4000/wk. since then the house has appreciated 50% (with some improvements worth about $150k) and rents this year will max out at $7500/wk for high rent weeks.

It is a beautiful island and one of my favorite places on the world. In time, all will work out but the short rental season is a challenge. Expect to lose money for the first few years from a cash flow perspective.

Hope this helps.

Scott