Brrrr STR in non vacation markets

[Abdul Lateef]

Anyone has done the BRRRR method with operating the homes as short term rentals in non vacation markets?

[Levi Bennett]

Most of the times I find that some of the most successful STR's for my clients are in areas that are not known as vacation areas. There are several layers to this, but, as someone who analyzes deals for clients all day every day and pays for very expensive software to aggregate short term rental occupancy and booking rates, I can tell you that the best performing properties are almost always outside of traditional vacation areas. This doesn't mean that any area will work, but with a little due diligence, you can find which areas are dramatically underserved on the short term rental market and go from there.

One unlikely example is, in my city a client of mine had 9 STRs, and they all did fairly well, but during the pandemic, traveling nurses began looking for 3-month furnished corporate rentals and she converted all of them to corporate rentals and took them off of AirBnb and VRBO and is making almost twice as much as she was, and has very low vacancy. 

Another example, in the western NC mountains near where I live, most people gravitate towards investing in over-saturated well known vacation areas with lots of amenities, however, there are other stunning areas in the mountains with very low prices (comparatively) that have very high occupancy because hardly anybody has an STR in available in the area. There are several "up-and-coming" towns in Western NC that perform just as good or better, at a lower acquisition and higher cap rate. It's just knowing where to look. 

Last example. In one small town in NC, there is a casino being constructed in an area with almost no STRs, it's still 2 years from opening, but what people don't realize is that because of the lack of hotels, and the size of the projects, contractors have no where to stay, two of my clients have bought very cheap housing in the area, modestly furnished it, and have better ROI than almost any other investment they've ever had.

It's knowing where to look and having someone work with you that knows what the hell they're doing that will help you cut through the big data and make sense of under-valued acquisitions, of which, there are plenty.