Looking to increase cashflow with Short Term Rentals

[David Klaff]

I have been wanting to get into short term rentals for along time. I always felt I needed to be close to my future STR and living in Denver with real estate prices so high it has felt/feels out of reach. In the last year I have bought 5 out of state long term rentals and am ready to try an out of state STR.

I have read short term rental long term wealth and watched a ton of content on you tube and it seems that STR's will help me reach my cash flow goals faster then the LTR model I am currently using. I am having problems figuring out where to go. I feel comfortable with the Twentynine palms area and Joshua Tree area as they seem to have good established regulations in place and being close to my home town of Las Vegas I am used to desert styles of properties and have contacts at lease kind of close. I am also looking at Galveston area, smokey mountains area, and parts of FL.

I am hesitant on the Joshua Tree even though it is the area I am most comfortable because it seems there are a lot of properties out there and CA does have high taxes and cost of business. If anyone has advise on their occupancy rates or information on the ups and downs of that area that would be helpful. My price range is under 325K and I feel the area's I have chosen offer over 33% cash on cash options. Anyway I am new to the STR and feel I'm in a state of analysis paralysis trying to figure out where to go. Any advice on this topic would be helpful.

Thank you for your time!

[Mike Shemp]

@David Klaff
There are lots of great STR markets. I don't have any recommendations for specific markets, but the process for getting established in a remote market looks like this for us...it's a slow road, but the one we like because it makes us feel like we did some homework.

1.  Visit the area ....a lot.  We take multiple trips and scout out multiple neighborhoods on each trip.  Walk around neighborhoods, stop and talk to locals, ask what they like, what they don't.  Talk to waiters, waitresses, and find out what's great about the area and what's not so great.  Drive the areas on sunny days and when its raining to see what areas flood or have water problems. 

2. Talk to a local realtor after step #1. Get their perspective on the areas that work as an STR in that market, and areas to stay away from. Check with local government on any pending or ongoing discussions on regulations or existing ones.

3. While your waiting for the right property, start researching your team.  Facebook groups for owners of that market are a great way to do that.  Just search for "Joshual Tree vacation owners" and things like that.  Ask the other owners who they recommend for cleaning, handyman, appliance, pest, plumber, electrician,  HVAC if you are not using a PM, or ask for PM recommendations if you are going with a PM.

4. When you find a house you like, review the deed to make sure there are no deed restrictions on renting it as a STR. We came across this once because the guy selling the property lived in the property next door, and he didn't want any guests coming and going, so he put that in the deed. We passed on that one.

Hope that gets you started!

Mike