Sedona Short term rental data

[Chad McMahan]

I've had a lot of BP-ers reach out to me for Sedona short term rental data, so I thought it might be helpful to post info here.

Client average STR performance info:

16% cash on cash with less than $20k improvements after COE

25% cash on cash with $50k-$100k improvements after COE

30.5% cash on cash with $150k-$250k improvements after COE

"Sweet spot" for best STR ROI = $1,000,000 - $3,000,000

There are *potential* AZ STR restriction laws en route. If they pass, Sedona city limit STR's will be tapped out, and Village of Oak Creek and some other areas will become prime STR areas and should be unrestricted by these new laws- in terms of a STR percentage cap.

For investors that are not comfortable with the above "sweet spot", there are nearby areas between $450k-$700k that are giving similar returns.

I hope this helps. 

[Doug H.]

What are the potential AZ STR restrictions you mention?

[Chad McMahan]

Quote from @Doug H.:

What are the potential AZ STR restrictions you mention?

Doug,

Right now- none. No current restrictions, unless the HOA and/or CC&R's restrict it.

However, there are several AZ house bills that a lobbyist has been pushing hard. One of the bills, HB 2711, will restrict the percentage of STR's allowed, in AZ towns with population under 17,000.

There are a lot of questions and not many answers at this time. Because of the unknown, I'm having my clients purchase in "safe zones" that are outside of these potentially restricted areas and yet still have high returns and the same crazy appreciation.

Unfortunately, the answers we all *want*, will not be known and available until two things happen:

1) The bills pass

2) The state and the impacted areas settle into acceptable protocols.

Pre-existing STR's will likely be fine. Even the local PM's are advising clients and potential clients that pre-existing STR's will be grandfathered in. I'm not as certain. But- I feel it's likely.