STR Condo at popular beach locations

[Alan Bostick]

What are the pros and cons to STR condos? Should investors generally shy away from condos doing STR method? I personally feel they would be less desirable but I don't know if that is my personal bias getting in the way.

Help?

[John Underwood]

A house will be much more profitable than a condo. 

[Luke Carl]

If it's personally less desirable to you then don't do it. You have to be renting a product you believe in. STR is 90% management. BP put out a YouTube on this subject last week.

[Bruce Woodruff]

@John Underwood and @Luke Carl are both correct. Condos will not be as desirable AND then you are subject to the whims of the HOA. And yes the STR business is 90% management...

[Alan Bostick]

Thanks for the input everybody! Much obliged!

[Nancy Bachety]

Define most desirable.

One of our most desirable highest performing STR is a condo in a location where it is common, permissible and the HOA is STR friendly. We're on the board too. Many board members rent on STR platforms.

Our HOA fee covers things like Internet, cable, some insurance, water and landscaping, alleviating us from utility bills and weeds. It is the easiest STR we own and highly profitable, therefore, most desirable to us. And the net returns are stellar, year round. 

[Jeremy H.]

I go back and forth on this...I can see it both ways though, this depends greatly on the property imo. Condo you have HOA fees, special assessments every so often (this is your Cap Ex budget) whereas on a house you have regular cap ex on your exact property. Condos can have nice amenities as well, but some lower density houses/townhomes have nice smaller amenities with a much lower HOA.

[Carson McGee]

I own three STR condos in Maui. They can be very profitable and are often in a more desirable area, our complexes are oceanfront. The biggest downside is HOA fees, they can get pretty steep. They do include Wifi/Cable, Amenities (Pool, Suana etc) Grounds Upkeep, and one of our complexes includes electricity. It all comes down to location, yield, and personal preference.

[Josh Green]

Personally, I have a bias. I don't see condo prices really being much less than SFRs in my area (Tampa/St Pete). I personally don't like the idea of HOAs and how in any moment that can not only go up in price dramatically, but you could suddenly be told you can no longer rent out your unit. The exit strategy is weak comparatively and I'd "sacrifice" the modest cash flow potential of not being beach-front for a SFR a little inland that is just a better long-term investment as far as having multiple exit strategies.