As you know, Waco is a highly sought tourist destination in Texas due to the success of TV personalities Chip & Joanna Gaines. Their show 'Fixer Upper' helped put Waco on the map and they haven't looked back since. In my opinion, Chip & Jo have created a standard for renovations here. Because of their success and influence on real estate here, Waco has a collection of some of the best quality Air BnB's in the country. People fly in from all over the country to come to the Silos downtown and enjoy the unique experience Magnolia has to offer. I don't need to tell you that these Air BnB's that were formally renovated homes on their show don't come cheap. If you plan on buying an Air BnB from the Show or finding one close to downtown, you need to be prepared to spend between $350,000-700,000 depending on the square footage of the home. If the home is properly priced, you will most likely be competing against cash.

I have had countless investors contact me with a budget of $300,000 looking for an Air BnB in Waco. Here's some hard news. You missed the bus. I hate it just as much as the buyers do because it's frustrating trying to find a 'deal' in this market. Sellers are still getting darn good prices for their homes and I can't blame them for still being aggressive on their pricing. You will quickly come to the conclusion that every STR for sale on the MLS is priced way over the amount that you would need to buy it at in order to cash flow. Appreciation is out of the question during this recession. So please don't be the person buying at the top and catching the bag. You still need to run the STR successfully with good returns if you ever plan on selling again.

Unless, you are walking around with $500,000 cash in your pockets, you need to be patient in the Waco market. I have experienced the same struggle in finding LTRs for clients. The best market for any investment property right now is still OFF-MARKET. Please read this before filling out inquiries in the Waco market looking for your first investment.

Here are some examples of STRs currently for sale in Waco for your reference. This should help you figure out whether the Waco STR market is too tight for you or not and save you a lot of time and frustration.

One final thought as you analyze our market. Downtown Waco has multiple hotels coming in to meet the increase in Demand. Two notable hotels are Chip & Jo's Magnolia Hotel on Washington Ave. and AC Marriott on Mary street just a few steps from Magnolia. You will be competing directly with these two highly anticipated hotels.