Any recommendations on where to buy next?

Question

I'm looking to pick up another STR. Ideally I like to buy STRs that I also would want to vacation at. I was considering a beach location next. I had my eyes on Destin from a while back, but then prices went nuts and I stopped looking there. Is Destin still a good area to buy is it too expensive to make any money? If so, are there any areas or specific condo property names that people would recommend? Or if not, how much would the market have to come down to make it attractive again?

Chase Hoover · Answer

I'll chime in on the "buy where you want to vacation thing" - instead of buying in an area where you want to vacation (typically high competition, high prices, low returns) - buy a solid investment in an area that will give you great cash flow, then use that cash flow to take baller vacations to a places you REALLY want to vacation.

Speaking from experience - vacationing at your own STR isn't much of a vacation.  You'll spend 5% relaxing, 95% nitpicking wear and tear caused by guests and going back and forth to Lowes.  Treat your STR business as a business, and spend your smart-earned money vacationing where you can truly vacation.

Monica Mejia · Answer

Hi there! Love that you're looking to expand your short term rental portfolio!

Have you considered the Colorado market? I currently own/ operate 2 STR's in CO and if you enjoy beautiful hikes, mountain homes, skiing, and amazing nature views overall, it may be the place for you!

The investment for a STR in CO really depends on the geographical area you're more interested in. Median home prices here are around $650k and you'd be looking at cash on cash return of about 20% - 35%. Would love to know your thoughts (:

Myrtle Mike Thompson · Answer

Myrtle Beach or North Myrtle Beach.  If you're not familiar with the area, hop on a $50 Spirit flight and come check it out!

Dave Stokley · Answer

I’m sure @Luke Carl can give you the scoop on the Destin market.

Here’s an alternative perspective. I was in the same position as you, thinking about buying another STR in a location where I visit often (Phoenix, in my case). Based on my planned use during high season I’d be hoping to break even the rest of the year. At the end of the day I decided just to buy another one where I already have operations in place and use the earnings from that to travel wherever I wanted. This simplifies my business and provides flexibility rather than being locked into one location.

Matt "Roar" Gardner · Answer

Ray - As an investor and agent in the Destin market, I can confirm that you can still find and purchase cash flowing STRs here.  They aren't everywhere, but they do exist, lol.  Like Ricardo had mentioned as well, If you look to the surrounding areas, you may have some luck.  I recently purchased a 5 bedroom in PCB for $770K that brought in $130K last year, and I'd be happy if we could replicate that!

Best of luck to you!

Leslie Anne Morris · Answer

Did anybody mention Smoky Mountains yet?  If not, here is your sign!

Ricardo Hidalgo · Answer

Hi Ray, send me a personal message to send options through email or website link. We connect through a phone call as well!

Jake Greener · Answer

Hello Ray! To analyze specific markets in and around the U.S. I have been using Rabbu and some other analysis tools. They have a free option called data.rabbu.com, but I also use the paid service that they provide additional market data. Rabbu recently launched a free trial for 7 days if you wanted to try using that to check out areas you are interested in.

Ray S. · Answer

Yup, I have no problem waiting I just want to identify and educate myself on the area I'm interested in so if/when an opportunity arises I can move quickly. In other areas I was looking at in the past in which I was early, it took me so long to learn about the area that by the time I actually was ready to pull the trigger prices had moved up 30-40% in just a few months.

Ray S. · Answer

Which area specifically? I looked a while back but from the numbers I saw there was no money to be made. Seemed like an area you buy in because you want to use it and can rent it on the side to try and pay off part of your mortgage.

Any recommendations on where to buy next?

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