How to chose location and buy correctly in STR market

[Alec Khlebopros]

With everyone and their mother buying up STRs, what is the proper way to assess the asset without overpaying for it. Numbers from 2021 and 2022 net income will be more difficult to get going forward with increased supplies of STRs coming on board in popular destinations. Would you chose mountains vs beach and why. From the experienced investors in STR space, if you would do it all over again what would your thinking process be in choosing location, HOA vs no HOA, mountain views vs no views, waterfront or looking locally to where no one is really looking yet. Thank you

[Andy Whitcomb]

You're asking the right questions. I would add another question that is important to ask yourself, and that is "who is my guest and why are they going to be staying at my property?" Answering this question is essential for helping you narrow down the property type, location etc. You could also do it the other way, find the property and then ask the question with regards to the property. However in your case I would pick who you want to stay with you and build your business model around that guest avatar and the experience they'd want to have at your STR.

With that said, here are my response to the questions you brought up, based on my personal experience:

HOA - Definitely no HOA if you can help it. You want to reduce any chance of others telling you what you can and can't do on your property.

Choosing a Location - Focus on drive-to markets, especially now, because they will typically do better in a downturn than fly-to markets

Mountain View or not, waterfront or not - Focus on unique properties, both architecturally and the natural setting; trees, nature, and preferably access to water (lake, river, stream, pond, ocean). Views are nice but guests would prefer access to water, it offers a better experience.

These are just a few, I could go on for hours about this, haha