Is now a good time to invest in STR

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Is now a good time to invest in STR

Member since 2023 · 15 posts · 4 votes

I have been wanting to invest in STR near me at a nearby ski resort or in a town where they use a lot of traveling medical personnel. Is now a good time to invest in either of these areas?

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Neil Cronkrite

Investor · Wheat Ridge, CO · Member since 2013 · 75 posts · 41 votes

I see some really terrible STR underwriting, so just be careful on occupancy rates, nightly rates, and accounting for all potential expenses. Remember, unlike other real estate asset classes, the landlord is on the hook for so many more expenses that can eat away any cash flow.

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Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
3y
It's "always" a good time to invest. I would say you need to do some market research. See what the local laws are and what is permitted/allowed. Look at what the properties are selling for. The average nightly rental rates. Look at the yearly occupancy rates for various properties. Connect with local people who are in that space, most start with an agent. Prices could be pretty high and maybe not worth it. Without details it's hard to say initially on your question. STR is a great investment but it has become a lot more saturated.
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Mohammed Rahman
Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes
3y
Hey @Joani Pederson - I recommend doing some local research on your own to get a better understanding if it's a good time to invest. Your goals & criteria will also matter most when determining if it's the right time for you. There is no "good" or "bad" time to start investing, just the right time for the right person.
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Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
3y
I think it depends on your specific market/submarket, the asset you eventually invest in, as well as your expectations. Find an asset, underwrite it to a high scrutiny and talk to local professionals to see how the climate has been for tourism and STR's.
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Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
3y
Quote from @Joani Pederson:

I have been wanting to invest in STR near me at a nearby ski resort or in a town where they use a lot of traveling medical personnel. Is now a good time to invest in either of these areas?
Yes . . . If you like people, are organized, can approach it from a "business" point of view, not just the latest "cool" thing and if you can stick with it.

If you find an area that has good hotel usage you can use their numbers to figure out occupancy rates. You have to decide if you will be renting a room or a a whole house. They are very different.

You usually have to add furniture, linens, cookware, artwork and such. You have to either clean it yourself or have someone flexible enough to clean after each guest.

You have to learn how to promote your property.You need to know when the high season is and when the low season is. You need enough reserves to get through the low season.

If in an HOA, you need to know if it's allowed and if the city has any ordinances or is considering any new ordinances that restirct your ability to operate.

You have to decide what amount of yearly profit makes sense for you to make the effort and spend the money. And you have to consider 'pandemic emergencies" real or imagined that might affect your occupancy rate.

Yes, it's a good time . . . for the right locations, the right properties, the right management

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
Its not as good as it was several years ago before prices ballooned and interest rates went up.
Don't let that stop you though. You just have to search a little harder to find something that will give you a good return on your money.
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Neil Cronkrite
Investor · Wheat Ridge, CO · Member since 2013 · 75 posts · 41 votes
3y
I see some really terrible STR underwriting, so just be careful on occupancy rates, nightly rates, and accounting for all potential expenses. Remember, unlike other real estate asset classes, the landlord is on the hook for so many more expenses that can eat away any cash flow.
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
This is not my favorite time to get into STR. The craving to leave the house (from Covid) has died down and only the best product gets booked consistently.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
It is always a good time, based entirely on your location. Having said that, it is a down-time for STRs generally I believe. Some hot markets will always be hot though....
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
I think everyone has said it best @Joani Pederson. It all comes down to numbers. What works and what doesn't.
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Josh GreenBusiness Member
Realtor · Tampa/St Pete/Clearwater/Bradenton · Member since 2020 · 396 posts · 353 votes
3y
Quote from @Joani Pederson:

I have been wanting to invest in STR near me at a nearby ski resort or in a town where they use a lot of traveling medical personnel. Is now a good time to invest in either of these areas?

I would be focusing on the deal, not the timing:
"Does a STR at X Location at X price with X financing work?"
The timing is truly irrelevant. You'll always be able to look in the past and say, "that was a better time to buy than now". Just focus on buying deals that make sense from an ROI perspective and with long-term lenses.
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Joani Pederson
OP
Member since 2023 · 15 posts · 4 votes
3y
Thank you everyone, I will contact someone who deals with the rentals of condos at the ski resort I’m interested in as well as do more research.
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Michael DiossaPro Member
Investor · RI · Member since 2023 · 191 posts · 163 votes
3y
It is worth examining the trends and projections in these industries and considering how they may impact the demand for real estate in the area.
Consider factors such as the potential for rental income, appreciation over time, and the overall economic conditions in the area.

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Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y
Investing in real estate can be a great way to generate income and create long-term wealth. However, it's important to do your research before investing. Consider the local laws related to real estate investments and check on the average selling prices of similar properties in the area. You should also look into the nightly rental rates, occupancy rates and other factors that will determine how profitable an investment could potentially be. It is also helpful to connect with people already experienced in this space, such as real estate agents or brokers. While STRs have grown more popular over time, they may not always be worth the investment due to their higher prices. Do your research thoroughly before making any decisions!
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Clay Asplundh
Realtor · West Palm Beach, FL · Member since 2020 · 55 posts · 27 votes
3y
It will take effort to find a good deal, but there are definitely opportunities out there. Anyone who tells you they know what prices will do is guessing. Do not make an investment where you expect or rely on appreciation. Instead, focus on finding an STR that will cash flow comfortably, and has unique factors that will make it a popular choice for guests. Building a professional listing and decorating well is important too!
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Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Joani Pederson:

I have been wanting to invest in STR near me at a nearby ski resort or in a town where they use a lot of traveling medical personnel. Is now a good time to invest in either of these areas?

for STR in vacation zone, dont think thrice, twice is okay :-) worst case scenario you would hit the double black more oftn LOL
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Tommy Parker
Property Manager · Charlotte, NC · Member since 2022 · 269 posts · 135 votes
3y
Although it's technically not the best, I still wouldn't let that stop you from finding a STR!
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Kristi Miller
Member since 2023 · 57 posts · 30 votes
3y
I have 2 STRs in a ski town and they do great. It's not a seasonal business, as you'd think. We get our bookings in the winter, obviously due to ski season, but ski areas are typically great summer and fall producers as well. Cool mountain air, hiking, rafting, leaf peeping...

Definitely run the numbers and look at how many properties are in your area. Also look at local STR regulations! We're seeing insane restrictions in small mountain towns. They're cranking out restrictions due to a knee-jerk overreaction to affordable housing decline. See if there are restrictions on the # of nights you can rent, etc. Also, you mentioned a condo - just look at Airdna or Pricelabs to see if there's an overpopulation of small condos in the area. You want to offer something different from what's there.

for all of your welcome guides and media once you're up and running. Good luck!
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Joani Pederson
OP
Member since 2023 · 15 posts · 4 votes
3y
Thank you I’ll need to look into all that! The ski resort I’m looking into also has a mountain bike race, , Spartans obstacle course race as well as several hiking trails so it’s also good seasonal. Fall colors bring many to the area as well.
1 Reply
Melissa Nash
Rental Property Investor · Orange County, CA · Member since 2016 · 740 posts · 529 votes
3y
The math is the math. There is ALWAYS good deals out there and cashflow to be had. Just learn how to run the correct numbers and do the hard work setting up the property correctly for the right guest. I am still cashflowing my STR's well over 30% cash on cash returns, it is down a little bit from the last 2 years---- but can't complain!
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Zach Edelman
Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
3y
The experience that you will gain from getting a (and your first) deal cannot be understated. That in itself is enough to make the investment worth it, regardless of profitability (within reason obviously).
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Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
3y
@Joani Pederson best time ever ! IMO
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Joani Pederson
OP
Member since 2023 · 15 posts · 4 votes
3y
Vermont is now looking at regulating STR IMO as a way to make money by having you register for a license, etc. Just in the beginning stages of discussion but it's due to the lack of housing in the area. So switching my focus to possibly Waikiki. Anyone have STR there? Any advice on buying there? Looking at fee simple not leasehold.
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KiKi ChaseBusiness Member
Real Estate Agent · Indianapolis, IN · Member since 2022 · 184 posts · 75 votes
3y
In my opinion, yes! It always comes down to the market that you're looking to invest in, but if you have the systems/teams in place and you set your STR apart, you will do great!
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