Should I turn my normal rental into a STR?

Question

Hey folks,I have a 4 bed 2 bath house in Longmont CO that is currently a long term rental. Tenants are moving out in a month. Should I turn it into a STR? My mortgage payment is ~1,500/mo and I can get about $2,600/mo for a long term rental. The house is in decent shape, with updated bathrooms and kitchen and has a nice backyard with a patio and a garage, but the house is in kind of a lower class working neighborhood, not in the more desirable downtown area. I have never done a STR and I would need to completely furnish the house. My main question is how much money I can expect to make doing a STR. I am pretty dang busy but I would likely do all management and maybe even maintenance myself. How can I figure out how much money I will bring in? If I can make at least $2K extra per month it may be worth it. Is that realistic? How much could I expect to pay to furnish a 4br house? Any info from Longmont locals is greatly appreciated.

Michael Baum · Answer

Hey @Clayton Sneider, have you taken the time to check the rules around STRs in Longmont? Here is the site - https://www.longmontcolorado.g...Also, take some time and check AirBNB and VRBO to see what others are charging for their STRs, what is the occupancy and their amenities? That will give you a good idea on how well it will do.I will say that a $900 a month net is pretty good for something that takes no real effort.

Zach Edelman · Answer

Clayton - have you checked out the Air DNA report/market analysis for Longmont, CO. That'd probably be a good place to start.

Henry T. · Answer

I have a couple SFR LTR's turned STR's to experiement. Been doing it under a year and its going pretty well. It's very different. More work, a little less money than LTR. But let me clarify. I could make more, but purposely limit my bookings. Gawd, I've furnished mostly for nothing from craigslist. People are appreciative and I've met some nice folks. I still have LTR's going, they take care of themselves, while STR is a bit of work. There's nothing special/unique about my places, good residential neighborhoods, and locations. Try it. Get a van and make some craigslist raids. If you're quick you'll find good stuff.

Zach Edelman · Answer

Another vote for checking out local regulations before getting into it. Don't get caught with your hands tied!

Terri-Leigh H. · Answer

@Clayton Sneider I do not have properties in Longmont but I design and install STRs in the Denver surrounds and right now for a property of that size in that market I believe you are looking at around $28k from spoons to sofas, a bit more if you want to add amenities like a game room etc. for good design and decent quality!I am always surprised at how successful some markets can be even if they aren't the big "shiny" ones!

KiKi Wood · Answer

Hi @Clayton Sneider! STRs are super exciting. Just make sure your numbers are solid, and get systems in place to make managing it so much easier. When looking at how the numbers are, look at competition in the area, how much they are charging per night, what their fees area, and how often they are booked. The free way to do that is to look on a map in that area on Airbnb, and act like you're going to book on of the competition's homes, to see how much they charge and such. Obviously don't actually book, but it should give you a good idea! Make sure you know the restrictions in the area, and have a solid cleaning team (if you choose to do that). Best of luck! :)

Sarah Kensinger · Answer

It almost sounds like the neighborhood wouldn't be desirable for a STR. Run your address through Airdna's free rentalizer or Rabbu to get an idea of income you could possibly bring in.

Brooklyn McCarty · Answer

Check out local regulations and then also enemymethod.com

Dan Guenther · Answer

@Clayton Sneider - The STR market in Longmont is very lucrative! There are a few specific areas that bring in higher returns and some rules to consider when looking into it. For example, there cannot be more than one STR per block on the same side of the street. You can find this info on the city website or give the city a call to see if you're property qualifies. If you are good to go then the permitting process is relatively quick and easy. Reach out if you want some help estimating potential income. As you mentioned, location could be an issue but it still might make sense to give STR a try!

Andrew Steffens · Answer

You need to consider the following:1 - What can you bring in? AirDNA can help as well as checking out your competition on Airbnb and VRBO. Apples to Oranges but we have some well performing STR's here in FL in blue collar neighborhoods.2 - Are you willing to do the work? This is more akin to running a hotel than managing a property. You will have to answer all guests inquiries, current guests questions/complaints, manage cleaner(s), and property maintenance as well as keeping good books etc.3 - Make sure when you underwrite the property you are considering seasonality in your local market, utilities, maintenance, consumables, etc.4 - 'The cost of furnishing. I use $20/ft as a rule of thumb for everything (including linen, TV's, even forks and knives). Your market may be different but the STR market as a whole is experienced some saturation and the cream rises to the top. The best outfitted properties are mostly still doing well and the shabby ones are really struggling, so there are not a lot of corners you can cut here IMO.5 - Local laws and regulations. You may also need to have some foresight here as these can change, maybe check with local hosts and see if they are concerned with any upcoming city votes etc.The answer for me is very often yes to STR over LTR but that is different for everybody. Either way, best of luck!