Myrtle Beach | Orlando |Smoky mountain - 3 popular areas - Not one cash flows in 2023

[Andy B.]

I looked at 3 popular destinations (Myrtle Beach | Orlando |Pigeon Forge) to analyze STR properties with the following setup. Not one has positive cashflow with a typical 10% second home loan / 30% vacancy & 6% interest rate. I assume expenses to be close to 50% of rent. What am I doing wrong? Most properties are just too expensive to make the numbers work. I am sure there are deals but for the most part STR doesn't appear to work right now. Not sure if my analysis is correct and probably I am missing something. Looking for your thoughts. How are you making this work? What is different about your basic setup? We cant change the interest rate and asking price. What variables are you adjusting to make these financially viable?

Budget: $750k , Downpayment: 10%, Interest rate 6%, Loan 30 year, 30% Vacancy (Basic assumptions / setup)

1. Consider this property in Pigeon Forge: 754 Kings Hills Blvd - $530k (asking)

Purchase price: $530k ; Rent $380 per day / $4560 (monthly); Operating Expenses 45% of income | NOI - $1791 | Loan payments - $2385 | Cash flow -$594 | Cap rate 4.1% ; Cash on cash return -10.3%

2. 9560 Shore Dr Apt 1911, Myrtle Beach | Asking $679k |2BR | Rent $6996 (Gross) / $233 per day | Cap rate - 3.5% | Cash flow -$1694 | CoC - -23%

3. 4734 Sleepy Hollow Dr, Kissimmee (Popular Storey lake community) - Price - $742,500k | Rent $280 / day | Vacancy 30% | Cash flow -$1288 | Cap rate 4.4% | COC - 16%