New to STR- How is the market in 2024

[Kanika Jain]

We are from California and looking for investing in STR for tax purposes and good cash flow. California is an expensive market. We are looking for homes priced around 500k (including renovations) and revenue 50-60k per year. I am willing to invest in renovating the place to reach profitability.

What I am looking for:

- Decent margin of safety as opposed to highest yield possible.

- Low operational cost

- Good seasonality markets

- Should be easier to operationalize service via property managers remotely.

What are some of the strategies that have worked? For e.g.- Jumping into up and coming market vs renovating in a saturated market?

We are currently looking into Kissimmee and Fort Myers to start with. Any recommendations of good markets outside of Florida would be great to learn.

Thanks.

[Ryan Moyer]

Quote from @Annie Seurer:

I personally like Kissimmee because it can be very lucrative but it can be a difficult market - you'd have to knock the design and amenities out of the park, because if you don't, there are thousands of rentals that do and you'll fall to the wayside. In my experience, we found 5-8 bedrooms to perform the best. 

This is accurate.  Disney area is not really a cash-flow market right now unless you invest a good amount of money into theming AND you knock it out of the park with that spend.

They've been building these large themed houses by the literal thousands the last few years and there are a lot of them.  Just go to Airbnb and search for a place to stay and you will see how decked out all the homes are and how many are available and hence, how startlingly low some of the rates are for such nice houses.

It can be done but if cash flow is a top priority it would not be my top choice right now. Though if personal use or long term safety are a concern it can make a lot of sense as Disney will always be a market (whereas places like Broken Bow I could see fading from popularity) and unlike many markets there is almost no regulation risk since these properties are built in tourist zones specifically for STR.

I own there and manage others so have real world revenue data if you want specifics.