Pros & Cons of Replicating a Successful STR?

[Saad Munaf]

Hi guys, new to BP and real estate investing. I'm looking to purchase my first property and set it up as an STR. I'm using the ENEMY method, AirDNA, Mashvisor, Revedy, and Pricelabs for comps and analysis.

I was able to select the market and community that is marketed as vacation rental homes and most of the houses are set up as STR. As a first time investor, I'm thinking to replicate those existing houses (with little bit of my touch) but wanted to ask what would be the pros and cons in terms of competing with existing STR's in the community?

Hope that makes sense.

Thank you.

[Nick Velez]

Personally, the last thing I would want to do is purchase a STR in a community where every neighbor is my competition and floor plans are similar if not the same. When the area eventually becomes saturated or supply exceeds demand, all you can do is race to the bottom to compete on price. Sure, you can make your unit extra special through design or amenities but when most of your competition is similar in size/shape, those extra items can only warrant so much of an increase in ADR.

The short term rental market is alive and well, I am performing better this year than last with no changes in my management. When scouting an area, you 100% need REAL data to inform your decisions. Your realtor should have STR's or manage them so they can provide you with relevant market trends and data to help you succeed.