Glut of STRs in Every Major Market. The Elephant in the Room.

[James R.]

There seems to be a glut of STRs in every major market, yet there are RE agents out there telling people that there is demand.

There may be demand, but if the owner cannot book their place to cover the costs, how can RE agents be out there telling people that it's a good investment?  In the Orlando, FL area, people are desperate for bookings and are trying to get guests in their house that sleeps 10 for $99 a night?

The mortgage alone has to be at least $4 grand a month.  Booked every night for a month, doesn't even cover the mortgage, let alone the cleaning fees and maintenance of the pool, etc. and if you have a property manager, you have to be cashflow negative.  That to me is not a good investment, yet everyone is still wanting to get into short term renting?  

[John Underwood]

There are a lot of owners that have great purchase prices and 3 to 4% Interest rates that bought 5, 10 or more years ago.

If you want to jump into the STR market game now in competitive markets you better run your numbers conservatively and you need an appealing location and property to be competitive.

I see story after story of people being upside down and having to sell at a loss because they chased the shiny object without enough due diligence.