Buying high end STR and after a few years what to do?

[John Mason]

Good Morning

Let us say I buy a high end STR around a million dollars and after a few years STR is banned in that location, what would be the strategy to rent it out?

[Bryant Xavier]

Great question! If STRs are banned in your area after you’ve invested in a high-end property, you still have several options to generate rental income:

1. Mid-Term Rentals (MTRs): Target traveling professionals, corporate clients, or insurance-displaced families who need furnished housing for 30+ days. Platforms like Furnished Finder and corporate leasing strategies can help.

2. Traditional Long-Term Rental (LTR): If the numbers still work, pivot to a standard 12-month lease. You may need to adjust pricing and amenities to attract long-term tenants.

3. Luxury Corporate Housing: Market the property to executives, film production teams, or medical professionals needing upscale accommodations.

4. Event Space Rental: If zoning allows, repurpose the property for weddings, retreats, or high-end gatherings, especially if it has unique features.

5. Owner-Occupied Rental (House Hack): If feasible, move in and rent out a portion of the home under local rules (e.g., renting rooms or an ADU).

6. Sell or 1031 Exchange: If the property is no longer viable as a rental, you could sell and reinvest in a STR-friendly market through a 1031 exchange to defer capital gains taxes.

The key is to have multiple exit strategies before investing. Research local regulations and keep an eye on trends to minimize risk!