$60,000 to Reinvest in Existing STR or Scale Up And Buy Another Property?

Question

Hello folks,

I bought my first property in 2023. It was a full renovation via 203k loan. In my first year as an STR host in 2024, I made approximately $2,500 per month. I expect that to be about $2,600 - $2,800 per month in 2025. That leads to my question: I have about $60,000 to invest. I am considering whether to use that money to reinvest in my STR property or scaling up and buying another property that would be a single family long term rental. If reinvested in my existing property, it would be to have both (1) the STR professionally designed by an interior decorator like Rob Built's Funkit Interiors and (2) finish the exterior curb appeal with a paint job, landscaping, new doors and a roof.

Any thoughts on whether to reinvest or buy another property?

Thanks,

Felix

Grant Woodward · Answer

In simple terms, I would do a deep dive analysis of your competition using Airdna, Rabbu, etc., to understand if there are competitors doing better than you based on stronger design/amenities, and if so, how much additional revenue they are earning. If the additional revenue potential justifies the $60k redesign then it may be worth going that route.

Drew Sygit · Answer

Why did you start investing in the first place?

Is it a hobby?

If your goal is to grow, pursue that.

Making this one "perfect" may be a never-ending time & money suck.

Mike H. · Answer

Just curious but how much money do you have in the first STR?  If you're making 2500 a month or more - I'm assuming thats net - then I don't see why you wouldn't find a way to get a second one.  That amount of profit seems like it would suggest your first property is in pretty good condition.  So I just don't see that you'd get the return on investing 60k in your existing property.I'd much rather get a second STR and work your magic on that one too.    Even if its a lesser home that you can't afford to make perfect right now.  Grab it and feed the profits back into it with your design strategies because you obviously know how to run these things.  The goal should absolutely always be about growth as long as you're cash flowing that much money and you can self manage them or have property management built into the numbers and are still cash flowing.Adding more units is like printing money - literally.  Again, as long as you're cash flowing like that or even half that, I would definitely use the 60k to add another one.  Not only are you increasing your cash flow with a second, but you're adding more property value which means your net worth is going up more with appreciation and your principal paydown as well.And even if your second one is only making 1k a month out of the gate.  In ten years when rents have gone up and your mortgage has stayed the same, that profit will become 2 or 3k a month. That is one thing that people don't always see as part of the equation.60k investment to make 1k a month may not seem that great.  But when you add in appreciation and principal paydown it looks pretty good.  But when you look at those returns in 10 years, its an absolute no brainer and nothing else comes close.

Laura Winters · Answer

In the rental income world, what makes money is the number of bedrooms.

I don't see any difference in Airbnb.

Michael Baum · Answer

Hey @Felix Sharpe, looks good. That twin bedroom needs art and at least one dresser in there.

I would also add a little more art here and there to spruce it up. I don't think you need a full designer make over, but someone with a good eye to help add a bit more flare.

Honestly is had decent curb appeal to me but I might add some hanging flower baskets if they can be maintained and watered regularly. That would add a ton for little $$$.

After looking at the Funkit interiors, that is going to be a ton of dough based on what they have shown. I might call local universities and see if there are interior design students who might be interested in doing some work for free. Helps you and them by building out their portfolios.

I can't tell if it is going to need a roof. I assume that the other side is owned by another and you would split the reroof cost?

Mark Driskell · Answer

In our market, professionally designed properties with strong curb appeal consistently outperform. Differentiation is key. I’d recommend evaluating the potential ROI of enhancing your current STR against the stability and returns of a long-term rental to determine which aligns best with your investment strategy.

Andrew Street · Answer

Hey Felix - It really comes down to your goals. If your STR is doing well and those upgrades would let you charge more and boost occupancy, reinvesting could be worth it. But if you're looking to scale and diversify, putting that $60K toward another property might be the better move—especially with a long-term rental giving you steady cash flow. If financing makes sense and you’re up for another property, growing your portfolio could be the way to go. What’s your gut saying?

Andrew Steffens · Answer

I think to give a really solid answer we would need to know a lot more info like market(s) and values, etc.  But a general answer would be to analyze both options.  I try to always let the numbers be my guide as they are objective.  The $60k worth of improvements to the existing property should be somewhat straightforward to analyze and quantify.  I assume for a $60k investment into the property you should be competing with the better comps in your area.  Are those better comps earning $15k more per year than you?  If so, that is a 25% CoC return not to mention an increase in your property value.  That would be great!

Conversely, what can $60k buy you?  At 20% down that is only a $300k property which in my market does not buy much.  Not to mention furniture and set up. In another market maybe that can buy you a nice 3 bedroom townhome that comes furnished and profits $1,000 a month which would be a 20% CoC.  Still not as high as the scenario above but there is a factor of having two assets simultaneously appreciating and being paid down.

Lastly, and I am guilty of this myself often, I do not recommend spending on things with little to no return.  You mentioned paint, which may look real nice but return on investment on exterior paint will be minimal.  If its anything short of in terrible shape, STR guests are typically more concerned with clean and comfortable and what amenities you have versus how fresh your exterior paint is.  Adding a pool heater can have a great ROI, changing a house from an outdated color likely won't move the needle much.

Good luck!

Michael Baum · Answer

Hey @Felix Sharpe, so I am with @Grant Woodward.

Run the numbers and try to get a good idea of the cost of the work you are going to do plus the downtime that the STR will experience while work is being done.

60k isn't going to go too far when buying and setting up another place.

Post a pic or the listing for the place so we can get a look. It might not need a ton and you can get some direct advice.

Felix Sharpe · Answer

Hey Michael, thanks for the reply.

Here’s the listing:  Felix’s Listing

$60,000 to Reinvest in Existing STR or Scale Up And Buy Another Property?

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