Highest and best use: There's more money in Vacation Rentals

[John D.]

I'm all in on vacation rentals. While so many investors are searching high and low for that multi-unit that's a bit under-priced, or that's slipped under the radar. Or that SFR that other investors have overlooked, that would rent a bit better then average for the sale price, condition, and project expenses......I feel like I am out there with next to no competition.

    I'm curious as to other vacation rental owner's take, but I get excited about the prospect of competing to buy a place where the other potential buyers will either owner-occupy, or use the property for  different use as myself.

   Assuming my converting the use of the property (from owner-occupied to vacation rental, or from traditional rental to vacation rental) is the highest and best use of the property, and assuming there aren't may people aggressively doing this in my target area, many properties are not rationally priced to market (short-term) rents, but rather far below it in many cases.

   I'm curious as to other investors take on this short-term market pricing inefficiency, and how long they think it will last........or if it isn't actually an inefficiency, and bakes in the risk that the vacation rental market rates will drop significantly, or that the local government may outlaw STRs.

  Anyways, just looking for opinions as I pivot my business model, take some gains, sell a few mil properties used as traditional long-term rentals, and redeploy that money into the short-term rental market.  In my eyes, there's a lot more opportunity, as the market is not rationally pricing properties to their short-term rental potential because in many areas there are few short-term rental investors competing.

[Account Closed]

I'm killing it with vacation rentals