Urban Investment Opportunities? What cities to invest in?

Question

I just formed an LLC and I want to start buying/listing STR properties on Airbnb.  Does anyone know of any good urban areas to get into?  I will be self managing these and I prefer to live in an area with more of a city vibe.

Paul Sandhu · Answer

Find a medium to smaller sized city/town with a refinery, nuclear power plant, papermill or other single big industry that requires lots of maintenance.  The people that do the maintenance come from out of town and need a place to stay.  They can be the tenants of your STRs.

The population of my town in 9000, and there is a refinery.  At any given time there can be 50-150 contractors in town.  I offer them a place to stay that costs less than a motel and has all the conveniences of home.

The guys that make alot of money (boilermakers, instrumentation technicians, specialty welders) can afford to pay a good amount of rent each week, but they don't stay here very long.  2-4 weeks typically.

The guys that don't make alot of money (scaffold builders, firewatch, hands) can't afford to pay alot of rent, but they are here a long time.  My scaffold guy has been here 70 weeks and sees no end in sight.

Erin Spradlin · Answer

If you're looking outside of Texas, we recommend Colorado Springs for Airbnb to our clients. The city is benefiting from Denver's overflow, the culture is quickly changing to a more desirable place to live, and, physically, it's a very beautiful city. Point being it's appreciating. Also, the city seems to embracing Airbnb rather than rejecting it. If you'd like to discuss more, shoot me a message and we can discuss.

Myka Artis · Answer

@Liz Weiss Are you looking specifically in Texas or all over? If you are looking in Texas you should check out DFW, New Braunfels, Marble Falls, Houston, San Antonio, and Austin. I hear Austin has strict laws though. Marble Falls is a bit outside of the city of Austin but you will make a nice little chunk of change if you can get your hands on a property that's on the river. Also if you are looking for other cities outside of Texas you should check out Canmore, Alberta, Big Bear, CA, Estes Park, CO, etc. I could go on and on. Those are the towns I have seen great returns in.

Carrie Hiner · Answer

Austin Texas is a great place for short term rentals because our festivals, conferences and conventions draw so many people.  The downside is, the City of Austin heavily regulates them.  Neighborhoods are zoned by census track and a limited number of licenses are granted.  They do not transfer at time of sale, so you can not buy someone's STR license.  https://www.austintexas.gov/str

Mike Reynolds · Answer

@Liz Weiss I would think Seguin would be an awesome area for STR investment. You have San Marcos and New Braunfels right there and the rivers.

Nicholas Miller · Answer

New Braunfels likes to state, they require a minimum 1 month, so short terms are kind of tough.  I know from experience. With that being said, people still do short term rentals there but be prepared.  I have short term rentals at Canyon Lake and they do AWESOME.  I have a 4 Bdrm that brings in $2,000 a month gross in the off season and $4,000 a month during the summer. Just pay close attention to HOAs before you purchase.  They are the ones that can shut you down in a flash.  If you can snag a house downtown S.A. you will also hit a home run.  A 3/2 should bring in about $2500 a month (if you are close to downtown).  Look around the Alamodome area. I keep hearing the city is about to invest a lot of money in the surrounding area.  I have a house in Southtown S.A. (lavaca historic district) and the entire area is being gentrified.  I am actively looking for long-term rentals in Seguin so perhaps our paths will cross.

Liz Weiss · Answer

@Mike Reynolds  I know people in the area that do okay on Airbnb.  I'm looking to get into a bigger more populated area.  I know a lot of the big cities are hard to stay cash flow positive, so I'm trying to figure out where my middle ground areas are.

Urban Investment Opportunities? What cities to invest in?

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