STR Analysis for Dummies

[Elena Casey]

Hi all,

Newbie here. Thinking of purchasing an STR condo. It's a bit convoluted because I can use both, the property management company (51%! cost but house keeping/check-in included) or I could bring in the business myself through VRBO/Airbnb/Booking.com. For that I would have to pay a $55/check-in cleaning fee and $42/check-in fee (possibly by-passable). Planning on financing 20% HELOC and 80% Loan. I prepared a spreadsheet with an assumptions tab but there are so many variables, my head is spinning. It's a mountain resort with things to do year-round with April/October/November being slow. Listings for similar properties is about $90/night. Assuming a 30% vacancy to be safe. HELP! Am I too pessimistic? I will try to attach my spreadsheet if I can figure out how. TIA!

[Michael Baum]

Hey @Elena Casey, ok so I think I figured out which condo you are looking at. The biggest issue I see is resale later. Most of those places have been on the market nearly a year. So you know that it will be harder to move if you need.

Also, I don't think it works for a LTR. I am not sure if that will be an issue for you.

For me, it would be a pass for a couple of reasons. One is possible special assessments. I would go back and look through the HOA notes about any special assessments in the past. What did they cover etc. It was these types of SA's that kept us from buying something similar in Bend, OR.

The other of course is you are beholden to the front desk for pretty much everything. Frankly I don't see anyway out of that. If they decide to increase the charges, you will be on the hook. Add to that the long time to resale, I would pass.

I love the area though. We almost bought a BnB a long time ago in the North Conway area. I would start to look at something different, maybe a SFH of some kind. Run it yourself.