Your 2 cents on my STR / Vacation rental opportunity

[Kevin Horton]

Your opinion is welcomed.

My wife and I came across an inexpensive property, in a pretty popular vacation destination in the mountains, that we would enjoy for ourselves. Around $70k. This property is a cabin, but doesn't qualify for traditional lending, as it's a sort of tiny home /park model built on a chassis, however we would own the lot.

The current owner states 2019 rents were about $10k (via VRBO, AirBnB, etc). I will verify before purchase. 

We have the ability to purchase the property with all cash, but would like to hear from those with short term rental experience on if you think it would be better to tie all cash in this one property, or possibly take a HELOC for a portion to keep the liquid funds for a potential additional investment, should one come up.

Considering income potential vs purchaser price, both options have attractive qualities. 

What are your thoughts?

Thanks

[Jerry W.]

@Kevin Horton, you didn't give us enough information to know if it is a good deal or bad, I understand you want advice about pay cash or use a HELOC. My 2 cents is use cash. here is why. You pay interest on a HELOC when you use it. It is an added cost and you wont get anywhere near the rate from a savings account or a CD. When you find something else you want later then use the HELOC. It also keeps your DTI in better shape.