How to diversify when comfortable ...

[Alan Ford]

Hi all, so two years ago I bought my first STR in the Smokies (PF area), the next year I bought another. I am about to start construction on my largest investment yet, in the same area.

A few questions:

1. I am relatively well convinced the area I have invested in is as good as it gets for STR. Should I diversify for future investments ? The fourth and fifth etc.

2. If the answer to number one is yes, how do you even start analyzing that? I compared the returns I get already to say buying something in Panama Beach last year and it didn’t even come close. If one wanted to diversify, how do you do it successfully?

3. If I'm comfortable with STR, should I stick with that or branch out into LTR or try something more foreign to me like house hacking or whatever.

Appreciate it!

[Paul Sandhu]

1. Yes.  The way I diversified is by purchasing small, medium and large houses in the same market.  Small sleeps 2, medium sleeps 3-4, large is 5+.

2. Try investing in a different market with different kinds of clientele. 

3. Stick with STR. If you went to LTRs you would be disappointed. Sort of like living on Reds, Vitamin C and cocaine; to living on the nicotine patch, a multivitamin and diet soda.