Delaware, OH · Member since 2017 · 50 posts · 13 votes
I know here recently, due to social distancing and stay at home orders, that STRs have taken a major hit. I do not own any but before the crisis I had an interest in them and have still been looking up info about the ideas and philosophies behind them.
Do you guys think this is a temporary hit that should pick back up when the market picks up or do you think that this downward trend as it relates to STRs last much longer?
Do you believe that short terms are still a good long term investment?
Investor · Greenville, SC · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Drew Lamb It depends. Not sure about non vacation markets, but as far as vacation markets I think this was just a bump in the road. I took an initial hit on my vacation cabins and had to lower prices in order to fill back up. But right now, my cabins are smoking hot and booked almost solid for the next 5 weeks or so at full price. Bookings are back to normal as of about 2 weeks ago.
Investor · Greenville, SC · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Drew Lamb It depends. Not sure about non vacation markets, but as far as vacation markets I think this was just a bump in the road. I took an initial hit on my vacation cabins and had to lower prices in order to fill back up. But right now, my cabins are smoking hot and booked almost solid for the next 5 weeks or so at full price. Bookings are back to normal as of about 2 weeks ago.
Real Estate Agent · Sevierville, TN · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Drew Lamb You should see the traffic in Pigeon Forge this afternoon, LOL - looks like any other pre-coronavirus weekend (that is, slammed). My calendars are full again and I have zero concerns about the long-term prospects of my particular market and investments.
Now, that is specific to my market of the Tennessee Smokies - there's going to be different recovery periods for different markets. For example, Hawaii is going to be tough for awhile because people don't want to fly, and Orlando will be tough as long as Disney is closed. Urban STRs are a different animal and I have more concerns about regulations than I do about long-term effects of COVID-19.
That said, I think the major vacation markets will rebound, and I remain confident in my vacation rental investments.
We are a little slower to recover out here in California, we are only in Phase 2 of 4 phases and STRs are likely to become available in the latter stages of Phase 3. That being said, certain counties are allowed to run their own schedules when approved by the state health department.
To your more general question though...people are going to want to take vacations and I would argue for the near future are going to prefer private residences to do that versus big hotels with lots of shared surfaces. My only concern is an uptick in short-term regulations and restrictions for the smaller destination communities that do not have large scale medical resources to combat any surges in cases.
Yes still a good investment in my opinion, just make sure you purchase at prices and financing terms that don't over leverage you and if possible, still cash flow as a long term rental if you have to pivot for some reason.
Delaware, OH · Member since 2017 · 50 posts · 13 votes
6y
@Ken Boone that is great news for you! I know given the right location and purchase price STRs can bring in a healthy amount each month do you find it easier to save up a sizable emergency fund because of this?
Delaware, OH · Member since 2017 · 50 posts · 13 votes
6y
@Julie McCoy would you say being in a vacation destination and not one located in more urban environments has offered more protection over the course of ownership?
@Julie McCoy would you say being in a vacation destination and not one located in more urban environments has offered more protection over the course of ownership?
Oh absolutely. Many established vacation destinations have had vacation rentals long before AirBNB/VRBO, they're an integral part of the local economy and thus the risk of them having onerous regulations is very small. Meanwhile, urban markets are struggling with how to adapt to this new wave of STRs in their districts, there's a lot of NIMBY-ing and hotel lobbying and city councils are coming up with new restrictions all the time (Nashville's STR landscape has changed dramatically in the last year or two alone, for example).
I'll stick with my cabins that are next to thousands of other rental cabins that get filled by millions of tourists who have been coming to the area for decades.
Delaware, OH · Member since 2017 · 50 posts · 13 votes
6y
@Julie McCoy thank you so much for that answer, That really helps! And I guess if regulations would come down hard and the industry and AirBNB or similar companies had to close you could probably list them on a local or private site and be in much better shape than those residing in major population regions.
@Ken Boone that is great news for you! I know given the right location and purchase price STRs can bring in a healthy amount each month do you find it easier to save up a sizable emergency fund because of this?
Yes it does, but I went in to this foray with plenty of reserves as well and with expectations that I might have to carry a few months to get started.
Rental Property Investor · Anaheim, CA · Member since 2015 · 138 posts · 37 votes
6y
I live in a neighborhood with tons of STR's. They are typically booked from folks visiting Disneyland. I'm literally walking distance & I see groups walking towards the happiest place on earth.
Disneyland has been shut down since March and I'm interested to know if any socal investors have any info regarding their STR's?
I was actually thinking about marketing to these folks directly.