More rooms, more money?

[Roy H.]

Hi all-

How do you decide how many rooms is too many rooms?

For example, let's say your market has 50% 3bd, 20% 4bd, and 10% 5bd demand.

Does this merit purchasing a 4bd property over a 3bd?

1. Higher ADRs
2. Booked calendars (40% occupancy)
3. Less competition for 4bd homes, so you'll stand out

But what about a 5bd over a 4bd? Where does it stop?

1. Even LESS competition
2. Even HIGHER ADRs
3. But lower demand (30% occupancy)

Is it a matter of buying the most rooms you can afford? OR is it finding a "sweet spot" in the market? Is diminishing returns a real thing in STRs?

With more rooms, you can charge more. But you'll have fewer guests because of the higher price tag. Isn't that good (fewer headaches, less wear and tear, less cleaning, etc.)?

Anyone with experience owning both larger homes and smaller homes, what do you generally see in terms of cash flow/work required? Any insight is very much appreciated.

[Mark Miles]

Originally posted by @Roy H.:

Hi all-

How do you decide how many rooms is too many rooms?

For example, let's say your market has 50% 3bd, 20% 4bd, and 10% 5bd demand.

Does this merit purchasing a 4bd property over a 3bd?

1. Higher ADRs
2. Booked calendars (40% occupancy)
3. Less competition for 4bd homes, so you'll stand out

But what about a 5bd over a 4bd? Where does it stop?

1. Even LESS competition
2. Even HIGHER ADRs
3. But lower demand (30% occupancy)

Is it a matter of buying the most rooms you can afford? OR is it finding a "sweet spot" in the market? Is diminishing returns a real thing in STRs?

With more rooms, you can charge more. But you'll have fewer guests because of the higher price tag. Isn't that good (fewer headaches, less wear and tear, less cleaning, etc.)?

Anyone with experience owning both larger homes and smaller homes, what do you generally see in terms of cash flow/work required? Any insight is very much appreciated.

 I would buy two 3-bedroom houses near each other, then you can advertise each of them separately, and create a third listing that advertises them together as a six bedroom. That way you’re flexible for large and small groups