Exploring short term rental vacation markets

[Sam Lanzino]

My wife and I exploring the option of an investment in an STR. Have listened to some podcasts / videos and have started exploring some markets. We are exploring markets that we know and have been to: Orlando, Deep Creek Maryland, VA Beach.

1) How difficult is it to self manage from a far? It seems like a lot of things can be done via apps/technology and if you use a management company you will not be profitable. If I can find a handyman / cleaning service is there anything else major that I need to consider besidings handing bookings/communications/locks?

2) Some of the markets I am looking at are dominated by 1 - 2 large management companies / realtors (e.g., deep creek maryland). Seems like a deterrent to jump in and self manage. Am I missing something here? 

3) How tough are seasonal markets? I've ran the numbers using a few spreadsheets on here and it seems like some of the northern seasonal markets are incredibly tight to make your money - if you don't get full vacancy between memorial day / labor day then forget it.  It seems like less risky option to invest in florida markets.

4) Any other tips / guides for STR vacation market?

[Mark Miles]

Originally posted by @Sam Lanzino:

My wife and I exploring the option of an investment in an STR. Have listened to some podcasts / videos and have started exploring some markets. We are exploring markets that we know and have been to: Orlando, Deep Creek Maryland, VA Beach.

1) How difficult is it to self manage from a far? It seems like a lot of things can be done via apps/technology and if you use a management company you will not be profitable. If I can find a handyman / cleaning service is there anything else major that I need to consider besidings handing bookings/communications/locks?

2) Some of the markets I am looking at are dominated by 1 - 2 large management companies / realtors (e.g., deep creek maryland). Seems like a deterrent to jump in and self manage. Am I missing something here? 

3) How tough are seasonal markets? I've ran the numbers using a few spreadsheets on here and it seems like some of the northern seasonal markets are incredibly tight to make your money - if you don't get full vacancy between memorial day / labor day then forget it.  It seems like less risky option to invest in florida markets.

4) Any other tips / guides for STR vacation market?

 You’re asking all the right questions!

1) Buy in the Southern half of the US - that's where the big money is made in STR. You need places that will be occupied 10, 11, 12 months a year - that simply doesn't happen in the northern half of the US. No one wants to vacation to Cape Cod, Alaska or Woodstock in February.

Slow season in the south is that 6-week period when occupancy drops to 50%. Slow season in the north is that 7-month period when no one books.

Remember, you can only invest every dollar once, you should invest it where you can make the absolute highest return, and that is certainly not anywhere in the north. And that is also why I don't invest in or near my hometown either. Because the highest ROI is about 1000 miles away from me where I own a number of properties that make a ton of money

Anyway, there’s some great resources on the internet that show the amazing numbers you can earn on STR down south. Once you see the STR data on these various southern towns, you’ll see that you simply can’t get annual revenue, annual occupancy rates, annual net income, & annual ROI like this in the north.

If you pick the right spot down south, a 3+ BR house can bring in anywhere from $100k-$250k per year. As I said, you can only invest every dollar once. I doubt Deep Creek will pull in this kind of money...

2) STR Property managers are simply schedulers. Don’t let a scheduler take your profits. Either self-manage like many on here do, or hire an inexpensive offshore PM who works US hours & speaks eloquent English (that’s what I do). Mine can set door codes, message (or call) guests, schedule cleaners, adjust the thermostat, monitor my cameras, & call a plumber just as easily as a local PM can, for 1% of the cost

I wrote much more about leveraging offshore assistants in this post here. If you find it useful, feel free to upvote ;)

https://www.biggerpockets.com/...

3) Hire good cleaners, a solid handyman & befriend some helpful neighbors. Save your money on PMs & pay these people well instead. Call me crazy, but I prefer to spend my money on people who will actually see the inside of my houses, not a scheduler