Low investment properties-future of airbnb?

Question

Hope everyone is keeping safe during these bizarre times. Before covid shitshow started and took over our lives, I was on the verge of buying a vacation rental in Florida Panhandle by flying down in March end and finalizing a property. At first, like many of us, I thought it will be over by summer and i might be able to go ahead with my plans. But then the wait for the end of pandemic started which still hasnt ended. In all this i had to take this decision of letting go of my plans as common sense suggested that with this economy and fear created by virus, people wont be traveling much. So buying a 500k+ property didnt make sense.

Now with beginning of the end of pandemic in sight, i had again started to analyze the market and it seems people are traveling again and especially by car to nearby places, beaches etc. Looking at the trends, it seems buying a property in some semi hot areas rather than usual hot/popular places might be a better strategy in today's times, considering less spending power of people. So a 200-300/night for a whole house near some beach in texas or South Carolina will have more takers than 1000/night in palm springs, california.

Not sure if you guys agree with this, but just in case which states/areas/towns you may suggest where one can get a decent or semi decent property (full home rather than condo) for less than 250k and is reasonably popular among tourists and can get 250-350/night?

Thanks!

John Underwood · Answer

Dev,

I think if you can find a place for half what you were going to originally spend it might be a safer investment. The 500k place will likely be bigger and sleep more people.

As you said a beach house that people can drive to will always be popular and people have been traveling by car to go on vacation.

The Carolinas have some nice beaches.

Account Closed · Answer

Our STRs on Topsail Island, NC regularly book solid from Apr-Sept. Over the winter months, we rent out month to month. This year we are going to try rent by the room to increase the monthly rent over the winter time. There are a lot of military members in this area that are only hear for a few months at a time.

Paul Sandhu · Answer

Coffeyville Kansas.  I'm getting .6% per night.  But these are bank foreclosures, not sales from an individual.  Tenants are not tourists, they are mostly oilfield trash ruffians.  The rest are just rednecks.

Jason Wray · Answer

@Dev Paul In Florida you have a non stop market for year round STR.  Orlando, St.petersburg, Clearwater, Panama Beach, Daytona.  During COVID-19 our beaches were still slammed with OOS renters/STR.  Places that had not been booked in months were turning people away last month.  Just depends on where you want to be and price point.  For $225-325K you can get a really nice property around the Pinellas County Beaches.  You could also buy (2) smaller units for that price range as well but would just need to look at the condo/townhomes and shop for best/lowest HOA.

Luke Carl · Answer

@Dev Paul. Smokys. Although .1% per night is ambitious. If you find that market let me know I’ll buy the whole town

Serena Kim · Answer

@Dev Paul

“Slow” season in central FL is July-September in my experience. My occupancy has averaged 80-85%. During those months you just adjust the price to maintain same occupancy level, it just means less profits. Those months are also the warmest, hence your electricity bill / costs increase.

No reason to sell for me. I still think buy and hold is the best strategy in the area.

Katharine Schmuff · Answer

Dev,

The Shenandoah Valley is a nice place to invest. You have both Massanutten, and Wintergreen resorts. Properties on Massanutten tend to be reasonably priced compared to other vacation destinations. Right now, mountain homes, and hiking destinations are really popular (social distancing fun).

Mike Shemp · Answer

We have a short-term rental in the Outer Banks and it has done very well, and seems to be more in demand post-covid.

We book it year round, with the slow months being January/February.  Being in a salty environment, there is a bit more maintenance, so the slow time is used to do repairs, etc.

Mike

Jaeseok An · Answer

@Luke Carl @Dev PaulSeen people getting above 0.1% from mobile houses, tiny houses and mud houses. The number was something like 30-50k to purchase the entire thing and they are getting 50 - 130 daily rate. I've also seen similar returns in many parts in Asia. Like purchasing 2 bedroom house at below 50k and renting them out to English speaking foreigners at $60 or higher.

Dev Paul · Answer

Thanks guys for your responses. It seems it will take some time to do all this research, but certainly potential seems to be there.

Low investment properties-future of airbnb?

Most Popular Reply