Investor · New York, NY · Member since 2020 · 33 posts · 19 votes
Hello all,
Does anyone purchase properties that are existing STR? Either furnished or unfurnished deals. Does it make any sense at all to look at this type of home, and, if so, does it ever make sense to buy sight-unseen? I live in the NE and I won't be traveling anytime soon to the SE region, where income would be vastly greater from this sort of property (generally).
Finally, if "yes", in which markets have you found success using this method?
Property Manager · Pigeon Forge · Member since 2016 · 199 posts · 208 votes
5y
It happens with 99% of the cabins in the Pigeon Forge/Gatlinburg area. And I'd expect the vast majority of these to be at least put under contract without seeing it in person.
I'd expect buying furnished to be very common in all touristy destination including ski and beach towns, but I don't have familiarity with those.
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
5y
Sort of. When my long term renters move out (getting married, nursing home, etc) I offer to buy all their furniture, appliances, electronics, utensils, etc. Everything except their clothes. Voila, I have furnished rental for STR purposes. My market is a small town with a refinery. I rent my places to refinery contractors. Welders, fitters, boilermakers and sparkies. Big burly guys with neck tats. They drive jacked up 4x4s and chew tobacco in their sleep. They are ruffians. I have to be a ruffian too. I suggest you not rent to ruffians.
Property Manager · Pigeon Forge · Member since 2016 · 199 posts · 208 votes
5y
It happens with 99% of the cabins in the Pigeon Forge/Gatlinburg area. And I'd expect the vast majority of these to be at least put under contract without seeing it in person.
I'd expect buying furnished to be very common in all touristy destination including ski and beach towns, but I don't have familiarity with those.
Investor · Nortnern Colorado · Member since 2020 · 157 posts · 131 votes
5y
Yes. I just bought my most recent STR furnished and out of state. Never set foot in the door. You need a GREAT team on the ground wherever you decide to buy. That's going to start with your real estate agent. They'd better know the area really, really well, and IMHO they should own there too. Not all agents are the same. Find one that fits your style and need (some are more accessible and open to doing long-distance showings than others, for example).
RE your question about furnished, yes to that too. Make 100% certain what's included. This will most likely NOT be included on purchase & sale agreement though! Furnishings are almost always on separate "personal property" sales agreement, often a whole house full of furnishings for $1. I'd recommend some sort of itemized list from seller or "items as seen in listing pictures" etc so that you don't have any last minute surprises. My wife and I joke about a listing that said "the bear does not convey." ie. no carved bear if you buy!
It can be done. Do your homework. Lots of it. This form is a great place to cruise through and research. The search function is awesome for specific questions you may have.
I am a Real Estate Agent in Tampa, Florida. I work in Pinellas, Pasco and Hillsborough Counties. People buy and sell STR's all time. Most of which are out of town buyers looking for passive income. They use the Realtor to buy them and manage the property. It's very common here. It's especially popular around here due to the proximity to Clearwater and St. Pete Beaches. There are regulations but there are ways to get around them as well. The downfall of buying an already running AirBNB is that the new owner then has there own account. So you lose the existing feedback and reviews. That could also be a good thing though if the property had bad reviews. It might even be possible to negotiate buying the listing from the owners to keep the already approved and reviewed space. Keep in mind to do your research because people do run unapproved AirBNB's and you don't want to buy on that doesn't follow the area's regulations. You could get caught in a bad deal. You will need a very trusted agent with a team to manage it. I hope that helps! If you have questions feel free to reach out! All the Best!
If you're new to STR's I wouldn't recommend buying an already furnished STR. Most likely you're paying top dollar for a house that someone already tried to rent out, and failed. Unless you have some hidden advantage, you'll do the same, or worse. It's usually a better guarantee to buy a beat up place, rehab, furnish, and do your due diligence. This is a business venture, not nearly as easy as a long term rental that you can do sight unseen in most places. You need a really good set of people nearby to take care of the place.
Investor · Tampa, FL · Member since 2016 · 679 posts · 288 votes
5y
Lauren C. If you are not familiar with AirBnB rentals, then do one where you live and see if it works. I was looking into that here in Tampa, Fl. and it turned out to be a big expense to set one up with the Host/Manager that I contacted. They wanted me to give them the Cash to fix up, decorate, furnish with all new furniture, set up a barbeque in the back with bigger patio etc. as they saw fit. They wanted security cameras throughout and then sub-contract the management to a Third Party Agent! The final nail in that coffin was their Hosting/Managing fees would use up 50% of the Rents and after a few years they would want to spend another $10,000 on new furniture etc. Then they backed down because of the CDC mandating that no one has to pay rent until the end of the year etc. They said they would try to keep their current list of rentals going until after the CDC ruling. I decided to just sell my home in Tampa and not even think of renting again until after the CDC Rent Ruling is stopped and see if we have a downturn in the property values where I could pick up a fixer upper for cheap and do a BRRR. My neighbor rehabbed a 4/1 block home with two 1/1/1'a in the back two years ago. He has been occupied in the front house at $230,000 a day, almost every day, for months with lots of Commercial guys with big trucks etc. He is making it work, but, he had one before this and he manages with his own Team and not an expensive Host/Manager. I could not make my property work without self-managing. Plug in the numbers and see what you get.
Rental Property Investor · Franklin, TN · Member since 2019 · 160 posts · 125 votes
5y
Yes, Palm Springs, CA. Turn-key furnished down to linens & kitchenware. Beautiful property. Fun to visit & pays for itself year-round. Currently booked to March 2021.Appreciated nicely. Did cash-out refi with lower rate. Used proceeds to acquire STR nearby La Quinta (before current permit moratorium). Making double mortgage payments to build equity faster.