STR (vacation rental) which one would you choose?

[Samir Solanki]

Hoping I can get some wisdom from all the STR gurus. Here are the options I have.

Option 1:

Purchase price $201K

2 bed/ 1 bath

Conservative daily rate $200/night

Conservative occupancy 35% (annually)

Net cash flow monthly $250 (conservative)

Actual estimate through AirDna $338/nightly and 49% annual occupancy. I like to be conservative, though.

Initial investment $25K (10% down and closing)

Additional cash $10K (furniture and decorations)

Total cash investment $35K

Property is renovated and not much needs to be done.

Option 2:

Purchase price $305K

3 bed/3 bath

Conservative daily rate $325/night

Conservative occupancy 35%

Net cash flow monthly $400/month

Actual estimate through AirDna $450/nightly and 49% occupancy annually.

Initial investment $37K (10% down and closing)

Additional cash $15K (furniture and decorations)

Total cash investment $52K

Property needs work. It is rentable as-is, but to get top dollar it needs about $50K worth of work. Once work is done it could bring in between $550-$650/night.