Choosing markets and COC

[Luis Silva]

Hello, biggerpockets community! I'm an aspiring STR investor, and I have been focusing on finding a good mountain place, or any other depending on advantages, that could maintain bookings all year long with no too pricy properties, can anyone recommend some markets? And the second thing I want some advice on is what is an acceptable COC? is 20% a good return? is setting a 30% COC return goal too ambitious?

Thank you!

[Alex S.]

I see similar posts to this pretty often. "What market is the best for STR?"

Maybe folks imagine that there is an investor out there with a secret honey hole and they're gonna say, "Sioux City, Iowa is a gold mine! We laugh at 20% CoC out here! We never pay more than $10K for our properties and we rent them at $10K/month!" It is an absurd question to me.

There is no best market.  There are niches in every market with big returns.  There are excellent operators beating the average market returns everywhere.  There are inside jobbers, like @Paul Sandhu, who greets all the refinery workers in some shantytown in Kansas (no offense Paul) on their way into town and then sells them an STR. There are DIY'ers and there are folks making money using property managers. There are markets packed with apartments and condos, but desperately short on 5bd/4ba homes. SO. MANY. POSSIBILITIES!

If I wanted to start in STRs...I'd look around my own backyard. I'd call every city planning division and ask about STR regulations. Use the ENEMY method and see what kind of competition you might face. If you can't find a niche in your own backyard, decide your budget, then split your research between vacation rentals and "business travel/hotel market" STRs.

Any way you slice it...if you are asking "What is the best STR market?", I propose that you are asking the wrong question. You should ask, "Why won't my home market work for an STR?"