Approach to scouting markets on the ground

[Joseph E.]

Hi Everyone - I'm planning on taking a trip out to both the Carolina side of the Smokies and the central/northern Oregon coast over the next month. These are the two markets I'm seriously considering for the my first STR investment (which I intend to manage remotely from CA). I've never been to either of these places, and am only familiar with these locations from the research I've done over the last few months. While there are a few specific properties that I will visit for each trip, this is more just to get an on the ground feel of the market before I pull the trigger on an investment.

I have a couple questions for the group:

1. Is visiting the market before buying actually that useful of an exercise? I've talked to people about this, and have received conflicting advice.

2. When you scout a prospective market for the first time, what some of the things you are looking for? 

A little detail on the approach I intend to take: Outside of a few specific properties that I'm interested in, my plan is to compile a short list of comparable Airbnb listings that appear to meet my criteria (size, price, ADR, occupancy) and drive by those listings to get a feel for what those locations and neighborhoods look like. Similarly, I intend to visit places that meet my price and size criteria, but seemingly don't perform as well on ADR and occupancy so I get a sense of the types of properties I will need to rule out. 

Thanks!

[Taj Richardson]

Definitely get to know the regulations for the markets you are looking into. You are correct, for the Oregon Coast, the best markets to look in include Rockaway Beach, Seaside, and Florence. For Seaside, you will only get a permit if it is west of the river. You will want to include all of unincorporated Tillamook County on your list (this includes Pacific City, Oceanside, and Neskowin). You will want to consider Lincoln City as well (west of Hwy 101). L.C. has a wait list but is a top market on the Coast. Don't overlook North Bend and Reedsport either.

You are correct about seasonality, but it is more like 80-99% occupancy between May and October (house dependant), and if a vacation home doesn't have a view and close beach access in the winter months occupancy can be as low as 10%. Averaged out, Oregon Coast occupancy should be very close to 65% annually.