STR: Great Locations Under 450K

[Pearce Trenary]

Do you know of any great locations that I could get into an STR for 450k or under? I have the ability to go higher however I want to put a good bit aside to furnish the STR and make it stand out. If over 500K is needed I am able to borrow from a family friend however would rather not take this path.

I have been looking at the Forgotten Coast, Emerald Coast, Blue Ridge, Smokies, and Branson.

Open to all locations. I will be living in Florida however do not care about the location. This is primarily for investment purposes so am mainly interested in ROI

[Collin Hays]

This method of evaluating STRs sounds like trouble.  Much like a public-traded company (stock), STRs are valued based on earnings or the potential for them.  If you find a house for $450K that is producing $30K in rents, but you find another that is $550K that is producing $60K in rents, which is the cheaper house?  

The difference in down payment of 20 percent is going to be $20,000.  $90K for the $450K house, and $110K for the $550K house.

Focus on earnings to price ratio, rather than just the price.  

[Pearce Trenary]

@Collin Hays I agree however my funds are limited and I have to set aside a healthy amount for rehab and furniture. I think it is best to get into a property now and start getting cash flow than wait

[John Underwood]

If you are in Florida, I would look in that area, coastal, Orlando, Tampa, St. Augustine etc.

[Joseph Velez]

Pearce,

I would agree with John Underwood, if you live in Florida I don't think there is a better place then Orlando to buy an STR property.

[Collin Hays]

Originally posted by @Pearce Trenary:

@Collin Hays I agree however my funds are limited and I have to set aside a healthy amount for rehab and furniture. I think it is best to get into a property now and start getting cash flow than wait

 In that case, I've got a cabin I'll sell you for $450K today fully furnished that already has $43K booked for this year!  PM if interested.

[Kyle Momany]

@Pearce Trenary Looking in Florida would be a great start. I'm not sure exactly where you live but a good bit of the state is dependent on tourism, hence why it is does bring such good returns. Lots of STR's tend to come furnished already. In your price range you would be looking at condo's & townhomes primarily ( In my area at least). Best of luck to you!😁

[Shawn McCormick]

@Pearce Trenary In Orlando, that budget will limit you to mostly townhomes at this point if you want to be in the better communities that have guard gated, amenities galore and good reputations. If you don't mind going to a little older community or a 3-4 bedroom home, you'll have a lot of choices in that price range. Virtually all of these will come furnished (may not be to your taste and always room to improve) but they are pretty turn key. Let me know if you need more specific info. Good luck!

[Chaits J.]

Originally posted by @Collin Hays:

This method of evaluating STRs sounds like trouble.  Much like a public-traded company (stock), STRs are valued based on earnings or the potential for them.  If you find a house for $450K that is producing $30K in rents, but you find another that is $550K that is producing $60K in rents, which is the cheaper house?  

The difference in down payment of 20 percent is going to be $20,000.  $90K for the $450K house, and $110K for the $550K house.

Focus on earnings to price ratio, rather than just the price.  

But will this current crazy revenue numbers( 2020 and 2021) be be there 3 years from now ? That's the big fear that's stopping from adding more STR's in current market. So tempted to buy but what if my destin or gulf shores 1 million property does not generate 150K in 2024.

Looking forward to expert opinions like yours!

[Matthew Edge]

Are People Recommending Orlando even with the amount of competition there?  Any particular communities in that area that seem to perform the best as far as amenities and location (ie. windsor hills, championsgate etc)?  Im guessing in that market that you really need to go all out on theming and decor?

[Pearce Trenary]

@Matthew Edge yes that is what I have heard that orlando is still a good market however a theme is a must and it has to be in one of the resort areas that has many amenities 

[Chris Mury]

Originally posted by @John Underwood:

If you are in Florida, I would look in that area, coastal, Orlando, Tampa, St. Augustine etc.

Gotta agree with John here. I'm partial to St. Augustine and live/invest here. Great STR market!

[Tyler Gibson]

@Matthew Edge Champions Gate, Storey Lake, Windsor at westside, Solara. All great communities but you will pay a premium right now for a property in one of these communities. 

[Pearce Trenary]

@Chris Mury do you think it is better COC returns than destin/pcb area?

[Chris Mury]

Originally posted by @Pearce Trenary:

@Chris Mury do you think it is better COC returns than destin/pcb area?

Hard to say, I don't follow that market closely.

[Shawn McCormick]

@Matthew Edge Orlando is a big market and is still growing by very big players, not people buying a cabin or unique property for the view. These are primarily cookie cutter houses that feed the theme parks, beaches etc. So, yes, the theming has to be above average to stand out and a bigger house (7-9 ) beds is more ideal as there are less of them and they can be themed out to be special (a condo and townhome can't really do that). People aren't coming for the mountain views or to be near nature. This is primarily to create memories for the kids and the house is just an extension of the theme parks..guests want to have amenities and games even outside of the parks. There are about 6-8 prime communities that offer the best amenities and homes that have the size host large families/groups.

Hope this helps.

[Ryan Moyer]

Originally posted by @Matthew Edge:

Are People Recommending Orlando even with the amount of competition there?  Any particular communities in that area that seem to perform the best as far as amenities and location (ie. windsor hills, championsgate etc)?  Im guessing in that market that you really need to go all out on theming and decor?

There are roughly 1.65 gajillion people that vacation in Orlando every year.  Make your place in the top 10% of quality STRs (IE theme rooms, arcade/theater, etc) and you'll have an endless supply of potential guests.