Short term rental (STR) in Soldotna/Kenai AK

[Sri Voodi]

Hi all AK investors,

We recently visited AK during month of June and fell in love with the wilderness/mountains/lakes etc. So, we are now planning to buy a property where we can stay in AK may be a month or two during summer (school summer break) and rent it out on Airbnb during the rest of the year. We live in Los Angeles and my wife works from home full time and my work can be very flexible. 

Do you guys think it is practical and a sound financial decision?

We are looking for something with 3bed/2bath, turnkey property.

I would really appreciate if any of the AK investors can answer these questions

• Is Soldotna/Kenai area a good choice for a STR compared to Anchorage/Seward/Girdwood etc.?
• Cooper Landing seems pretty good but the inventory is low and the prices are high. Is it worth investing in this area even though the prices are high?
• How much occupancy can we expect during Summer? (June - Sep)
• How much occupancy can we expect during Winter months? (Oct - May)
• Are there any property managers in that area that you would recommend?
• How are the property manager fees structured? By each visit/reservations/emergency calls?
• What can I expect regarding the charges by property manager?

Thanks in advance. 

Voodi

[Connor Dunham]

Hi Sri,

There's a fair number of STR managers to choose from between Girdwood and Willow. They will get more scarce as you get to Soldotna, Kenai, and Homer. Look up @Valerie Buss to find some connections on the Kenai, she lives down there. AirDNA.co has all the data you need to select the right market for an STR. 

Best of luck with your search.

[Sri Voodi]

Thanks Connor. I will definitely reach out to Valerie regarding her opinion and any property manager referrals. According to AirDna Seward seems to be more profitable than say cooper landing or Soldotna

[Valerie Buss]

Hi Sri, you got the Alaskan Bug! :) 

The Kenai Peninsula is a great place to invest and own STR. I always recommend Homer over Kenai/Soldotna/Cooper Landing. It is more expensive to invest in Homer, but you can expect higher nightly rates. Homer is a huge destination. Kenai and Soldotna only really get tourists for fishing and is very dependent on fish runs and river openings/closures. Cooper Landing doesn't see much for tourism; it is more just people passing through getting to their destination. I am not saying there isn't any tourism, but I don't see there being enough to make it financially beneficial, IMO. Homer sees more in tourists and more consistently. My husband and I own 2 STR - this summer, we have had a 0% vacancy. If someone cancels, we are rebooked in a matter of hours (which is at a $320 nightly rate price point). However, this has been the busiest season of tourism Alaska has seen. In the winter months, we have about a 50% occupancy in our less expensive rental ($115) and about 25%-30% in our higher price point (winter rates $250). In the wintertime, you get a lot of Alaska residents traveling and families traveling for team sports/events.

Seward - also a great spot, but I will always choose Homer over anywhere else on the Peninsula. Not just my biased opinion. Homer consistently sees more visitors. Another great attribute to Homer is that we have an airport with direct flights from Anchorage. Anyone traveling to Seward has to drive. As we saw this year with the rental car crisis, many folks were flying directly into Homer, and many other folks had to change or cancel their plans due to not having a car. We were 90% booked for the summer before April and did not have a single canceled reservation due to guests not being able to rent a car. I know other areas were hit with this.

If you are residing in the rental for the summer, you will be missing the most profitable months. Alaska tourism slows down drastically in the wintertime, and you can expect our busy season (on the Peninsula) to start around Memorial Day and end around Labor Day. However, we saw it start and sustain in early April of this year - I will be curious if we see it last longer into the fall this season.

The key to a great STR on the Peninsula is the view - this ensures you will always be booked. People traveling all the way to Homer want to pay for the view. Our rentals sit right on a bluff overlooking the Kachemak Bay, mountains, and Homer Spit. I would be more than happy to assist you/guide you to STR management in the Homer area. In Homer, the typical rate for a manager is 20-30% depending on how much assistance you want/need. (i.e., maintenance, ground maintenance, cleaner provided, amenities provided, etc.)

Please let me know if you have any other specific questions, and I would be more than happy to answer.

Thank you for the shoutout, @Connor Dunham!

[Sri Voodi]

Thanks @Valerie Buss. 

Awesome insight. Thanks for taking time to answer. I will definitely look into Homer properties too. I think you have valid points to backup the popularity. Can I share with you some properties I might like as I research more to get your feedback? 

"the typical rate for a manager is 20-30%" - 20- 30% of what?

Thanks.

Sri

[Brendon Seiffert]

I'm in Kenai, minutes from fishing and am converting my home into a STR. If you plan to be there in the summer, you'll be losing out on a lot of money. I'd imagine you'd be better off with a seasonal renter then a STR in the winter

[Valerie Buss]

Originally posted by @Sri Voodi:

Thanks @Valerie Buss. 

Awesome insight. Thanks for taking time to answer. I will definitely look into Homer properties too. I think you have valid points to backup the popularity. Can I share with you some properties I might like as I research more to get your feedback? 

"the typical rate for a manager is 20-30%" - 20- 30% of what?

Thanks.

Sri

 Absolutely! Feel free to message them on here or email me. 

20-30% of gross rents 

[Sri Voodi]

Originally posted by @Brendon Seiffert:

I'm in Kenai, minutes from fishing and am converting my home into a STR. If you plan to be there in the summer, you'll be losing out on a lot of money. I'd imagine you'd be better off with a seasonal renter then a STR in the winter

Thanks Brendon. You have a valid point and we have been discussing the same, whether to be STR landlord or a seasonal renter?

But our stay shouldn't be more than a summer month in the whole year. And we are not looking to make a lot of money off it, just enough to cover the PITI/Property management fees/flight tickets. Any positive cash flow over that is a bonus. Our budget is around 400k for the property. And PITI (25% down) will be around $2K per month and one time flight tickets at $2k per year. So if the property is rented out for 90 nights a year@$300/night, PITI/flight tickets should be covered. Management fees is something I didn't quite do the math yet. I think we should be ok financially - what do you think? Am I missing something? 

Thanks

Sri

[Tyson Cox]

The biggest issue right now is that there are very few quality homes available for purchase in the Kenai/Soldotna areas. I would assume the same issue is happening in Homer. I have seen that homes on the Kenai River do very well in the summer and winter. The problem is they are very pricey ($900k-$1.5M) for the older, well maintained and well located properties.

[Corey Ritter]

This is an older thread but I am new to investing in RE (other than primary residence) and in Kenai/Soldotna myself. Would love to make some connections with my fellow investors in the area. If no response I'll try each of the above privately ;)

[Account Closed]

Quote from @Corey Ritter:

This is an older thread but I am new to investing in RE (other than primary residence) and in Kenai/Soldotna myself. Would love to make some connections with my fellow investors in the area. If no response I'll try each of the above privately ;)

I've been to Anchorage a few times, in the winter, on business. I wouldn't even think of going there for a STR stay. ;-) Summer is fine, but how long is the summer season? Do your numbers and see if the numbers make sense.

[Noah Bacon]

Quote from @Corey Ritter:

This is an older thread but I am new to investing in RE (other than primary residence) and in Kenai/Soldotna myself. Would love to make some connections with my fellow investors in the area. If no response I'll try each of the above privately ;)

 Hey Corey! Welcome to BiggerPockets and thanks for joining!

Here are some tips for networking and making the most of your account.

1) I'd fill out your profile fully before you do anything else! As that will at least help folks that you reach out to know that you are a real person, with a picture and professional bio. Particularly be sure to include your goals for real estate investing so that folks can help you.

2) Go to the Search bar, and look for some local members in your area! Reach out to a few of the folks, perhaps those with hundreds or thousands of posts in this forum, and connect. You can do that here.

3) Check out some of the local meetups that you can find in this forum! There are so many so be sure to filter by your location.

4) Review this comprehensive 64 page deck on the state of the 2023 housing market (in your resource page as a member of BiggerPockets!) for real estate investors put together by Dave Meyer and available for all BiggerPockets members.

5) Consider meeting with a few agents in your area even if you are just getting started! An investor friendly agent can do all sorts of helpful things, like setting you up with a search for properties or connecting you with folks who have recently done deals like the ones you want to do.

6) Consider analyzing a deal or two in your local market, just for practice, with a free use of our Rental Property Calculator (or other calculators).

Hope this helps! Please reach out with any questions you may have!

[Dave Skow]

@Sri Voodi- thanks   1) if you would need  financing to purchase ....make sure you get into a  formal loan pre approval  position  so that you can be  prepared and  organized to make any offers ...good luck

[Corey Ritter]

Quote from @Account Closed:

Quote from @Corey Ritter:

This is an older thread but I am new to investing in RE (other than primary residence) and in Kenai/Soldotna myself. Would love to make some connections with my fellow investors in the area. If no response I'll try each of the above privately ;)

I've been to Anchorage a few times, in the winter, on business. I wouldn't even think of going there for a STR stay. ;-) Summer is fine, but how long is the summer season? Do your numbers and see if the numbers make sense.

Plenty of people come here or travel within state during the winter. Summer season is about 3-4 months. The numbers definitely have to make sense ;)