Seeking Advice on Best Long-Term Investment Locations in the USA or Caribbean for STR

[Richard Foltys]

Hi everyone! 👋

I'm Richard from Toronto, Canada, and I'm looking for recommendations on the best locations in the USA or the Caribbean to invest in for a long-term hold (10-15 years). I'm especially interested in spots with strong short-term rental (STR) demand, where the laws are favorable to investors.

I have around $250,000 USD to put down as a deposit, and I plan to finance the rest through a mortgage. Ideally, I’m looking for areas with a mix of:

1. High occupancy rates for STRs (Airbnb or VRBO),
2. Solid potential for appreciation over the long term,
3. Investor-friendly regulations on short-term rentals.

If anyone has experience with markets that fit these criteria or knows areas where STR is thriving with good investor laws, I'd love to hear your thoughts. Thanks in advance for any insights or advice! 🙏

[Nick Belsky]

@Richard Foltys

Welcome to Bigger Pockets!

Much of the info you are seeking can be found on AirDNA.Com.  You can basic info on short term rental projections and occupancy rates with a free account, but will have to purchase a membership to get detailed info.  Here on BP, you can find market analysis of markets in the US.  The Top 100 is updated regularly and offers some valuable insight.

Purchasing outside of the US comes with many obstacles as many US based lenders will not lend outside of the US or it's territories. That means the same kind of financing that you will find for an STR in East Tennessee will be a far cry from what you would find in Costa Rica. Expect very low LTVs (we're talking like 40-60% down minimum), much higher rates, and very long close times for out of country financing. Everything will be far more expensive. We looked at some property in Belize recently and local banks had rates in the 10's for a 5 year term, variable rate, amortized, and with a balloon. All with 55% down.

Generally speaking, a location that is near a National Park or major attraction(s) are going to be the better locations for STRs.  Getting down deeper into the local regulations and such is each will require networking with city officials or other investors who are already active in those markets.  You should be able to find other investors on BP.  I'd suggest narrowing down to a few markets to explore, then reaching out to investors in those markets versus throwing a wide net.

Cheers!

[Mike Lambert]

@Nick Belsky

I'm not sure why you're generalizing the mortgage conditions in Belize to the rest of the area because they're very different. I've been investing in the area for years (not in Belize) and I haven't seen the kind of conditions you're describing so maybe they just apply to Belize. For example, in Mexico, you can put less than 40-60% down, interest rates are in the single digits and you can get 20- to 30-year mortgages (and you can't get anything shorter actually) and the right areas would fit within @Richard Foltys' criteria. As Nick mentioned, Airdna would be helpful here.

[Nick Belsky]

Quote from @Mike Lambert:

@Nick Belsky

I'm not sure why you're generalizing the mortgage conditions in Belize to the rest of the area because they're very different. I've been investing on the area for years and I haven't seen that kind of conditions anywhere else. For example, in Mexico, you don't have to put minimum 40-60% down, interest rates are not in the 10's and you can get 20- to 30-year mortgages and you can't get any shorter actually and the right areas would fir within @Richard Foltys' criteria. As Nick mentioned, Airdna would be helpful here.

Mexico may be the exception.  Moxi offers very reasonable terms for Mexico, but they only lend in Mexico.  My example was to compare and contrast, in general, that you will not find similar terms to what you find for US properties.  Obviously, that does not apply to every single market on the Caribbean, but generally speaking, it does.

Cheers!

[Travis Timmons]

You have to do your own research and form an investment thesis. The days of following the crowd and making easy money are over. 

I think that we are in a "what can you do that is really hard?" real estate market right now.  One form of that is finding a specific niche subject matter expertise...something like an ice fishing cabin that those of us who don't know a thing about the category would never think of investing in. Or it could be something like dialing in on and area and figuring out exact requirements for parceling off additional lots - find an old house that nobody wants on 5-10 acres. Fix it up and parcel off the additional lots to either sell or build. 

Other ideas that have captured my attention are finding a 4 bed/1.5 bath house that has room to add a stand up shower to make it a proper 4/2. 

I'm spit balling a little, but you have a create a deal to get the outsized returns that STRs offered a few years ago.

[Mike Lambert]

Quote from @Nick Belsky:

Quote from @Mike Lambert:

@Nick Belsky

I'm not sure why you're generalizing the mortgage conditions in Belize to the rest of the area because they're very different. I've been investing on the area for years and I haven't seen that kind of conditions anywhere else. For example, in Mexico, you don't have to put minimum 40-60% down, interest rates are not in the 10's and you can get 20- to 30-year mortgages and you can't get any shorter actually and the right areas would fir within @Richard Foltys' criteria. As Nick mentioned, Airdna would be helpful here.

Mexico may be the exception.  Moxi offers very reasonable terms for Mexico, but they only lend in Mexico.  My example was to compare and contrast, in general, that you will not find similar terms to what you find for US properties.  Obviously, that does not apply to every single market on the Caribbean, but generally speaking, it does.

Cheers!

Nick, as you mentioned, Mexico's the best for that matter indeed. Pretty much all the banks in Mexico lending to foreigners offer better terms but there are other countries offering better terms as well. On the other hand, other countries, like Nicaragua for example, likely offer worse terms, if you can get a mortgage at all but I'm not sure anybody would want to buy an STR in those countries anyway.

[Natasha Rooney]

Quote from @Mike Lambert:

@Nick Belsky

I'm not sure why you're generalizing the mortgage conditions in Belize to the rest of the area because they're very different. I've been investing in the area for years (not in Belize) and I haven't seen the kind of conditions you're describing so maybe they just apply to Belize. For example, in Mexico, you can put less than 40-60% down, interest rates are in the single digits and you can get 20- to 30-year mortgages (and you can't get anything shorter actually) and the right areas would fit within @Richard Foltys' criteria. As Nick mentioned, Airdna would be helpful here.

 Hello! Just wanted to ask a question about this. Do you mean that you are able to get a mortgage within Mexico? Or are you meaning taking out some type of mortgage from Canada and applying it to a foreign property in Mexico? 

[Mike Lambert]

Hi @Natasha Rooney, you can do either or.

[Greg Parker]

Consider Dauphin Island, Alabama. Reasonable prices, lots of room for STR growth. And, Alabama has the second lowest propertey taxes in the nation behind Hawaii.