Was it a mistake to create an STR a block away from railroad tracks?!

[Melanie Hall]

Investment Info:

Single-family residence buy & hold investment in Olathe.

Purchase price: $101,000

This very small home is the 2nd one purchased specifically for use as an STR. It was the size and price we were looking for, but it was literally a block from the railroad tracks so we didn't know if we were crazy for going for it.

What made you interested in investing in this type of deal?

Our first full-time STR was a small home in a residential area and it did really well. It was in the next town over so we wanted to buy one in our specific city.

How did you find this deal and how did you negotiate it?

Had our eyes open specifically for a small, low-priced home.

How did you finance this deal?

Refinanced 1st STR to put money down on a conventional loan.

How did you add value to the deal?

Sweat equity. The inside of the home was solid and there were newer floors installed. The ceilings are short so the paint and upper cabinets accentuated this and made the space feel more cramped than it had to feel. Deep clean, bright white paint, ripped off upper cabinets, bought a smaller fridge, and kept the space minimalistic when decorating. Changed out some fixtures to make the space more modern/up-to-date. The yard was in need of a lot of work and we did most of that ourselves as well.

What was the outcome?

After posting the home on Airbnb/VRBO (and making sure we were transparent about the trains/neighborhood & low ceilings) we were pleasantly surprised that people didn't mind! They liked having an entire home with a big yard for their dogs. Thankfully our city has laws around the speeds of the trains and them not being able to blow their whistles. This keeps the noise to a minimum. The booking rates are great and our nightly average has surpassed our expectations for our area.

Lessons learned? Challenges?

The lesson learned was not to write off a home as a potential STR because of things that might scare away a certain subset of guests. I've found that the warning that there are trains going buy multiple times a day and a few at night has resulted in the guests that do book this place being SO nice and easy going.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I'm getting ready to finalize my real estate license in KS & MO so I recommend myself! :)