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Updated almost 5 years ago, 02/16/2020
Finding Value via STRs - The Lighthouse
Investment Info:
Small multi-family (2-4 units) buy & hold investment.
Purchase price: $450,000
Cash invested: $10,000
First short term rental investment! Extremely unique house shaped like a lighthouse located two minutes walking to the beach and about seven to the train to Boston/Airport.
What made you interested in investing in this type of deal?
STRs have great value in a city like Boston as we have year-round demand for short term housing due to a diverse economy. This property is in a unique location that allows access to the city and airport while being just a short walk to Revere Beach. Hoping to capitalize on the demand for proximity to the city AND attract seasonal guests when the weather is warm.
How did you find this deal and how did you negotiate it?
Found on MLS and offered asking. Could have done a better job negotiating this, to be honest. Upon reflection, the property was on the market for quite some time so probably have room to negotiate a better price.
How did you finance this deal?
Traditional bank financing, 25% down.
How did you add value to the deal?
Repositioned property as a STR. Thoughtfully designed the space to appeal to beach-goers and city travellers alike.
What was the outcome?
Both units have only been active for a couple months, but current rents have already been more than long term rates and the winter months are the least busy in the area. Long term gross rent for property would be around $3,500/month and expecting at least $6,500/month with the STR model during peak demand.
Lessons learned? Challenges?
First property I didn't spend much time in before renting, so there were some kinks to be worked out with the first few guests which resulting in lower than ideal ratings. Worked out all the issues and am now churning out five star reviews, learned some lessons for the future! This is also the first property where I assembled a small team to help with cleaning, repairs, and snow removal.
Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?
I represented myself in this transaction as I am an agent. My portion of the commission enabled me to effectively cancel out the cost of furnishings!
- Tyler Munroe