All Forum Posts by: Adam Gonzalez

Listen to recent BP podcast 604 - best 45 minutes you can spend today!

https://www.biggerpockets.com/...

Don't go off of feel and hearsay...look at stats and data. The link below shows recreation visits at national parks going back to 1979. I own a short term rental near Acadia National Park, and the April visitation number this year was 105k, last year was 110k. While that is down - only slightly though - there has never been an April going back to 1979 that saw over 100k visitors to the park. Visitation numbers are STRONG! The same goes for many other parks, but look it up. 

As for a recession, yeah, sure there are some issues. Inflation and consumer sentiment are not great. Look at wages/employment and consumer spending and behavior though. Luxury good spending is up 8% year over year, credit card debt is down over 1/3, savings rates are still very healthy - down 2% in the last six months but still historically very high, home equity has gone up something like 10 trillion dollars nationally in the last year. Wages and employment are rock solid. There are 6 million unemployed Americans (that participate in the labor force) and 12 million current job openings. Until wages and employment weaken, the consumer is very well prepared to weather a recession. All information above is available on bea.gov by the way.

Of course, you have to know how to properly analyze a property and purchase wisely, but the stats and data absolutely still show that this year will be a good year for domestic travel. 

https://irma.nps.gov/STATS/

Like most said before, it's never a bad time to buy. Inflation is my biggest concern. Our hard-earned dollars are becoming less valuable every day.

I think STR investments will need to start becoming a more strategic play with more coming online and unsteady market conditions. By this, I mean looking elsewhere than the booming vacation markets and offering something more unique than the rest of the stays in the area you reside.

I own STRs in a non-vacation market. They are close to nice attractions (a Zoo, and a small Italian-rooted village). While they aren't grossing $100k+ a year, the buy-in is considerably less. Is it riskier? Maybe, but if I can get a 20%+ cash-on-cash return per year on average, the location seems to work itself out. Proper analysis is key. 

@Adam Gonzalez One thing people forget in a recession is a percentage of people change their plans, say 20%. If you are in the top 5% of rentals in an area, very rarely do you feel a great pain. It’s the bottom half of rentals that really suffer. Be the best, offer a great experience, get great reviews and you will insulate your self from the downturns.

Good luck what ever you decide.

You can always find a reason not to jump in. 

As Buce said, you need to buy the right property in the right location. You should always have some cash reserves too.

There is never a bad time to buy the right property. All this means is you must become very selective when choosing this first property, as you will not have as much room for error.

Regarding travel plans, it may be true that people will travel less during a recession....but it may also mean that people will just travel closer to home instead of going across the country (or world). During Covid - which was more restrictive than a recession - we found no drop-off in guests at all. I actually think it made people more desperate to get away and travel outside their home area.

Of course, with any STR, location is critical. It will become even more critical with a recession looming....