All Forum Posts by: Josh Brost

From what I am seeing. Premier properties are excelling and doing better than expected, average properties are suffering massively. In our markets RevPAR is way down in one and steady in the other 2. In the markets where it's down, it comes down to whether your property fits what the ideal customer is looking for from a lot size, home size, amenities, and price. 

It all depends upon how you bought the deal. I always UW a deal so that it works as a LTR but then I can have options with MTR/STR in that market. I built our own internal PM for all rentals and we don't use 3rd party companies.

Tahoe for me right now = amazing STRs with huge cash flow and appreciation (1-2 bedroom units / close to ski resorts but not high-end luxury properties) 

Florida for me right now = pretty decent STR with cash flow that covers the bills but not a lot more + appreciation which is pretty significant. I bought in FL for appreciation and to break even at minimum as I didn't want to realize any add'l income in those properties annually but wanted appreciation and tax benefits. (2 bedroom units / close to the beach not not high-end luxury properties)

Ohio for me right now = STR rents at 1.5-3x LTR rents, budget travelers & work travelers that are much more demanding. They create great cash flow but the annoyance factor is higher so since LTRs still cash flow we are cutting the Ohio STRs in half to reduce the time spent on management. (2 bedroom units close to downtown - not high end)

STRs still definitely work. You just need to figure out your specific goals and management and build your portfolio from there. 

STRs are great but you're running a business with them. We personally buy multi-family and put at least 1 STR in the building or 1 per every 4 units. That gives us constant eyes on the property and it allows up to keep LTR rents a little lower than market. We also give our LTR tenants other rent discounts like taking the trash to the curb on trash day for the STR units so that everyone is incentivized to help the STRs perform well.

We have STRs in Tahoe, Reno, Columbus, and several in SWFL. I typically like the smaller studio / 2 bed units for STR to avoid parties but I do have a luxury rental in SWFL with all the amenities for a baller stay.

I built out our own in house systems and processes, we've automated a ton of the work, have an electrician and handyman who specialize in plumbing for each market with a primary and 1-2 backup cleaners. We manage everything 100% remote and it works in all markets. 

my two long time STRs have historically performed well.  in 2019 they had around 95% occupancy and had huge positive cash flow. 

On my long time STR, occupancy (70%) and income is down. It would have cash flow if self managed but it is not. It has negative cash flow.

My long time STR that was converted to MTR due to not getting an STR permit has good occupancy (90%) but the rates are terrible due to nearly 200 furnished rentals in the little community being converted to MTR at the same time (I rented NTR at lower rate than I could have gotten for an unfurnished LTR). It probably would have negative cash flow even if self managed, but I expect at next mid term tenant the rent rate will increase.

The 2 new STRs both are negative cash flow.  One is negative by enough that it would be negative even if self managed.  The other would have small positive cash flow if self managed but is negative with the PM fees.  

I have rentals that can carry these indefinitely. On the 2 long time STRs, we have made enough over the years (income in 2019 was over 1/3 the purchase price) that having an off year is not an issue. The two new STRs we may have to determine if the location is STR appropriate. We know we would have done better having the units as LTRs, but we like having the STRs.

Each unit appreciated far more than than their negative cash flow (two units appreciated ~$80k each and two units appreciated ~$120k each).  I am fortunate to be in a position that negative cash flow is just an inconvenience. If I were a new struggling RE investor I would be concerned even with the appreciation as the future may not have the same appreciation and cash flow pays the bills when starting out.  

My sentiment is mixed.  The numbers for 2023 are poor, but 1) I am optimistic will improve 2) I have already done great with these purchases 3) the appreciation from market appreciation was good (this on top of the value add appreciation on the 2 new units).  

Looks just fine to me @Josh Brost. There are so many negative Nelly's out there preaching how terrible STRs are and the end is neigh, it is getting annoying.

The bottom line is you can do a STR just fine in the right area, at the right price with the right amenities.