All Forum Posts by: Nick Peterson

Hey there, 

With RE prices across seemingly the whole country still going up and up, it's become harder to find affordable STR units with solid returns. From CA to FL to GA to TX to Smokies, etc, we've seen ATH prices. Which leads me to the Great Lakes areas.

There seem like many great, affordable STR markets in the Great Lakes region. Obviously the returns will be less than a highly competitive market like Joshua Tree, Smokies, etc. But the GL area offers affordable options and seem like a lower risk hedge against crazy prices elsewhere.

I have two questions for those who are familiar with Great Lakes STR Markets:
1. Which markets do you see as the best going into Spring/Summer 2022? I've looked from Two Harbors, MN to Michigan City, IN to Traverse City, MI. There are so many options that I've got some Analysis Paralysis. I'd like to be close to a lake and preferably within 2-3 hours of a large city (Chicago, Detroit, Milwaukee, MLPS). Other than that, totally open.

2. How sharp is the seasonal drop-off? Most occupancy forecasts I've ran are ~60-70% annual occupancy which is still pretty great. However, I want to be aware of that aspect of these markets.

Thank you in advance!

@Scott Urbas you are spot on about the STR permit. While the city seems very friendly towards STRs in general, I've heard from a few people recently that it took 6+ weeks. When you add in construction loan, build permitting build, actual construction time and then the STR permit, 18-24 months seems more realistic.

Still could pencil out! Just a longer timeframe.

Wow, thank you so much for the thoughtful and thorough responses, Nicole and Chris. This was my first ever BP forum post and it's wonderful to get the positive responses. 

Nicole, congrats on the escrow in Yucca Valley. Would love to hear how that project goes for you down the road. Is the plan to make it an STR?

Chris, glad to hear you feel optimistic on the 29 Palms area as well. I think the 29 JTree entrance is a huge factor as well. Good to know the City is behind STRs for the foreseeable future.

Hello,

For the past 6-8 months, I have been researching and monitoring raw land for sale in the Joshua Tree/Twentynine Palms area to construct a stick-built home as an eventual STR. The area has obviously seen incredible returns for existing STRs over the past five years. Using OTA STR reports (Airdna, etc) and looking at current nightly and occupancy rates, this still seems like a sound investment market.

For those who have STRs in the area or have considered it, what are your thoughts on getting into this STR market in Fall 2021 and looking forward? Any major concerns, tips or thoughts you could share for a newbie?

A few relevant details:
--The City of Twentynine Palms still seems welcoming to STRs as long as you register, follow ordinances and pay your transient guest taxes. They've met a few times this summer to clarify rules, none of which seem to be game changers.
--Lots I'm looking at have water and power at the street. The city's water district has quoted me around $8200 for installing a water meter. SCE power to the home could be around $8-12k. My realtor quoted the average septic system at $5-6k.
--Even with Covid, Joshua Tree National park had 2.4m visitors in 2020. 2019 had 2.988m and 2018 had 2.94m visitors. STR supersaturation does not seem to be a concern given annual visitors vs existing lodging.

Thanks!