Great thread and thanks all for sharing your cities' positions.
Agree with a lot of what's been said. Being nimble is key, and having a strategy in place in the event of adverse regulations is important.
on the front end:
1) figure out your risk tolerance. Are you OK operating in a city like Miami beach or NYC where it's illegal but you'll get higher returns but also face fines? If so, pick a good unit, have a great team in place to watch over it, and you should likely be nearby in case anything happens. If not, Colorodo Springs, Jersey City, North Charleston, ... Feel free to add others. Sounds like Chicago could be a middle ground. And then you have the 'permit cities': New Orleans, Nashville, Denver, Indianapolis seems to be going this way. I think I'll start a document keeping track of all of these cities and their regulations. PM if interested in helping out.
For example, I operate 6 in NYC and I can tell you, it's extremely profitable, but also extremely risky. I'm dealing with a Landlord right now who's trying to bully me and you have to have the stamina and resolve to hold your ground and know your rights. This is NOT for everyone and can be highly stressful. That said, I think i'll always have a least a few in NYC to funnel those cash flows into other legal markets. That's the strategy I'm going for right now.
2) Now you decide whether you want to buy or lease. What's your long-term goal? Own property or be nimble and generate high returns? I think many think that buying is the obvious choice, but leasing has its advantages if you can find an agreeable landlord. Just look at companies like Sonder, which is executing on this model incredibly well. Look and see how many positions they're hiring in 10 cities!
3) start scouring the market. Be bold and dont suffer analysis paralysis. Get into a unit and try it out. This stage should be about collecting data by looking at AirBNB (which should also figure into step 1), finding comparable properties, talking to people, forecasting occupancy rates and returns (I'm building a model to do this). read local regulations, go to the city and talk to people, knock on your neighbors door before buying... be bold, friendly, positive, and curious.
4) execute perfectly and keep great records and data.
5) repeat in same city, or try a new market and see how they compare.
Ideally, you would have set up a system and get people in place to manage your properties/ cleaning crews/ handymen and you just deal with the occasional emergency. That's the position i've gotten to, but I know there is a ton more to do....
I'm actually thinking of starting a boutique hotel chain around this concept, and have been pitching friends of mine and people on BP to see how they can join/ collaborate. This is a great time to be a STR entrepreneur, but to truly do it well, it requires a lot of different skillsets, tremendous amount of work, and a brilliant strategy that's executed perfectly.
Reach out if interested and Good Luck!
