All Forum Posts by: Serena Liao

@Kaylyn Geiger, I have owned 2 vacation rentals for about 5 or 6 years.  My first year with one rental I didn't make enough to pay for utilities.  I started late in the season and kind of learned as I went, a year later I added a second house and started in early spring and made about $100 less than if I had rented it out regularly.  The third year I went to multiple platforms and really tricked out the house and started reading heavily about STRs.  I also rented out to traveling nurses for 90 day periods during the off season, and had a ton of repeat business.  I made close to 3X what regular rent would be my third year.  A lot of things happened.  First I figured out how to do things better.  Next my marketing really made a massive difference.  I only used VRBO the first 2 years, but added AIR BnB the third year, and had a much better idea on prices.  Finally I dialed in who was using my property.  I realized that about half of the folks coming were here to fish in our river, and about 30% were traveling to Yellowstone Park or other national parks, and the rest were just travelers who like houses better than Motel rooms.  I actually found that I had different demographics in each house despite it being being a duplex with about similar square footage.  Fishermen and travelers rented toe Cozy side, and tourists rented the Bunkhouse side that was really tricked, with some fishermen and regular travelers.  My fancy side books at least 10% more bookings than the plain side despite being about $20 more per night.  We also went from about 12 STRs in my town to about 60 STRs, and my houses are making more than they ever did.  I added 2 more STRs in June, and plan to a luxury one any day.

What I am getting at is that 10 years ago I didn't know what a vacation rental was.  Five years ago I ran one but very poorly, now I am making triple what I made then.  Learning to run your business well is almost as important as the concept.  During peak season I gross about $3K or $3.5K from a place that would have rented for maybe $500 a month when I started.  Now I could rent the same place for maybe $700 or maybe $750 per month.  Houses are selling massively higher amounts, so my most recent rental is a converted office building with a shop in the back.  Just like good markets and bad markets learning to invest intelligently is a huge part of the issue.  Recession or not learn and adapt you should be OK.  Learning what the demographics were was very eye opening to me and made a massive difference.

Good luck with whatever you decide.

I'll provide a different viewpoint. We are not seeing a typical recession, and post-COVID success in the STR industry is not evidence that vacation rentals are recession-proof. On the contrary, demand is higher than ever because the vacations stopped for a year.

STRs are the new HGTV flip. Everyone is doing them. I see more posts on BP about STRs than any other investment type. This feels like way more of a peak than normal market operation.

I still think STRs are a very valid investment. I don't believe they'll go away and there will always be demand. Question is how much demand and whether it will be enough to support the entire market.

I worry for a lot of people who bought properties as STRs more recently. Most of the time, the prices paid for those STRs are higher and an LTR wouldn't be able to make enough money to justify the price. Any sort of dip in demand could really hurt people with tighter margins and no legitimate backup plan.

I can't see the future, though, so what do I know?