@Jimmy Johnson I would strongly advise you to throw out CAP rate, and compare these in a STR-specific spreadsheet to help show cash-on-cash return. 

Then, the appraisal comes back $20,000 or $30,000 (or even more) lower than expected according to what the sales comparables show?

Hello All,My wife and I have an offer accepted on a property that we will be using as an STR/Vacation Rental.The area we are investing in is an up and coming vacation rental market compared to most ski/mountain towns in the West. 

I have to refinance my house for a different reason so I’m going to have to compare loans and look at getting cash out of it since I have a lot of equity in it.

Theres so much easy money to be made here compared to other cheaper markets.

Neighborhood is not finished being built out and other comparable neighborhoods by the same subdivision name go for $1M-$2.5M.

We don’t know any PMCs to recommend in the area mentioned, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processesWe recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

First, prices compared to income levels recently hit an all-time high.

I personally invest with Rent to Retirement and have been extremely happy with the results. https://renttoretirement.com  Find a market you like and then compare the type of properties and deals turnkey companies provide in those markets.

@Morgan Painter  To answer your question, the first step would be to review the income and expenses to determine the NOI, and compare the asking price to the market capitalization rate for the area.