STR vs LTR - Not Having Enough Rental Income to Pay the Mortgage

[Keith Winkelmann]

Hello BP! I am new to this adventure and want a STR in Galveston, preferably near the strand. My concern is that the home won't be able to pay for itself in the off season; non-summer months. I'll have to pay the difference out of my pocket. How do you guys tackle this?

Thank You

Keith

[Mick Hofmann]

In Seasonal markets it is best to have one yearly number that you pursue and run comps off of. For instance the STR would bring in 30k, and expenses would be 25k. By having one big number that you pursue it relieves pressure to try and get each month to the monthly number. Once you sit your big yearly number you can start taking profits or roll it into another one. Obviously setting aside money for capx is also important. That is what we do here in the phx STR market.