Duplex Strategy Question
Newbie here and hoping to make my first investment property a duplex. Would it makes sense to use one unit for LTR and the other for STR? My thought process is an LTR could offer more stable/ consistent cash flow and just seems less risky. While an STR could bring in more money, it may be less consistent or even seasonal maybe? Because this would be my first property, I don't think I'll have enough cash to fully furnish both units for an STR approach, so it's either one unit or just pursue LTR's for both units. Thoughts on this strategy?
For reference, I'm looking at Lubbock Texas and hoping an STR would appeal to travel nurses, or visitors to Texas Tech.
@Breann Acuna, I can't speak on behalf of the Lubbock, TX market, but to my understanding, the consensus for duplex STRs is they don't perform that well. Furthermore, what are lease comps indicating? I would do a quick search on STR platforms such as Airbnb and VRBO to gauge what style of home is attracting tenants. All this being said, if you're sourcing for traveling nurses, a large part of your investment strategy will be dependent on location since the subject property will have to be within proximity of a hospital. Hope this all makes sense and helps!
@Michael Dumler Got it, thank you!
Quote from @Breann Acuna:
Newbie here and hoping to make my first investment property a duplex. Would it makes sense to use one unit for LTR and the other for STR? My thought process is an LTR could offer more stable/ consistent cash flow and just seems less risky. While an STR could bring in more money, it may be less consistent or even seasonal maybe? Because this would be my first property, I don't think I'll have enough cash to fully furnish both units for an STR approach, so it's either one unit or just pursue LTR's for both units. Thoughts on this strategy?
For reference, I'm looking at Lubbock Texas and hoping an STR would appeal to travel nurses, or visitors to Texas Tech.
Hey Breann!
I actually am an agent here in the Lubbock area, and also own a property management company, and manage short term rentals. It really depends on the location, I have a duplex that is a LTR on one side, and a STR on the other, and it does well. It is in a good spot of town, and was completely remodeled. West Texas was one of the top STR markets this past year for bookings, so it does pretty well. The STR market is more volatile than LTR, some months may be great and some may be empty. Something to consider as far as your risk tolerance!
@Breann Acuna
I would say it depends on your level of risk and the location of the STR. Either would do great here and maybe an option is to have both sides be LTR and then switch one side over to STR once you have enough cahsflow. Lubbock is a great place and I love investing here.
Quote from @Breann Acuna:
Newbie here and hoping to make my first investment property a duplex. Would it makes sense to use one unit for LTR and the other for STR? My thought process is an LTR could offer more stable/ consistent cash flow and just seems less risky. While an STR could bring in more money, it may be less consistent or even seasonal maybe? Because this would be my first property, I don't think I'll have enough cash to fully furnish both units for an STR approach, so it's either one unit or just pursue LTR's for both units. Thoughts on this strategy?
For reference, I'm looking at Lubbock Texas and hoping an STR would appeal to travel nurses, or visitors to Texas Tech.
Quote from @Travis Turner:
Quote from @Breann Acuna:
Newbie here and hoping to make my first investment property a duplex. Would it makes sense to use one unit for LTR and the other for STR? My thought process is an LTR could offer more stable/ consistent cash flow and just seems less risky. While an STR could bring in more money, it may be less consistent or even seasonal maybe? Because this would be my first property, I don't think I'll have enough cash to fully furnish both units for an STR approach, so it's either one unit or just pursue LTR's for both units. Thoughts on this strategy?
For reference, I'm looking at Lubbock Texas and hoping an STR would appeal to travel nurses, or visitors to Texas Tech.
Hey Breann!
I actually am an agent here in the Lubbock area, and also own a property management company, and manage short term rentals. It really depends on the location, I have a duplex that is a LTR on one side, and a STR on the other, and it does well. It is in a good spot of town, and was completely remodeled. West Texas was one of the top STR markets this past year for bookings, so it does pretty well. The STR market is more volatile than LTR, some months may be great and some may be empty. Something to consider as far as your risk tolerance!
What is the predictable vacancy factor for STR in your area- 25%?
Quote from @Rob Chiang:
Quote from @Travis Turner:
Quote from @Breann Acuna:
Newbie here and hoping to make my first investment property a duplex. Would it makes sense to use one unit for LTR and the other for STR? My thought process is an LTR could offer more stable/ consistent cash flow and just seems less risky. While an STR could bring in more money, it may be less consistent or even seasonal maybe? Because this would be my first property, I don't think I'll have enough cash to fully furnish both units for an STR approach, so it's either one unit or just pursue LTR's for both units. Thoughts on this strategy?
For reference, I'm looking at Lubbock Texas and hoping an STR would appeal to travel nurses, or visitors to Texas Tech.
Hey Breann!
I actually am an agent here in the Lubbock area, and also own a property management company, and manage short term rentals. It really depends on the location, I have a duplex that is a LTR on one side, and a STR on the other, and it does well. It is in a good spot of town, and was completely remodeled. West Texas was one of the top STR markets this past year for bookings, so it does pretty well. The STR market is more volatile than LTR, some months may be great and some may be empty. Something to consider as far as your risk tolerance!
What is the predictable vacancy factor for STR in your area- 25%?
Pretty hard to “Predict” but average on good properties is 60-70% occupancy of available days. So I’d say 30% probably.
@Travis Turner Awesome to hear! I'm planning a visit out there next week and have been looking at options close to hospitals and tech. I really like what I've been seeing in terms of growth for this area and excited to come visit. Thanks so much for the information!
Quote from @Breann Acuna:
@Travis Turner Awesome to hear! I'm planning a visit out there next week and have been looking at options close to hospitals and tech. I really like what I've been seeing in terms of growth for this area and excited to come visit. Thanks so much for the information!
Feel free to reach out, would love to do whatever I can to help in the process!
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If STR is killing it you should convert both to STR. I don't see the STR appeal for Lubbock but you should run the numbers and see
@Eliott Elias Absolutely, thanks!
Quote from @Breann Acuna:
@Travis Turner Awesome to hear! I'm planning a visit out there next week and have been looking at options close to hospitals and tech. I really like what I've been seeing in terms of growth for this area and excited to come visit. Thanks so much for the information!
Just curious, how did you decide on the Lubbock market? Also, have you completed your visit yet?
You should investing according to your strategy and goals. Did you want to or intend to manage short or medium term rentals? They are different than long term rentals.
Meanwhile, you should invest the property according to its "best use."
Also, as part of your strategy, remember if you are going to scale, your financing approach may differ since the two different types of income will be considered differently by lenders...
Good luck.
@Suzanne Johnston I have a girlfriend who just bought here and told me about her experience. It got me super interested and started to research the area myself. I have visited and really liked what I saw!
@David M. Thanks so much!
It’s becoming hugely popular with out of town and out of state investors the last few years and it just makes me curious. Hope you find something!