I'm getting started in buy and hold here in Durham, NC. Starting off with an SFH. I'm planning on purchasing a property that I can use for Airbnb rentals since the market is pretty good here. I want to have a fall back though. If Airbnb rentals don't pan out for some reason I'm going to switch to long-term rentals.
What has been your strategy for identifying areas that are ideal for long-term rentals? Do those conflict with Airbnb rentals?
The first thing to look at is the cities laws regarding STR. Some cities require permitting, some cities are just outright against it, and some cities are really friendly to it. I personally live my life by the famous quote "its easier to ask for forgiveness than permission" so outside of the laws look at an areas economy, sports venues, college towns, etc. You really just want a city with a lot of traffic year around. Austin, TX, DFW, TX, Denver, CO, Columbus, OH, etc. Areas with a booming economy are also good for long term corporate rentals which gets you the Airbnb money with less work.
@Steve Fitzgerald Rented.com put out a pretty good article on STR investment cities, it even has an interactive map. At no surprise, the top cities to invest in are the hottest vacation destinations that have the lowest home prices. @Myka Artis hit the nail on the head with the recommendation to look up laws. This will be more important than ROI when selecting a city. Also beware of the "primary residence rule" that plagues many urban markets barring investors from snatching up STR investment properties. As always, there are loopholes, but I would select a vacation market with as little restriction as possible.
@Tyler Work That list is legit! I got STR's in 5 of the cities in that article. Austin & Denver have strict laws but it's easier to ask for forgiveness than to ask for permission.
@Steve Fitzgerald - I've got an AirBnb in Denver. I do it legally because I actually live in the unit that I AirBnb.
In the busy months (i.e. summer) it generates me more than double what i would get for renting it year round. In the Winter months, it gets me about ~$100 or so less than I would typically get. Over the course of the year, it's definitely worth it for me.
Note that I will typically do the cleaning myself unless I am out of town.
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