BRAND New to REI: Short-Term Rental Advice Starting Out?

Question

Hey Bigger Pockets Community!

My wife and I are highly interested in Real Estate as a new stream of income and would love to purchase our first rental property in 2022! We purchased our first home in August of 2020 (single family, we live in it), and are fascinated by the real estate market for several reasons. Mainly, we'd love to move money out of our brokerage account into Real Estate to help generate passive income, allowing us to retire early if possible. We are both incredibly passionate about the F.I.R.E. movement - and know that many successful early retirees use real estate to help get them there!

Here is our plan as of now - invest in a short-term rental by Summer of 2022 in / near the mountains (we live in Charlotte, so we are leaning towards Lake Lure area or Blue Ridge areas if possible). We are also open to other areas, as we plan to utilize a property manager to handle the day-to-day elements of the home.

We currently have $80K saved, and can probably get to about $135K by May of 2022 through various income streams. We are currently planning to put down 20-25% on the home, and are planning to purchase a home up to $500K if the cash flow makes sense financially. We have about 26% equity in our current home, so I am not confident we have the ability to potentially refinance our current home to withdraw money towards a real estate investment.

I'm an open book to any questions you may have - we'd love any advice on getting started! We joined Bigger Pockets so that we can begin to network and learn more about what has made so many successful in real estate!

Nathan Gesner · Answer

Welcome! There is a forum dedicated to Short-term and Vacation rentals. Click on "Browse Forums" then "Real Estate Strategies" and you'll find it. Tons of information and people knowledgeable in that field.

I own one vacation home and it does great. In five months we net almost double what we would renting it out long-term for the entire year, and that's after paying someone to manage it.

Check out The Short Term Shop with Avery Carl on YouTube. She's also had a couple podcasts on BP. Her husband, Luke, is pretty active on the short-term forum.

Billy-Dee Greenwood · Answer

Welcome Taylor!

I close on a property in Lake Lure next month. I plan on using it as an STR when I'm not enjoying the mountain views. I'm extremely excited about the opportunity to join the Lake Lure STR community. I've done extensive research on the area and I'm at the beginning stages of putting a team/process in place. Feel free to reach out with any questions. Sounds like you have a solid plan in place and will crush it in 2022. Best of luck!

Joseph Bafia · Answer

Sounds like you're looking to venture into my area!  I live in Raleigh but invest in STRs in Western NC (Mars Hill & Burnsville) .  As others have said, read the forums for info and education, but find others in the area and begin networking.  Some great people out west.  Happy to connect and give you my thoughts.

Mitch Davidson · Answer

Hi @Taylor Celestin. I'm happy to discuss our various markets over here sometime if you like. Lake Lure on my list for a next STR location. Lakeside can be pretty seasonal. You can't go wrong though. You'll make some serious annual cashflow if you manage it well. Perhaps hit up Mike Szabo as well. He's on BP. He has a couple homes in Lake Lure that perform really well. Might be a good contact for you as well, @Billy-Dee Greenwood.

Ryan Thomson · Answer

@Taylor Celestin sounds like a plan man. I read "optimize your bnb" and it really gave a lot of great ideas that save me HOURS of work each month. I probably manage my 3 airbnbs in 4-6 hours a month (max).

Taylor Celestin · Answer

Good to know! Starting out, we are open to all options regarding how to manage our future STR! I know starting out we will both be working full time careers, and likely be 2+ hours away from the location ourselves but also understand the costs associated with hiring a property management company. Thanks for the advice - we will be sure to look into the option of having us manage the property ourselves!

Taylor Celestin · Answer

Hey Ryan - thanks for the advice! My wife loves the mountains (ideal for both our STR goals and her passions) and she loves the Colorado area. We currently live in Charlotte, and I think (for now) we are going to try to purchase our first STR closer to home. I'm also not willing to eliminate any options if the money makes sense! Thanks for connecting!

Brandt Fanion · Answer

@Taylor Celestin with so many great automation tools available, you may find that hiring a property management company is unnecessary. In fact, managing  STR properties yourself could result in a significant increase to your CoC. Most property management companies charge anywhere between 10-35% of your gross revenue.

Taylor Celestin · Answer

@Mitch Davidson

We love many cities near Asheville for several reasons, Lake Lure has always been one of our favorites. Although it is heavy seasonal, I do believe we could do well in a short term market up there! I look forward to connecting - thanks for the advice!

Taylor Celestin · Answer

@Billy-Dee Greenwood

Happy to hear you’re closing on a property in the area! We love the area for several reasons, and based on my early math (although seasonal) it checks out to cash flow positively. I look forward to connecting! Black Mountain is another area we love (though more expensive) and Swannanoa is another town we are interested in. Keep in touch!

BRAND New to REI: Short-Term Rental Advice Starting Out?

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