Anyone experienced with the Texas STR market?

[Lallu Tappu]

We are from the north Dallas area and have a number of LTRs. We’ve explored STRs before but never pulled the trigger. Over the past few weeks I’ve been looking into it a lot more seriously and have narrowed down a few markets around Texas. I’m looking into the Fredericksburg area for the year around tourism or cedar creek lake area for its proximity to Dallas. I also looked at Abilene though the hype seems temporary there. Anyone familiar with either of these areas or anything I missed that I should look at? I’m not sure how long this buyers market will last so trying to move relatively quickly. 

[Bruce Lynn]

You will of course have people tell you of their success stories, but there are plenty of nightmares too.

Murder of 3 people in one in Dallas last week. Human trafficking in some in Plano.

Remember Fredericksburg has very strict regulations, but seems to have a lot of activity and somewhat geared to STR market and probably has been for 10-20 years now. Maybe long before AirBnB was started.

https://www.nbcdfw.com/news/local/plano-short-term-rental-us...

Since you are more or less remote to all of the cities you mention, remember you will likely need good property management in place that is experienced with AirBnB and normally that costs a lot more than 10%. One thing I always suggest is to find 3-4-5 properties already on the STR platforms that you like and is similar to the one you want to buy. Then look at their booking calendar. See what rates they are asking and what their occupancy looks like. Then use that for your proforma. I used to go to some seminars and hear people bragging they're making $5000-$6000 a month and then look at their booking calendar and it looked like a ghost town. I never see those people any more. Often they would not provide the address in the seminar, but they would talk enough to be able to find it and sometimes they would show pictures. Now the booking calendar is only one snapshot in time, but I think can give you a general idea of bookings. Is every weekend booked, is it busy enough they have 3 night minimum stay, Do you see any weeklong bookings or is the calendar full or is it empty? Think about who you are trying to attract to your STR. Quiet couples, big families, families with kids, Bachelorette Parties with groups of 10-20? Sports teams? Do you want them in the back yard or not in the backyard? Do you want outdoor weddings, or everyone kept inside? or something entirely different? Do you want parents for college parent weekends? Do you want the liability of a pool? Talk to your insurance agent about that before you buy or build a pool? Do you know anyone that will feed your business like the HR director at a hospital or a transplant coordinator near a transplant hospital. Don't depend on just throwing it out there and see who shows up or depend on your PM to fill it up, chances are they won't do that.

I would not depend on anyone to FILL your occupancy.  So how much time do you want to spend marketing and filling every night yourself?
Good luck and best wishes.