The Nashville STR market has exploded since the first of the year. The inventory that we had last year is quickly being bought up and all my clients that I've sold STRs to and my other local STR contacts are all reporting full calendars and are already looking at numbers similar to pre-COVID. Can't build them fast enough here. Nashville is as busy now as it's ever been downtown and as much as we've grown the last 10 year, the future growth is projected to be even greater.
Local regulations are a headwind to future STR Investors in high demand markets. Investors and operators will need to be "surgical" in their approach to finding STR properties. The demand is STRONG from travelers, but finding the right STR property that you can also legally permit is tricky. Do your research up front... know the STR permit process in the market, the master deed restrictions and the HOA/COA rules. We have 3 STR's in Asheville, Nashville, and Louisville. Each market presented unique challenges, but we now have 3 thriving and legal investment STR's.
@Lisa Stewart Eriks great point and you're absolutely right! I field questions every week from investors about the regulations for STRs and guidelines in Nashville and The Smokies. I maintain a list of available developments and properties for the Nashville market that qualify for NOO STR that I share with clients.
I see that millennials perfer STR to hotels when they travel both for the convenience and space. Besides government crackdowns on them I see no reason why STR won't remain profitable for the foreseeable future.
We recently purchased an RV Trailer as a STR. Listed on Airbnb, Outdoorsy and RV Share. This has been surprisingly profitable. This would be something to consider as a first time investor looking to increase cash reserves with minimal upfront capital.
Bought brand new with 7 year warranty:
Purchase Price: $33k
Down payment: $3k (tax and license)
Monthly payment: $265 + $45 insurance
Per night rental: $300
Average monthly income: $2.5k-$4k
Depending on the area and amount of campsites available in your immediate vicinity this could be an alternative option for (first time) investors looking to add cash flow for future ventures.
Just a different prospective or opinion other that buying property.
This topic is more about the sharing economy in general. The amount of wealth created is nothing short of amazing! I run an Airbnb in Houston by converting a small portion of my house to a private suite. This was a substitute for downsizing. It completely pays for my home while taking up a fraction of the square footage. The space is, however, available as needed for parties, family guests, etc. whenever we need it, we just block it out on the calendar.
The same is happening with cars, ride sharing, etc. Adoption of technology is allowing for underutilized assets including cars and living spaces to be more fully utilized in a completely flexible way - this is true synergistic wealth creation. The returns are incalculable. However, the value proposition is perhaps there but the returns are more normal when real estate is purchased for the sole purpose of short term rental.
During the pandemic, our unit in Houston was fully rented and guests included many local families and couples just needing a getaway from their apartments. Now that travel is opening up, rates are up but they still remained rather firm all during 2020 for the reasons mentioned.
People moving away from big cities, collecting money from the government and being cooped up in their house for a whole year is BOOSTING the short term rental industry. My short term rental saw a 68% increase in bookings since last year. The wave is here and STRs are riding on top.
@Kaylee Walterbach Coastal Beach towns and inner state destinations showed their resiliency through the pandemic while airports and airplanes continue to make headlines for all the wrong reasons, further endorsing ground travel is a great alternative. Long Beach, Chelan, and Leavenworth here in Washington State are great examples of towns nobody has ever heard of cash flowing very well for STR owner/operators with linear growth ahead.
Great read here.
The demand for STRs will continue in many markets for several reasons.
The future of STRs is bright in Pleasant View, TN. This small, rural town, just outside of Nashville, is the perfect pandemic getaway (and still close enough to all the fun in the city). I expect STRs that lie on the outskirts of urban areas to thrive.
Hotel companies will start buying STR portfolios and market them along with hotel rooms ala "MarriottBNB.com"
The pandemic placed a positive spotlight on the STR market. Combine that with pent up demand, the rollout of the vaccine, conventions coming back and theme park openings, the Orlando market will remain very strong for years to come.
Parents bought their first STR in Branson(3 hrs from KC). So far for this month they are booked 22 days with next month stacking up. STR market is strong
The biggest hurdle to STR is a housing shortage for LTR in the area. Other than the zoning regulations, the sky's the limit in terms of demand. STR are often mom and pop enterprise at it's finest.
There isn't much of a future in Nashville outside of commercial zoning. Massive restrictions from local government has made it near impossible to run STRs in residential neighborhoods.
STR's will continue to evolve. I believe townhomes will prosper compared to condos/apartments. Young families will pay more for high end finishes and tech friendly spaces compared to our parents generation that were willing to sacrifice premium hotels or home rentals to save money on the family vacation.
All the stars have aligned to create an incredibly bright future for the short term rental industry: a revolution in working anywhere you want, a world filled with people ready to travel again, and a new wave of young consumers with disposable incomes that value experiences over material.
It’s the way of the future! It seems as though commercial and corporate hotels are out of style. People appreciate the true local living experience as a nomad or with loved ones at much less of a cost.
Miami, FL has had challenges in the STR market as municipalities come to terms with it. Yet this has not stopped the force of the airbnb wave. As travel surges tourists will flock desirable cities and I am lucky to be part of one that tourists turn into part time residents.
Large university in a small town! One very large employer with others on the way. I think the future is good for my area! I'm actively trying to grow my holdings.
San Antonio's STR market will continue to grow, but competition will become much fiercer. Some amazing properties have already been converted to vacation rentals, and some of us have even started to purpose build STRs. The next generation of properties will put much of the current stock to shame.
I believe this Summer will be the best yet especially for non-metropolitan areas within driving range of larger cities. With one rental in Portland, ME we are expecting a 20% increase based on current bookings.
Not enough on the market. Higher costs due to sanitation requirements. Local gov’t crackdown on all short-term rentals.
Employers have learned how much can be accomplished working remotely. As a result, in the post-COVID world companies will need to adapt to continue to attract talent. The WFH Friday/Monday trend will continue to expand bringing higher demands to STRs. Comfortable workspaces are a great amenity to provide.
On a different perspective... Many people are afraid of increasing regulations. Savvy investors can see past the regulation to find amazing opportunities with limited competition thanks to those regulations. Napa, CA and South Lake Tahoe, CA are 2 great examples.
@Kaylee Walterbach Depends on the local government, but overall, STRs are going to do well. Here in Austin, you can only get STR licenses if it's for a owner occupied property. The grandfathered licenses will expire in 2022. It will be interesting to see how this all panes out!