How to pick short term rental market?

Question

Very interested in short term rentals/ air bnb! How did you decide what markets are good or not? Tip and personal experiences appreciated!

Jimmy Woodard · Answer

Everything @Joshua Strickland said, and I'd add the following question: "Are regulations favorable for non-owner occupied STRs?" If they're not, the other questions all become irrelevant.

Joshua Strickland · Answer

1. Where do you like to vacation?

2. Do the numbers make sense?

3. Can I afford the area plus have comfortable reserves.

4. Buy it

Clay Boykin · Answer

@Julio Chacon Jr STR's are by far my favorite strategy to scale. Everyone does flipping and long term rentals. Yes those are great exit's to scale but I find I can be more creative and unique when it comes to STR's. Every market has Pros/Cons. As far as Columbus Ohio goes, it is scalable due to the growth going on right now with Intel coming in, Nationwide Children's, and obviously campus. Super good strategy but for me I like to stay near Jacksonville, FL or even St. Louis, Missouri due to tourism. Outsourcing your management is also a nice little trick when looking to scale your STR portfolio. Happy Investing!

Mike Shemp · Answer

@Julio Chacon Jr

We choose vacation markets, and then pick the areas that we like to personally vacation at ourselves to take advantage of function stacking.  Function stacking is a term I'm borrowing from the permaculture world where it means one thing can serve multiple purposes.

This way while we are visiting the area, learning which neighborhoods we like, don't like, doing research, etc. we are also spending time in a place we genuinely want to spend time in anyway.   Then if we do end up buying in this market, when we visit these homes to do maintenace in the future, we are again spending time in a place we genuinely like to visit.   And for the worst case if we decide not to buy in that market, we also spent time in a place we enjoyed anyway PLUS you would have gained some experience when interacting with locals, realtors, and other folks which will set you up for your next market you are interested in.

Hope that helps.

Mike

Kimberly Sutor · Answer

I’m just starting to look at St Louis for STR, but am finding downtown properties (I was especially interested in a loft unit) are not STR-friendly…unless you own the entire building. We live about 3 hrs NE in IL, and know STL to be a very popular destination for families, Cardinal fans, etc. I personally prefer Chicago, as I lived in the Burbs up there for over 15 years, but I’m learning to like St Louis, too….plus it’s a great spot for us to meet up with friends who recently moved 4 hrs south of us. I figure I might as well begin investing in an area I want to spend time in myself, right?

Brandon Carlson · Answer

@Clay Boykin I have been researching STR in St. Louis. I have heard mixed reviews, but as you know, with anything new, people are biased.

What areas are you bullish on?

Thanks

John Underwood · Answer

As others have said, someplace you like to vacation.

For me I started with a nearby lake house that is also close to a major university.  That way I have multiple reasons for people to visit the area.

Great locations:

On water, ocean, lake, river

In the mountains

Close to amusement parks such as Disney.

These are just some of many locations that people frequent with their family for a vacation.

Joshua Janus · Answer

In my market of Columbus, Ohio, the areas that do the best are close to downtown, the Ohio State University and High Street which is where the majority of the retail shopping and dining are. It is a good idea to target tenants that are young professionals, traveling nurses, traveling business people and various other professions.

Jonathan Klemm · Answer

@Julio Chacon Jr - So far we are just working close to home in Chicago.  I think you can be successful in any market if you build the right team.  With Airbnb a solid cleaner that will do all linens is most important!

We are under contract now for another AirBnB in Chicago.  We specifically look for buildings that have HOAs that allow AirBnBs because not many do.

How to pick short term rental market?

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