Short term rental location which one to choose?

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Short term rental location which one to choose?

Sean Starkey
Rental Property Investor · Huntington Beach · Member since 2021 · 116 posts · 40 votes

I just got approved for a 180k HELOC and I am looking to start buying STRs. I currently live in orange county CA and am looking at the Smoky mountains and Joshua tree. How do I make the most out of my 180k? Which market do I start in? I also plan on managing them myself

Thanks!

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Peter MckernanBusiness Member
Residential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
4y

@Sean Starkey I do not know much about the smokey mountains; however, I have a good friend that does a lot of rentals in that area I could link you up with if you want me to. For the JT, Yucca Valley, and 29 Palms area it really depends on what you are looking for right now. The County of San Bernardino keeps toying with the idea of putting a cap for STRs over the whole county (for JT it would be a percentage). This came out within the last 3 weeks, and they have not made a full move on it, so be careful. Yucca Valley had/has a moratorium till April in the Yucca Valley Proper area. That being said there are some great options in these areas, JT is the highest priced $450K on up for something you could turn around and rent right away, 29 palms is about $250K+ to turn around and rent right away, and landers is about $400K+ to turn around and rent right away (this are all finished products, so if you want to buy a fixer to get in cheaper those numbers will be different). 

The best plan if you go JT or anywhere out there is day one of close of escrow submit for your permit (90 days it takes to get one in 29 Palms, 60 days in County Areas, same for Yucca Valley).

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  • Jason Kudo
    Real Estate Agent · Pasadena, CA · Member since 2017 · 276 posts · 255 votes
    4y
    Quote from @Jason Kudo:
    Quote from @Laura Kastner:

    A little help since we are talking deserts:

    Which is the better option:

    A turn key Desert Hot Springs or Indio home 4/2 on 7000 sq ft lot with a gorgeous concrete pool in a residential neighborhood

    or

    A comestic reno in Yucca Valley home 2/2 plus bonus room on 1/2 an acre with a nice backyard & an in ground vinyl* pool in a residential neighborhood?

    *converting vinyl to pebble tec is same as putting in a new pool…so, out.

    Also, YV costs 50K more.


     A little more clarity please? Better option for what?

    I'll take the cue from David's post below and assume we're talking about STRS. There are some nice Airbnbs in Desert Hot Springs clearing $10k+ a month so when you say turn key Desert Hot Springs, are we talking NICE? Indio is very HOA specific in terms of STR eligibility and with non-HOA, make sure to verify the eligibility with the city of Indio. Yucca Valley, depends on where this 2/2 with in-ground pool is located in Yucca Valley.

    1Reply
  • Benjamin AakerPro Member
    Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
    4y
    Since you will be self-managing, make sure it is only a few minute's drive from your residence. I have one 10 minutes away and it is a pain to have to go up there even though it is so close. The distance isn't so much the problem as is the mental hurdle each time.
    Nice work on the HELOC by the way. It is a vastly underutilized way to get money ready to go when you need it.
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  • Gerald Pitts
    Lender · Asheville NC · Member since 2016 · 470 posts · 317 votes
    4y
    Quote from @Benjamin Aaker:
    Since you will be self-managing, make sure it is only a few minute's drive from your residence. I have one 10 minutes away and it is a pain to have to go up there even though it is so close. The distance isn't so much the problem as is the mental hurdle each time.

    Nice work on the HELOC by the way. It is a vastly underutilized way to get money ready to go when you need it.

    This is a great argument for managing long distance. If you are minutes away from your property, you're going to be tempted to do all your own work. Hire out the $15 / hr jobs, and make room to focus on the $1000 jobs. 


    2Reply
  • John D.
    Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
    4y

    Based on your limited description, DHS will likely earn more.  Does it have a garage by chance?

    1Reply
  • Laura Kastner
    Hermosa Beach · Member since 2021 · 40 posts · 9 votes
    4y
    Quote from @John D.:

    Based on your limited description, DHS will likely earn more.  Does it have a garage by chance?

    Hey John,

    Decided against DHS (and yes garage). Going with YV at the moment. Lost the pool house at the very last minute-someone scooped me.

    I personally love the desert cities even year round.  

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  • Alexandra Lim
    Rental Property Investor · Los Angeles · Member since 2020 · 4 posts · 4 votes
    4y

    Hey @Laura Kastner I'm looking in to DHS STR as well right now - if you don't mind me asking, what's the reason you decided against DHS? It looks like occupancy rates are pretty high given how expensive JT and Palm Springs is getting

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  • Laura Kastner
    Hermosa Beach · Member since 2021 · 40 posts · 9 votes
    4y
    Quote from @Alexandra Lim:

    Hey @Laura Kastner I'm looking in to DHS STR as well right now - if you don't mind me asking, what's the reason you decided against DHS? It looks like occupancy rates are pretty high given how expensive JT and Palm Springs is getting

    Hi Alexandra,

    Sorry I missed this before! 

    I decided to skip DHS as it is not as desirable “yet” as other desert areas that you could still get into. Appraisal gap was super high too. 

    Given those things, if you found a property that you could turn into a “destination” with a great “wow factor”, you could fo well and wait for some of the plans for the area to catch up and make the city more desirable. 


    0Reply
  • Jewel B.Pro Member
    New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 120 votes
    3y
    Quote from @Sean Starkey:

    I just got approved for a 180k HELOC and I am looking to start buying STRs. I currently live in orange county CA and am looking at the Smoky mountains and Joshua tree. How do I make the most out of my 180k? Which market do I start in? I also plan on managing them myself

    Thanks!


     What did you end up doing?

    0Reply
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