Outer Banks STR Market

[Andrew Rader]

Hello - I am a new investor interested in getting into the Outer Banks STR market. For any current investors there, have you found it successful? Would you say it is oversaturated or still room for growth? I have been vacationing there since I can remember but do not have a good feel on the investor side of things. Also, what is the typical ADR and Occupancy for a 4 bedroom property? Thanks so much!

[Glenna Wood]

In any beach market, your gross vary greatly on how close you are to oceanfront. I've been much happier and made more $$ through the years with my FL rentals because OBX is a only seasonal market. The money weeks are Memorial Day to Labor Day with a few shoulder weeks. The vast majority sit empty fall to spring. Since COVID prices have soared and inventory is very tight. In recent chats with realtor contacts a very general rule is a good rental will gross 10% of its price. An "average" 5 BR with pool and hot tub with best beach access will gross $100k. With COVID some rental homes have been turned into second homes and are out of the market. If you check rental company calendars, bookings are very strong for this year. Usually you can't see the rates once booked but if they list the range on the house it shows you the rates for prime (midJune to midAug) vs off season weeks. So you can develop your own idea. If you want OBX because you love it and will get personal enjoyment from it, then buy with the idea that it helps pay the mortgage. For a pure investment, I would head much further south. Best wishes.