ANY STR FRIENDLY AREAS?

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Michael Hyun
Investor · San Jose CA · Member since 2018 · 114 posts · 73 votes
4y

My personal stance on this is that money is always made in places where other investors are scared to go. This is just my take, but you can't hold STR to the same standard as LTR - just because a STR does well its first year, doesn't mean it will do well the second year. Joshua Tree increased in STR unit count by 50% in one year. Demand didn't grow by 50%. This is because its a STR friendly area and investors flocked to it like crazy.

But in markets like Henderson, NV - Airbnb is strictly regulated (but still legal). Each airbnb needs to be 1000 ft from the next Airbnb. This severely limits the number of Airbnbs in the city and caps your competition. This ensures long term success, not just a few years.

Currently, I'm asking questions like "how can I get into this market" rather than "which markets allow me to do this".

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    4y
    Quote from @Matthew Pride:

    Looking for cities that are STR FRIENDLY! Any suggestions??!


     There are many.

    Pigeon Forge

    Branson

    Orlando

    are just a few

    3Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    4y
    Quote from @Matthew Pride:

    Looking for cities that are STR FRIENDLY! Any suggestions??!


     Columbus Ohio. Check out this article on the stats and trends for our market https://learn.roofstock.com/blog/columbus-oh-real-estate-market.

    3Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    4y
    Quote from @Matthew Pride:

    Looking for cities that are STR FRIENDLY! Any suggestions??!


     I have 12 airbnb units in Columbus, Ohio

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    1Reply
  • Aubrey Brendle
    Real Estate Agent · Asheville, NC · Member since 2021 · 11 posts · 12 votes
    4y

    WNC without a doubt is an amazing str market.  Asheville's economy is heavily driven by tourism but the city itself does not allow for short term rentals to be established which provides an opportunity for the surrounding mountain towns to become prime str areas.  I'd be happy to chat with you about our market anytime you'd like!

    3Reply
  • Nick Benjamin
    Real Estate Agent · Kansas City, MO · Member since 2022 · 27 posts · 19 votes
    4y

    KC is a great spot to be in right now

    0Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    4y
    Quote from @Aubrey Brendle:

    WNC without a doubt is an amazing str market.  Asheville's economy is heavily driven by tourism but the city itself does not allow for short term rentals to be established which provides an opportunity for the surrounding mountain towns to become prime str areas.  I'd be happy to chat with you about our market anytime you'd like!


     I recently stayed in a very nice vacation rental overlooking the broad river that was very close to The Biltmore House. It seems to be doing very well.

    1Reply
  • Michael Hyun
    Investor · San Jose CA · Member since 2018 · 114 posts · 73 votes
    4y

    My personal stance on this is that money is always made in places where other investors are scared to go. This is just my take, but you can't hold STR to the same standard as LTR - just because a STR does well its first year, doesn't mean it will do well the second year. Joshua Tree increased in STR unit count by 50% in one year. Demand didn't grow by 50%. This is because its a STR friendly area and investors flocked to it like crazy.

    But in markets like Henderson, NV - Airbnb is strictly regulated (but still legal). Each airbnb needs to be 1000 ft from the next Airbnb. This severely limits the number of Airbnbs in the city and caps your competition. This ensures long term success, not just a few years.

    Currently, I'm asking questions like "how can I get into this market" rather than "which markets allow me to do this".

    7Reply
  • Tom Dempsey
    Home Stager · Poconos, PA · Member since 2022 · 45 posts · 30 votes
    4y

    Hey @Michael Hyun! 

    I recommend checking out areas that are more vacation destinations. Look at areas that you yourself would want to go visit and stay for a week or two. I am really huge on the Poconos market here in PA as it has proven to be a huge market for STR investors (just be careful with regulations from any HOA's or communities). Fort myers is another top choice of mine that I have been keeping my eye on. Nothing personally there just yet but really nice vacation spot.

    6Reply
  • Stetson MillerBusiness Member
    Real Estate Broker · Fort Myers, FL · Member since 2019 · 576 posts · 423 votes
    4y

    @Matthew Pride I would second the Fort Myers/Cape Coral area mentioned above by @Tom Dempsey. The area as a whole is very friendly to STR's, as expected within a larger vacation destination, assuming you're purchasing outside of an HOA. Even then though, many people still have success with mid-term 1-6 month rentals, which often are allowable by most HOA's, and are still a viable option if you were looking for something a bit more stable than short term

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  • Christian EhlersBusiness Member
    Real Estate Agent · NH & MA · Member since 2021 · 457 posts · 291 votes
    4y

    Hi @Michael Hyun I would agree with @Tom Dempsey as you definitely want to be careful with city regulations. Finding a place that is a vacation destination, that relies on travelers coming to the area to support their economy highly reduces the chances of regulations being passed that will negatively affect your business. Especially a market that has had at least some regulations of STR's already, but still allows them can be huge! If you go to a market with no regulations, there's a solid chance that eventually some will be passed and you will have to find a new way to utilize the property.

    I operated an STR in Jacksonville Beach florida, as they have been STR friendly for a long time, and Florida in general seems to be very pro-business as well as pro-property ownership rights (meaning you'll likely be able to continue using the property for STR as you would like!).

    [email protected]978-396-9939
    3Reply
  • Joshua MessingerBusiness Member
    Property Manager · Poconos, PA · Member since 2020 · 443 posts · 264 votes
    4y

    Hey @Matthew Pride! 

    Make sure to key in on areas that are extremely desirable from having rich amenities. Areas that have amenities that are irreplaceable will be forever great areas for STRs/LTRs unless if the amenities end up going out of trend or dying out. Otherwise, given that you find an area that is filled with amenities like this it is very predictable to know when to sell/buy given if the amenities continue to stay desirable or they end up dying out.

    Hope this helps and if you have any other questions please don't hesitate to reach out! 

    All the best,

    Josh 

    [email protected]484-986-5012
    0Reply
  • Jimmy Woodard
    Walnut Creek, CA · Member since 2020 · 285 posts · 318 votes
    4y

    @Matthew Pride there are STR friendly areas across the country (and two in your backyard of Henderson and North Las Vegas). Where do you want to own an STR? Start there and see if the regulations support it by simply googling {city} short term rental laws.

    Don't care where you own, just after the returns? The sweet spot is markets with the median purchase price under/around $500k, 4+ bedrooms, and potential revenue north of $100k. Tools like Rabbu and Airdna can help you find potential revenue, and so does good ol' fashioned Airbnb/VRBO competition research (as @John Underwood would tell you).

    If you need help analyzing markets, feel free to DM me!

    1Reply
  • Que Tran
    Real Estate Agent · Scranton PA · Member since 2019 · 93 posts · 98 votes
    4y

    @Matthew Pride

    Take a look at Big Bass Lake in Gouldsboro PA. One of the more tougher HOA, but it keeps out the riff raff. I have 3 in the community and it's been a great ride. The registration process is easy, but annoying. So far, we've been busy. It has slowed down for this season, but I've seen other owners saying the same thing. Good luck.

    0Reply
  • Chase Hoover
    Real Estate Broker · Staunton, VA · Member since 2019 · 194 posts · 216 votes
    4y

    If it's your first deal and you want peace of mind, steer clear of any HOAs, residential neighborhoods, or residential areas in general. Find areas that are heavily STR and have been this way for decades. We have many areas like this in Shenandoah Valley, Virginia!

    3Reply
  • Mitch Davidson
    Lender · Asheville, NC · Member since 2020 · 463 posts · 507 votes
    4y

    @Matthew Pride, I think @Michael Hyun's comments above are gold. Instead of focusing on markets that are easy to jump into, perhaps focus on markets where it will be hard for people to jump in and compete with you. Here in Asheville, for example, you can't STR an entire home inside city limits. You can rent out a room or small space of a home you live in, but that's about it. The rules help cap the number of competitors in the overall market, help scare off some would-be investors, and likewise help locals have a place to live. About 1/3 of the city is not inside city limits though, meaning STR is allowed, and there are many great STR's within 30 minutes of town. Similarly, you can look at towns where STR does well and yet there are barely any contractors or service providers to be found by internet search. We have many of those in Western NC. It seems counterintuitive. Why would you want to do that to yourself, you might ask. The answer is that once your place is setup you'll have a safer investment, meaning one that's hard to compete with. Sure, you'll have to spend much time at the home right after closing, networking and digging up help, but in my experience that's not too hard. You just have to have patience and persistence.

    0Reply
  • Chantal Thomas
    Member since 2020 · 30 posts · 8 votes
    4y

    @Chase Hoover How do you find the Charlottesville market? I am looking at possible STR, as my partner is a weekday commuter. Just jumped onto Airdna today and it seems decent from my newbie eyes.

    0Reply
  • Chase Hoover
    Real Estate Broker · Staunton, VA · Member since 2019 · 194 posts · 216 votes
    4y

    @Chantal Thomas The Charlottesville/Albemarle County area is very STR restrictive. Essentially you have to live on-site in order to operate an STR.

    Nelson County to the south is friendly and very high demand (known for breweries, wineries, distilleries, cideries). Across the mountain, Massanutten is another great STR market (ski resort).

    Here's a good breakdown of jurisdictional rules & regulations in the Shenandoah area created by our management partner:  https://www.carriagehousestr.c...

    1Reply
  • Chantal Thomas
    Member since 2020 · 30 posts · 8 votes
    4y

    Thanks for the reply @Chase Hoover. That website looks really good, and definitely gives me some things to consider. 

    0Reply
  • Michael Hyun
    Investor · San Jose CA · Member since 2018 · 114 posts · 73 votes
    4y

    So I'll throw this out there as a free little golden nugget. A market that I considered heavily is Zion National Park. The main town that surrounds Zion National Park completely banned STRs in all residential zoning. 

    The competition there is almost none because of this. The only people doing STRs are either commercially zoned properties, or conditional use permitted spots. Look at the tiny homes of Zion national park and behold the crazy demand that they receive because they have almost no competition from residential Airbnbs. Their success is long-term. Sure it's more work, but in just one year, Joshua Tree became saturated in my opinion. Can you still make money there? Yes. Is it harder than last year? Yes. 

    Their calendars are completely booked 3-5 months out. That's the type of occupancy I want. 

    Beware though - the people of Utah in that city know that Zion national park has a bunch of investors trying to get in that market. In order to get a conditional use permit, you need to go before the city council and show why you should get that permit. Some locals might object and prevent you from getting that permit. But if you get it - your future looks bright. 

    Heres the zion tiny homes: https://www.zionstinyoasis.com...

    0Reply
  • John D.
    Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
    4y

    Tons of STRs in St. George and neighboring areas (including some monstrous homes -- which is my niche -- but those are beasts even by my standards) all within an hour of Zion.  But yes the homes super close to or in Zion proper command a huge premium.  The little 1 bedrooms you shared earn more per night than a 4 bedroom in a suburban area 30 minutes away, it's all about the views experience and proximity!  

    1Reply
  • Nick Rutkowski
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    4y

    @Matthew Pride

    Have you tried looking at zoning and permitted uses in your area? If it’s a commercial/mixed use property that allows bed and breakfasts then you’re good to go. All of my STRs are mixed use zoning which permits BnBs.

    0Reply
  • Vaheh Takhmazyan
    Member since 2022 · 12 posts · 2 votes
    4y
    Quote from @Nick Rutkowski:

    @Matthew Pride

    Have you tried looking at zoning and permitted uses in your area? If it’s a commercial/mixed use property that allows bed and breakfasts then you’re good to go. All of my STRs are mixed use zoning which permits BnBs.


     Can you please elaborate on this, what exactly do you mean by mixed use?

    0Reply
  • Jason Kudo
    Real Estate Agent · Pasadena, CA · Member since 2017 · 274 posts · 255 votes
    4y

    Unless you have the ability to hold a property that may be rendered worthless from getting denied a conditional use permit or know the process inside and out, I would advise against obtaining a property that will require a conditional use permit in order to use as an STR. The conditional use permit application process is lengthy which means ineligible to be done during the escrow due diligence period, requires multiple court appearances, must be pried from the hands of the issuer, pricey, and has a high likelihood of getting denied. The default answer is "no" and you have to put in a lot of work to convince them why they shouldn't say no which means money spent up front on studies, data, surveys, etc. You can't just walk in there and say, "I want to open a vacation rental" and expect to walk out with a permit. They are going to ask you things about the potential environmental impact of the usage and how you plan to mitigate this potential impact, why the usage is necessary, etc.

    The greater the risk, the greater the reward but make sure you have the ability to absorb that risk should/when it goes south.

    0Reply
  • John D.
    Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
    4y


     Can you please elaborate on this, what exactly do you mean by mixed use?

    It's a zoning term that means residential and commercial, or hotel and retail, or some other "mixed use" in the same building.  Typically retail or commercial below, and residential or hotel up top.


    1Reply
  • Michael Weigum
    Real Estate Agent · Santa Rosa Beach, FL · Member since 2019 · 112 posts · 116 votes
    4y

    Hi @Matthew Pride

    Myrtle Beach, SC oceanfront condos have been a great STR investment for me. I'm happy to answer any question you might have about the area.

    0Reply
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