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".
@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
But.... the STR market is oversaturated in Cape Coral. I think this will be aleviated as some new investors panic as the market changes, but pricing is hampered by oversupply. You will see big numbers on the right property in the season, but the rest of the year can be a challenge. I always recommend that anyone buying an STR do it ensuring that numbers work as a longterm rental also. The ability to pivot as market change is crucial. I hope this is helpful to someone.