Considering getting into STRs. Any advice would be appreciated!

Considering getting into STRs. Any advice would be appreciated!

Investor · Short Gap, WV · Member since 2016 · 160 posts · 38 votes

Since 2012, I've been on the sideline watching, learning, and saving to get into real estate investing. I'm 28 yrs old now and finally have some funds saved up and set aside specifically for real estate. Not a huge amount, but what I think it enough to get started. My goal over the next 6-12 months is to finally get into RE investing. I'm a real estate agent for West Virginia and Maryland, and prior to this last week, have only ever really considered LTRs, since STRs aren't popular in my area. About a week ago, I had a meeting with a fellow BP member who really opened my eyes to the STR potential. I've been doing a lot of reading over the last week, and now seem to be learning more towards starting my portfolio with STRs rather than LTRs. The CoC seems to be very appealing, and of course that is important when starting out since my cash reserves is pretty limited. I'm more open to investing out of state now, since my local market is "challenging" to become a full time real estate investor. I know it can be done, but if I can accelerate myself by starting out of state then later move back into my area as opportunities become available, then I'd like to at least see the options available.

Here's my question: Does anyone have any recommendations on where to start out for someone who is new to STRs? If anyone has any experience working with a specific group or course, I'd love to hear your input. Access to data is huge, and I know many people spend a many thousands dollars on courses to get started and to get access to tools. Does anyone have any recommendations for me that would be helpful? 

Thanks and best regards!

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Travis TimmonsPro Member
Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
3y

It's harder and more expensive to get a short term rental up and going than you think it will be, and it is easier to manage once it is established than you think it will be. 

Other basic pieces of advice - do your own research. I like national parks bc there is a lot data on visitors. Lesser known places like New River Gorge, Mammoth Cave, Pictured Rocks National Lakeshore, Shenandoah, Acadia, etc. are going to outperform from a cash on cash, purchase price to annual gross rents standpoint.  Airdna, rabbu, and others are a useful tool but not to be relied on completely. Stalk airbnb and vrbo listings in the areas that you are looking...find other listings that have average to below average furnishings, pictures, etc. that are doing well. That was the best data point for me getting started. I bought a house just down the street from a place that looked like two college guys furnished it. And that house was booked up like crazy...we have since outperformed that property (feels better than it should to watch our calendar fill up before theirs). During the "holy crap, we're spending so much money, this better work" period, it is reassuring to have those comps to look at for encouragement. 

There's a lot more, but I'll stop at this. Launch your listing at the start or middle of peak travel season for wherever your property is located (likely summer). You'll get the new listing bump in search results for the first 30 days on the booking platforms. After those first 30 days in peak season, you'll have a fully booked calendar and will continue to show up well in search results, get a much needed cash injection, and launches you and you listing off with a great start and some momentum. 

Feel free to send me a message if you think that I can be helpful or if you want to talk in more detail. 

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  • Investor · Charlottesville Virginia · Member since 2021 · 348 posts · 346 votes
    3y

    If you are interested in investing out of state you could always consider doing some sort of partnership too. This could also help you benefit from the cash flow of STRs but potentially have a partner who does most of the work managing it. This is the kind of structure I am trying to work out in my deals right now!

  • Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
    3y

    @Dakoda Spencer- thanks  1)  get  formally  pre approved  with a lender in order to  learn / understand the process and  also  so you can determine if you are  able to  obtain financing   2)  if you are not able to  get approved or  if you arent  ready -  this still  will be a good   exercise in order to  learn  .... 3) the pre approval  process is  free / non binding  and relatively easy - good luck

  • Investor · Short Gap, WV · Member since 2016 · 160 posts · 38 votes
    3y
    Quote from @Dave Skow:

    @Dakoda Spencer- thanks  1)  get  formally  pre approved  with a lender in order to  learn / understand the process and  also  so you can determine if you are  able to  obtain financing   2)  if you are not able to  get approved or  if you arent  ready -  this still  will be a good   exercise in order to  learn  .... 3) the pre approval  process is  free / non binding  and relatively easy - good luck

    Excellent advice and I have been considering doing this. I see you are a lender, would you recommend any specific groups I should reach out to? Or try to stick with the local banks? Thanks!
  • Investor · Short Gap, WV · Member since 2016 · 160 posts · 38 votes
    3y
    Quote from @Jacob St. Martin:

    If you are interested in investing out of state you could always consider doing some sort of partnership too. This could also help you benefit from the cash flow of STRs but potentially have a partner who does most of the work managing it. This is the kind of structure I am trying to work out in my deals right now!

    I am indeed interested! Just finding someone I can get to know and trust is the main thing. I have some money to invest, but I definitely want to be involved in the management process. 
  • Investor · Charlottesville Virginia · Member since 2021 · 348 posts · 346 votes
    3y
    Quote from @Dakoda Spencer:
    Quote from @Jacob St. Martin:

    If you are interested in investing out of state you could always consider doing some sort of partnership too. This could also help you benefit from the cash flow of STRs but potentially have a partner who does most of the work managing it. This is the kind of structure I am trying to work out in my deals right now!

    I am indeed interested! Just finding someone I can get to know and trust is the main thing. I have some money to invest, but I definitely want to be involved in the management process. 
    Well I have some deals in the pipeline that I am looking for partners on. Feel free send me a connection request and we can get to know each other and see if partnering might be mutually beneficial or if not maybe there is another way I can help you out in your real estate journey!
  • Los Angeles, CA · Member since 2019 · 97 posts · 38 votes
    3y

    @Dakoda Spencer what is an STR?

  • Jewel B.Pro Member
    New to Real Estate · Lehigh Valley, PA · Member since 2021 · 352 posts · 121 votes
    3y
    Quote from @Cirilo Villar:

    @Dakoda Spencer what is an STR?

    Short term rental. Airbnb, VRBO, etc. Furnished under 30 days.
  • Los Angeles, CA · Member since 2019 · 97 posts · 38 votes
    3y

    @Jewel B. Thanks!

  • Real Estate Agent · Reston, VA · Member since 2017 · 296 posts · 163 votes
    3y

    @Travis Timmons I have been working towards breaking into this space. Your advice gets a five star. Best advice in that it goes beyond the traditional stuff that we learn about.

  • Rental Property Investor · Phillipsburg, NJ 08865 · Member since 2018 · 48 posts · 24 votes
    3y

    I used The Short-Term shop to help find a turn-key STR. I hadn't heard of Awning, but looking at them now, as well. Good luck!

  • Member since 2022 · 3 posts · 1 vote
    3y

    DSCR loans are not what they look like, you get qualify like a regular loan, plus your property.

  • USA · Member since 2022 · 879 posts · 109 votes
    3y
    1. When it comes to starting a short-term rental portfolio, the most important thing is to do your research and due diligence. Look into the local regulations and laws in the area where you're considering investing, as well as the demand for short-term rentals in that location. Access to data and market analysis tools can be incredibly helpful in this process, so don't be afraid to invest in a course or program that can provide you with the information you need to make informed decisions.
    2. In my experience, starting out in a new market can be intimidating, especially if you're new to short-term rentals. One way to ease into the process is to consider partnering with a local property management company or real estate agent who has experience with short-term rentals in the area. They can provide valuable insights and guidance as you navigate the local market and build your portfolio.
    3. If you're considering investing out of state, it's important to be aware of the potential challenges and complexities that can come with managing a short-term rental from a distance. Consider hiring a property management company to handle the day-to-day operations, and make sure to keep good lines of communication open with your team on the ground to stay informed about what's happening with your property.
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