Str Market Cities: 200k-400k

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Str Market Cities: 200k-400k

Member since 2020 · 20 posts · 12 votes

Having a bit of analysis paralysis finding an str market with purchase price range of 200k-400k. I was going to do a 1031 and get into the Smoky Mountain area but ultimately decided not to since I have a 1099 job and enjoy the steady cashflow from my current long term rentals.

So I’m pivoting to a lower purchase price and struggling to find a good market - Blue Ridge, GA seems interesting but I’ve heard mixed reviews. Any suggestions of other markets worth analyzing?

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Ryan Blankenship

Real Estate Agent · Lancaster, OH · Member since 2022 · 15 posts · 25 votes

Hocking Hills in Ohio is a great place to invest in the $200-400k range. Steady growth, affordable properties, limited seasonality. I have a few STR's there and was able to quit my 9-5 after only 2. Message me if you have any interest.

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
Quote from @Dave Villa:

Having a bit of analysis paralysis finding an str market with purchase price range of 200k-400k. I was going to do a 1031 and get into the Smoky Mountain area but ultimately decided not to since I have a 1099 job and enjoy the steady cashflow from my current long term rentals.
So I’m pivoting to a lower purchase price and struggling to find a good market - Blue Ridge, GA seems interesting but I’ve heard mixed reviews. Any suggestions of other markets worth analyzing?

What about Helen, GA?
Seems like a cool place.
I haven't looked at the profitability of the area, but I have stayed there in the Summer to go tubing.
They also have a big Octoberfest season.
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Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
3y
There are still some opportunities in the Tampa area at the upper end of your range. You can get a 3/2 home close to downtown Tampa in the heights around $400k and should cash flow decently.
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Tyler Solomon
Lender · Austin, TX · Member since 2022 · 223 posts · 244 votes
3y
the gulf coast is worth a look - @Napoleon DeCiutiis can help you out down there
2 Reply
Michael Weigum
Real Estate Agent · Santa Rosa Beach, FL · Member since 2019 · 112 posts · 116 votes
3y
Myrtle Beach ocean front condo's are a great option in that price point. Now is the time to get the ball rolling so you can hit the ground running before peak season. I'm happy to share my story and answer any questions.
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
I hear Coffeeville, Kansas has a lot of potential. :)
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Lake Lutes
Real Estate Agent · Fort Walton Beach, FL · Member since 2018 · 143 posts · 114 votes
3y
I invest in the panhandle of Florida, the Gulf coast specifically, and help other investors invest out here too - there's a lot that would fit your buying criteria: sub-$400K, steady occupancies, and good cashflow. The market is driven by tourism primarily March through October.
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Kiera Underwood
Real Estate Agent · Oklahoma City, OK · Member since 2019 · 956 posts · 600 votes
3y

@Dave Villa I'm positioning everything I own and any new purchases as short-term rentals in Oklahoma City. The management team I work with is keeping vacancies lower than market standard via intentional decor, pricing, super host status. The people in my network working with the management team are happy with pm as well. I've worked with investors on LTR here for years, but STR has been our saving grace in order to cash flow at current interst rates. It's still easy to get approved through the city here and there are tons of STRs that are in operation but aren't approved . My angle is to get in while it's easy and affordable so that when they tighten up regulation like they have in other markets I'll be in the protected class.

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Kristina Kuba
Tampa, FL · Member since 2021 · 383 posts · 389 votes
3y
@Dave Villa
I am in Tampa and own a few short term rentals myself here and think Tampa is a great market because of the consistency that is driven by the different types of tourism. Not only do we have beach tourism (#5 ranked beaches by TripAdvisor in the world in 2021), we have educational tourism (one of the largest universities - USF and then UT), and also medical tourism (we have some of the best hospitals in the country especially for outpatient services). Tampa General Hospital has been named one of the top 100 hospitals in the United States, according to Newsweek. The 1,041-bed hospital was recently ranked as one of the news magazine's World's Best Hospitals 2022.

I think you will find STR's in the upper end of your budget close to the Tampa urban core that will cash flow nicely. Plus, if you are comparing to another southern stature, Florida averages far less on property tax than a state like Texas where the average tax bull runs 2.8% of assessed value per year.

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Will FraserPro Member
Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
3y
And as further demonstration of why many (or most) STR owners in tertiary markets (like OKC, Tulsa, Wichita, etc) are seeing a diminishing return please see this conversation. Many MANY cashflow junkies have seen that with $12-15k up front they can 5x their cashflow and they have brought a flood of STRs to markets that have poorly defined tourism economies.
It will be interesting to watch this unfold over the next 24 months. Most of all I would hate to be a mid-tier hotel with poor amenities in these markets!
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Sara Levy-Lambert
USA · Member since 2022 · 879 posts · 109 votes
3y
1. Tourism demand: Look for markets that attract a lot of tourists, either because of their natural beauty, cultural attractions, or other draw. These markets may have higher demand for short-term rentals, which could potentially lead to higher occupancy rates and revenue.
2. Local regulations: Research the local regulatory environment for short-term rentals. Some cities and towns have more restrictive regulations, which could make it more challenging to operate a short-term rental.
3. Real estate market conditions: Look for markets with relatively affordable real estate prices, as well as stable or growing populations. These factors can indicate a healthy real estate market with potential for appreciation over time.
4. Competition: Consider the level of competition in the market. If there are a lot of other short-term rentals in the area, it may be more challenging to stand out and attract guests.
  
  This might not help with the analysis paralysis, but it may also be a good idea to team with an str agent or google around for some free airbnb estimator tools
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Nate Sanow
Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
3y
Quote from @Will Fraser:

And as further demonstration of why many (or most) STR owners in tertiary markets (like OKC, Tulsa, Wichita, etc) are seeing a diminishing return please see this conversation. Many MANY cashflow junkies have seen that with $12-15k up front they can 5x their cashflow and they have brought a flood of STRs to markets that have poorly defined tourism economies.
It will be interesting to watch this unfold over the next 24 months. Most of all I would hate to be a mid-tier hotel with poor amenities in these markets!

@Will Fraser you make an interesting point. It's something I've processed almost subconsciously without your exact articulation. I'm bullish on OKC and Ttown I think they are great markets and I have owned properties in both. I think that they mirror as parallel's with different dynamics (eg OKC has a pro sports team, tulsa has tons of arts and music) but I also feel like they both have a ceiling of expectation. That's a ceiling continuously being raised… like "raise the roof" style lol … but it is slow and steady… what I'm saying is to echo your point, I'd be nervous if anyone locally had 50% or more of their portfolio set up as an STR. Even then a healthy mix of the mid term rental approach to attract 30-90 day stays, MTR not STR would be my personal primary approach. As an observation, the numbers don't look that great there after factoring in added costs of utilities and house cleaners let alone furnishings, and the liability of your time. That's largely my opinion but it's also just something that I sense.
2 Reply
Napoleon DeCiutiis
Real Estate Agent · The Short Term Shop / Florida Emerald and Forgotten Coasts · Member since 2022 · 217 posts · 126 votes
3y
Quote :

Having a bit of analysis paralysis finding an str market with purchase price range of 200k-400k. I was going to do a 1031 and get into the Smoky Mountain area but ultimately decided not to since I have a 1099 job and enjoy the steady cashflow from my current long term rentals.
So I’m pivoting to a lower purchase price and struggling to find a good market - Blue Ridge, GA seems interesting but I’ve heard mixed reviews. Any suggestions of other markets worth analyzing?

@Dave Villa, Shoot me an IM- let's see if PCB / Emerald Coast is something you'd be interested in!
0 Reply
Holly Barrett
Real Estate Agent · Dawsonville, GA · Member since 2017 · 206 posts · 144 votes
3y
@David Villa Helen and Dahlonega would be my top pics. Occupancy rates and ADR seem to be withstanding market shift, prices are lower than Blue Ridge, and year round attractions (wine, hiking, waterfalls, tubing, kayaking, history, festivals)
1 Reply
Will FraserPro Member
Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
3y
Quote from @Nate Sanow:

Quote from @Will Fraser:

And as further demonstration of why many (or most) STR owners in tertiary markets (like OKC, Tulsa, Wichita, etc) are seeing a diminishing return please see this conversation. Many MANY cashflow junkies have seen that with $12-15k up front they can 5x their cashflow and they have brought a flood of STRs to markets that have poorly defined tourism economies.
It will be interesting to watch this unfold over the next 24 months. Most of all I would hate to be a mid-tier hotel with poor amenities in these markets!

@Will Fraser you make an interesting point. It's something I've processed almost subconsciously without your exact articulation. I'm bullish on OKC and Ttown I think they are great markets and I have owned properties in both. I think that they mirror as parallel's with different dynamics (eg OKC has a pro sports team, tulsa has tons of arts and music) but I also feel like they both have a ceiling of expectation. That's a ceiling continuously being raised… like "raise the roof" style lol … but it is slow and steady… what I'm saying is to echo your point, I'd be nervous if anyone locally had 50% or more of their portfolio set up as an STR. Even then a healthy mix of the mid term rental approach to attract 30-90 day stays, MTR not STR would be my personal primary approach. As an observation, the numbers don't look that great there after factoring in added costs of utilities and house cleaners let alone furnishings, and the liability of your time. That's largely my opinion but it's also just something that I sense.

You're exactly right, Nate!
I was talking to a stager ally of mine about a flood of STRs that she has been setting up for clients and she said "oh Will, that's not even the half of it. We did about the same number in 2019 that we've done in 2022 but most of those freaked out during the *RONI and pivoted into long term rentals. But in the last 4 months we've been on a blitzkrieg with OOS investors setting them back up here."
The thing that really gets my boots to shaking is the idea that many people are going into properties at a basis (purchase + renovation + furnishing) that ONLY works with STR numbers.
When the winds come and the waters rise (metaphorically) and the returns compress (as they certainly will with a capital intensive investing style like STRs) then folks will be obliged to lose money in our markets AND A-class long term rentals will see compression, just like in 2019-2020.
BUT I'd argue that if you are going to lose money on a property, there are better places to lose money.
2 Reply
Ryan Blankenship
Real Estate Agent · Lancaster, OH · Member since 2022 · 15 posts · 25 votes
3y
Hocking Hills in Ohio is a great place to invest in the $200-400k range. Steady growth, affordable properties, limited seasonality. I have a few STR's there and was able to quit my 9-5 after only 2. Message me if you have any interest.
5 Reply
Ricardo Hidalgo
Real Estate Agent · Member since 2019 · 569 posts · 257 votes
3y
Quote from @Dave Villa:

Having a bit of analysis paralysis finding an str market with purchase price range of 200k-400k. I was going to do a 1031 and get into the Smoky Mountain area but ultimately decided not to since I have a 1099 job and enjoy the steady cashflow from my current long term rentals.
So I’m pivoting to a lower purchase price and struggling to find a good market - Blue Ridge, GA seems interesting but I’ve heard mixed reviews. Any suggestions of other markets worth analyzing?

Navarre Beach, Okaloosa Island and Panama City Beach offers STR options under 400k!
0 Reply
Andres Murillo
Real Estate Agent · Los Angeles, CA · Member since 2022 · 137 posts · 106 votes
3y
I think it's more important to focus on a location strategy rather than specific cities - especially if you've already identified some paralysis by analysis. This will help you buy-in to the "why" a city will work before you have to actually buy in a specific city.
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January Johnson
Real Estate Agent · Emerald Coast, FL · Member since 2016 · 820 posts · 486 votes
3y
Your money will go a long way on Panama City Beach in Florida! $200K will only get you a 1/1 or studio condo, but $400K can get you a 2/2 townhome or a SFR that's off the beach a little.
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Account Closed
Investor · KS · Member since 2020 · 4 posts · 5 votes
3y
Quote from @Michael Baum:

I hear Coffeeville, Kansas has a lot of potential. :)

Do tell 😃
0 Reply
Villy Ellinger
Real Estate Agent · Fort Walton Beach, FL · Member since 2018 · 219 posts · 275 votes
3y
@Dave Villa I'm going to agree with some posters above that Panama City Beach is a great option to look at. I would also suggest looking into the Fort Walton Beach area of the Emerald Coast of FL. As for your budget, I actually thing that you can find an STR property in the $200Ks or so that does very well. The market is somewhat oversaturated in 2/2 condos. But there are small 1 bedroom and studio units that do really well. I personally have two such units in Fort Walton Beach - one at Pirates Bay and one at El Matador. Pirates Bay grossed over $36K last year and the Matador unit did about $42K (just rent, no cleaning or fees). Other similar units do that well too. Mind you these are studios. There are quiet a few such options in PCB as well. The advantage you might have in purchasing a studio is that you are coming in with cash from a 1031. Studios are extremely hard to finance, so sellers are a lot more willing these days to consider price concessions for solid cash buyers.
2 Reply
Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
Quote from @Account Closed:

Quote from @Michael Baum:

I hear Coffeeville, Kansas has a lot of potential. :)

Do tell 😃
Kind of a joke. One of our long term gurus here has 23 units in Coffeeville. It is the worst place in America to live. He has a very specialized rental that he rents to refinery guys. He buys homes for usually under 10k, does minor rehab and rents by the room $400 a week.

Coffeeville is a refinery town and that is about it. Search for Paul Sandhu and you will find a ton of posts that are funny as hell.
1 Reply
William LokarBusiness Member
Realtor · Northeast TN and Central VA · Member since 2021 · 52 posts · 38 votes
3y
Just a bit further north from the Smokies the Tri-Cities (Kingsport, Bristol, and Johnson City) offers some low price point STR potential. You don't have a main stream vacation crowd, but it reduces some seasonality and there is always something going on in the lower price-point area. The Bristol Motor Speedway is a big draw and a new Hard Rock Casino is being built in Bristol, not to mention strong growth in East Tennessee. You can get good cash flow in your price range.
0 Reply
Tiffanie Figueroa
Member since 2022 · 75 posts · 42 votes
3y
San Antonio, TX! People come here for many reasons including vacation, corporate meetings, Airforce graduations and more. We have a great market here and finding something in that price range is not a problem!
0 Reply
Todd Goedeke
Contractor · Sheboygan, WI · Member since 2016 · 917 posts · 266 votes
3y
@Dave Villa consider continuing your W-2 job while 1031 ing current portfolio into STVR properties that you lease to a management company.
Leasing will allow you to be a passive investor in STVRs while getting cash flow greater than LTRs. It's possible to eliminate management risk( marketing) thru leasing while receiving a fixed guaranteed return of 20%+ ROI in cash flow.
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Sam McCormackBusiness Member
Real Estate Agent · Cincinnati, OH/NKY · Member since 2021 · 1k+ posts · 833 votes
3y
Northern KY might be of interest. You would be surprised... You can STR for before Bengals games because it is so close to the stadium and a great street in NKY called "Mainstrasse". Bars and restaurants aplenty for people to go to before walking across the bridge for the games. And then you have the creation museum and the Arc in NKY that get a LOT of attraction. It flew over my head at first but you'd be surprised
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