Are STRs & MTRs a thing of the past...

Real Estate Consultant · Brandon, FL · Member since 2015 · 66 posts · 27 votes

I have several clients that are currently earning good returns with STRs & MTRs, on the flip side. I have witnessed where NEWBIEs are having moderate cash-on-cash returns in TAMPA BAY area. Currently, the competition is fierce the girl next door has become the competitor, therefore driving prices down due to a higher competitive inventory.

Will STRs & MTRs become a thing of the past...Thoughts?

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Luke CarlPro Member

Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes

People are going to stop going on vacation. Probably tomorrow.

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Dave StokleyBusiness Member
Property Manager · Cleveland, OH · Member since 2015 · 705 posts · 799 votes
3y
Yep get out while you can!
Seriously though, yeah it is way more competitive and the people who aren’t operating their places like real businesses probably aren’t gonna make it.

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Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
3y
People are going to stop going on vacation. Probably tomorrow.
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Mark Miles
Rental Property Investor · Philadelphia, PA · Member since 2016 · 543 posts · 716 votes
3y
Quote from @Luke Carl:
People are going to stop going on vacation. Probably tomorrow.

Couldn’t agree more. And when people do go on vacation, they love hotels. A large family would never want to share a private house. With a private pool, a private hot tub, and a pool table of their own. STRs are toast, sell them all

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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
Yes! Everything is closing!! STRs suck!!

Come on @Adrian Castillo, you can't be serious. Do people stop driving cars because of an accident?
1 Reply
Leslie Anne Morris
Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
3y
Cryptos looking good? (insert fave emoji here)
2 Reply
Brooklyn McCarty
Investor · Member since 2022 · 1k+ posts · 754 votes
3y
This is just the time that the hobby hosts will be separated from the business hosts
3 Reply
Adrian Castillo
OP
Real Estate Consultant · Brandon, FL · Member since 2015 · 66 posts · 27 votes
3y
Quote from @Leslie Anne Morris:

Cryptos looking good? (insert fave emoji here)

I think cryptos were also short-term, I view them as pre-IPO stocks, get in early or else.

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
Not anytime soon, or ever.
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Adrian Castillo
OP
Real Estate Consultant · Brandon, FL · Member since 2015 · 66 posts · 27 votes
3y
Quote from @John Underwood:

Not anytime soon, or ever.

I would agree if you got in very, very early.
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y
Quote from @Adrian Castillo:

Nothing is a guarantee. Many new investors jumped in without really knowing how it works. Some will sink, some will swim. that doesn't mean the death of the entire industry.
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Konstantin GinzburgPro Member
Member since 2021 · 376 posts · 242 votes
3y
I don't think that STRs or MTRs are going by the way side. I think that those markets simply became very saturated so the revenue coming in for newer investors trying to replicate that model has decreased since they have not yet established themselves in that market. There is still a market need for both of those real estate strategies but there will now be competition for those tenants and guests. Some investors will continue to earn a healthy return on their investments while other will not be able to survive. It's unfortunate but that is part of the territory with every business market. Some businesses make it, others don't. The same problems will also occur in the long term rental market if an over supply of rentals saturates that market in the future. I think the best strategy is to keep an eye on the market and shift strategies as needed rather on being fixated on just one strategy within real estate.
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Sarah KensingerPro Member
Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
3y
Not this again! No STR won't ever be a thing of the past, does no one pay attention to the increase in bookings and even users on the OTA's. It's called people are lack a daisy and don't know business sense without someone walking them step by step through it. Not to mention the lack of actually wanting to work and make something with your life that is prevalent these days!
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Blake Novotney
Real Estate Agent · Wilmington, NC · Member since 2021 · 166 posts · 116 votes
3y
The replies here are hilarious LOL. In all seriousness, I am sure a lot of "mom & pop" hosts are feeling the competition right now. So many people jumped in and are just winging it, I really can't see a time where STRs disappear but those who don't continue to evolve will get left behind just like anything else.
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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
3y
MTRs (or better said, no term rentals) are just getting started and will continue to become a larger portion of the rental pool. People want flexibility, mobility, convenience, and automation...including residents, not just travelers. That's why I am building a hybrid hotel/apartment community with automated entry, exit, and communication, on site amenities (pool, gym, laundry, outdoor courtyard with kitchen), located in the shopping and restaurant areas, and adjacant to major transportation corridors. Others are doing this a well...it's the future not the past.
3 Reply
Matthew Masoud
Investor · Orange County, CA · Member since 2014 · 363 posts · 408 votes
3y
Quote from @Adrian Castillo:

I have several clients that are currently earning good returns with STRs & MTRs, on the flip side. I have witnessed where NEWBIEs are having moderate cash-on-cash returns in TAMPA BAY area. Currently, the competition is fierce the girl next door has become the competitor, therefore driving prices down due to a higher competitive inventory.

Will STRs & MTRs become a thing of the past...Thoughts?

I went from 0 to 36 mid-term MTR units in 2 years. We can't keep up with the demand in a tertiary market of Ohio. We started operations in a secondary market in NC and you wouldn't believe the demand.
If you have a STR in the Flordia hot spots where thousands of people did the same you will see a decline in occupancy and rates. It's simple supply and demand.
There are thousands of markets out there that are staving for MTR/STR but there are also a handful of markets that are severely oversaturated and that's going to show in the next 12-24 months.
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Bonnie LowPro Member
Lender · Asheville, NC · Member since 2016 · 1k+ posts · 1k+ votes
3y
I personally don't think these asset classes will ever become a thing of the past. What will become a thing of the past is poor operators. You just can't make it in either MTR or STR with a sub-par property and sub-par operations. If you have a less than ideal location, second hand furnishings, no attention to design or amenities and you don't treat it like a hospitality business your ratings will reflect that. And so will your bookings. People operating their properties like that won't survive. The market is just too competitive. It's not a bad thing for those types of properties and operators to be weeded out (in my opinion). It's not good for the guests and it's not good for the reputation of the good operators. It was too easy to make money in STRs and MTRs over the last several years but as we return to a more normal environment that's no longer the case. You'll have to operate it like a business - a hospitality business. Andy many people aren't aware or capable or willing. A little bit of market retraction will be a good thing all around.
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Zach Edelman
Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
3y
No. Investors just need to realize what they're getting into. Running an LTR is vastly different than running an MTR or STR. Those differences should and need to be understood by any investor looking to enter the STR space.
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Julie Christiansen
Member since 2018 · 1 post · 0 votes
2y
Hi Matthew -
Do you mind sharing the tertiary market in NC that you are looking at? I'm interested in NC as well. Thanks!
Julie

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Jeremy Jareckyj
Real Estate Agent · Salt Lake City, UT · Member since 2020 · 490 posts · 205 votes
2y
No but the market is more competitive .. you have to be a serious STR host.
1 Reply
Matthew Masoud
Investor · Orange County, CA · Member since 2014 · 363 posts · 408 votes
2y
Quote from @Julie Christiansen:

Hi Matthew -
Do you mind sharing the tertiary market in NC that you are looking at? I'm interested in NC as well. Thanks!
Julie

Greensboro
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