How much cashflow do you make with your STR?
Hi All, I have been doing due diligence on buying a short term rental in NH. Most information I have come across show they make more cashflow on average then the LTR model.
I would love to hear from some current STR investors and hear about your personal experience. How much cashflow do you make on your STR and what should I expect?
STR Cash flow has relatively decreased as compared to 2 to 3 yrs ago. Honestly I'm new to it but so far is not proving to beat my other LTRs cash flow.
Cash flow is going to depend on so many factors! The biggest is management.
#4 Short-Term & Vacation Rental Discussions Contributor
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#4 Short-Term & Vacation Rental Discussions Contributor
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Quote from @Mohammed Bala:All depends on how much debt you’re paying for.
STR Cash flow has relatively decreased as compared to 2 to 3 yrs ago. Honestly I'm new to it but so far is not proving to beat my other LTRs cash flow.
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#1 Short-Term & Vacation Rental Discussions Contributor
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We bought in 2017 when the market wasn't on fire and we do above 20%. That is not the norm now.
Each deal is different. Do some underwriting! I have a video on YouTube with how to underwrite the metrics.
30%+ but we do better than 95% out there.
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#3 Short-Term & Vacation Rental Discussions Contributor
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There are so many variables out there, I have some houses valued at $400k that I bought for $100k + $50k rehab 6 years ago that cashflow $2,000 a month. I have some that do worse, and some that do better. In many markets it is hard to pay retail and turn a profit, however it is still possible in some markets in FL
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These answers won’t tell you much of anything about your situation. Those that timed the market well before the maturation of STRs when interest was cheap will have vastly different financials that one buying today.
Broadly speaking, anyone that says it’s passive income, or that touts replacing their W2 income in a short time span is either lying, or in the top top of their class. Real estate has always been a get rich slow technique for most. I don’t necessarily think STRs are a shortcut, despite being a fan of them.
We bought in late 2022 (we weren’t naive to the market dynamics/timing, we simply finally had the down payment at that time and it serves as our vacation home as well).
We put 10% down and probably cash flow $500/mo, but hard to fully say as we are just now entering busy season. Even at that, we are outperforming our peers in the market by a solid 20 pts on occupancy
It depends on a lot of factor such as how much you are paying for mortgage, management, etc. But technically speaking, you will need to gross 15% of the property's value to make good cash flow. For example, a $500,000 home will need to bring in at least $75,000 in rental income per year. You can check all this stuff on AirDna and analyze how the competitors are doing nearby.
@Christopher Lynch
Man numbers are all over the board. I have properties cash flowing anywhere from 20k-150k per year. The ones on the lower end of the spectrum I bought years ago and cash flow has lowered a decent amount since 2020. The ones on the higher end I spent a significant amount of upfront money to create a a high end vacation rental. In this market, if you want to make make big money you have to be willing to spend big.
Depends on a bunch of factors. What I'd recommend is using a service such as Revedy to underwrite and figure out rough cashflow numbers for specific markets/addresses.
