Investor · Houston, TX · Member since 2022 · 12 posts · 6 votes
My wife and I are searching the markets in Texas to purchase our first STR. As we search, the numbers Pricelabs is showing for revenue and occupancy are just not there. We have looked into Canyon Lake, Buchanan Dam, Leander, Comfort, New Braunfels, Lago Vista and we are not liking what we see. The seasonality of the areas are really killing things.
Any recommendations for areas we should really consider? We're looking for occupancy over 50% and an annual revenue of $40k+ minimum. Any help would be appreciated. Thanks!
Rental Property Investor · Houston, TX · Member since 2021 · 11 posts · 10 votes
3y
@James Breese hi James! I was in the same boat as you about 4 months ago. In March we closed on a house in Fredericksburg (shout-out to @Stacey Lancaster for being an awesome realtor). I can only speak towards Fredericksburg since that’s the area we zeroed in on, but your goals are definitely possible. Heck, our place alone had a revenue of 92k the year before we purchased. That being said, I still believe they were priced inefficiently, especially during the week days.
Now onto occupancy. I really don’t think you should look at that number. We have constantly been over 50%, but like @Avery Carl mentioned, it’s an extended weekend destination. Almost all our bookings are Thurs - Sun and that’s where we make our money. Outside of holidays or eclipses (April 8-9th next year), we lower our prices quite a bit to get it booked during the week. That being said, we are on target to surpass the revenue numbers from last year.
One piece of advice with Fredericksburg is to buy a house that has a STR permit because they are getting harder to get. Ours had a permit but we still had some issues with getting past the code due to new restrictions on fire places and string lights (nothing crazy).
Side note, I stayed at an Airbnb in dripping springs this weekend. Great area and I would look into it as well. My only thing is that IMO there isn’t as much around compared to Fredericksburg where the wineries and enchanted rock are the big draws
Real Estate Agent · USA · Member since 2016 · 909 posts · 1k+ votes
3y
Some of those areas can be really good actually. The hill country is by nature a long weekend destination. You should have better than 50% occupancy but almost all markets have a high and low season. You just have to look at the annual income and determine if it makes sense.
Investor · Houston, TX · Member since 2022 · 12 posts · 6 votes
3y
@Stacey Lancaster We are using AirDNA for a quick analysis and then Pricelabs when we feel it is worth spending the little bit of money to further analyze .
We thought some of those areas would be better than 50%, but Pricelabs has been spitting out low 30s. Definitely understand that the occupancy rates are going to be better than what is shown, but it raises a yellow flag and causing some hesitance pulling the trigger. We're not the type to have analysis paralysis, as we have bought and sold multiple properties. We just like to ensure we do our due diligence.
Investor · Houston, TX · Member since 2022 · 12 posts · 6 votes
3y
@Avery Carl We love Hill Country and has been tops on our list. We're understanding of the highs and lows, but there is a huge swing that is causing some concern for us. May be just a newbie fear, so hearing from anyone that has experience in those areas will probably put us at ease. Appreciate the feedback.
Rental Property Investor · Houston, TX · Member since 2021 · 11 posts · 10 votes
3y
@James Breese hi James! I was in the same boat as you about 4 months ago. In March we closed on a house in Fredericksburg (shout-out to @Stacey Lancaster for being an awesome realtor). I can only speak towards Fredericksburg since that’s the area we zeroed in on, but your goals are definitely possible. Heck, our place alone had a revenue of 92k the year before we purchased. That being said, I still believe they were priced inefficiently, especially during the week days.
Now onto occupancy. I really don’t think you should look at that number. We have constantly been over 50%, but like @Avery Carl mentioned, it’s an extended weekend destination. Almost all our bookings are Thurs - Sun and that’s where we make our money. Outside of holidays or eclipses (April 8-9th next year), we lower our prices quite a bit to get it booked during the week. That being said, we are on target to surpass the revenue numbers from last year.
One piece of advice with Fredericksburg is to buy a house that has a STR permit because they are getting harder to get. Ours had a permit but we still had some issues with getting past the code due to new restrictions on fire places and string lights (nothing crazy).
Side note, I stayed at an Airbnb in dripping springs this weekend. Great area and I would look into it as well. My only thing is that IMO there isn’t as much around compared to Fredericksburg where the wineries and enchanted rock are the big draws
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
Hey @James Breese, you need to see the whole picture like @Avery Carl said. Just because you have 50% occupancy doesn't mean you can be profitable.
It all comes down to purchase price and amenities. How well it is setup after the purchase vs what others are doing in the area will help get your nightly rate.
If you just look at the downtime and not look to optimize the uptime, you will never buy anything.