100K in Short Term Rental Income for 500k Purchase

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100K in Short Term Rental Income for 500k Purchase

Matt Schreiber
New to Real Estate · NY · Member since 2020 · 72 posts · 42 votes

Hi Everyone, I wanted to reach out and maybe hear from realtors or investors who feel like it is possible to get 100k in rental income for around a 500k purchase in their market. I personally invest in Panama City Beach, Pawleys Island, Tybee Island, Asheville and Avon, NC. The only one out of those markets that has some potential to hit those numbers is Avon, NC but I would say that is a stretch. I think 500k can get you around 70k with the right property in Avon but that is probably the max. The other markets not really possible or close. I had been looking in Blue Ridge, Bryson City and Gatlinburg but also looks like not even close. Recently I've been making offers and found these two properties right around 500k that each did over 100k in rental income last year. The first one has an HOA that is changing the rules to not allow Short Term Rentals anymore and the second one had 6 offers and I didn't get it. It seems like these big houses or lakefront houses have the potential to do those types of numbers and are still affordable enough in just a few markets but I was curious if anyone was seeing these types of possibilities in their market or in the markets they invest or work in.

https://www.zillow.com/homedetails/189-Headwaters-Rd-Valley-...

https://www.zillow.com/homedetails/6049-Boardwalk-Dr-Tobyhan...

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Ryan MoyerBusiness Member
Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 996 posts · 1k+ votes
3y

These days it's more about finding the right deal than the right market.  It's not like it was a few years ago where you can just waltz into a market with a $500k pre-approval and guarantee yourself $100k income.  Any market where you can do that nowadays likely has some major risk looming overhead regarding potential future regulations or something that is scaring investors away (which I hear people worrying about sometimes regarding the Poconos, where one of the houses you linked was).

What IS still possible is finding a specific deal that will meet those metrics, or CREATING a deal that will meet those metrics (through value-add, etc). This is more in line with typical/traditional real estate investing that likely brought most of us to BP in the first place. In real estate, it's not as easy as just pulling up the MLS, clicking a random link, and getting an awesome property that cash flows amazingly. Deals are out there, they just have to be found. STR was an exception to that for a while when it was unknown and considered risky, but now that it's a legit asset class like LTR SFH or Multifamily etc and the secret is out, it's much more in line with traditional real estate where it's more about the deal than the market.

All imo, of course.

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  • Ryan MoyerBusiness Member
    Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 996 posts · 1k+ votes
    3y

    These days it's more about finding the right deal than the right market.  It's not like it was a few years ago where you can just waltz into a market with a $500k pre-approval and guarantee yourself $100k income.  Any market where you can do that nowadays likely has some major risk looming overhead regarding potential future regulations or something that is scaring investors away (which I hear people worrying about sometimes regarding the Poconos, where one of the houses you linked was).

    What IS still possible is finding a specific deal that will meet those metrics, or CREATING a deal that will meet those metrics (through value-add, etc). This is more in line with typical/traditional real estate investing that likely brought most of us to BP in the first place. In real estate, it's not as easy as just pulling up the MLS, clicking a random link, and getting an awesome property that cash flows amazingly. Deals are out there, they just have to be found. STR was an exception to that for a while when it was unknown and considered risky, but now that it's a legit asset class like LTR SFH or Multifamily etc and the secret is out, it's much more in line with traditional real estate where it's more about the deal than the market.

    All imo, of course.

    Cosmic Vacations4.9175 Reviews
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  • Mitch Davidson
    Lender · Asheville, NC · Member since 2020 · 463 posts · 507 votes
    3y

    Sage points, @Ryan Moyer. Agreed that you can make many properties produce $100K if they're standout and different enough, sometimes regardless of location. I would add that appreciation is a major issue too. It might be worth taking on a property with $30K less per year income potential if the appreciation opportunity is noticeably better. To that point, properties in the greater Asheville market will appreciate much more aggressively than some of the other markets mentioned. And they're less seasonal than lakefront (in part because many lakes are drained for the winter) or ocean. 

    0Reply
  • Kyle Wise
    Member since 2019 · 30 posts · 32 votes
    3y
    Quote from @Mitch Davidson:

    Sage points, @Ryan Moyer. Agreed that you can make many properties produce $100K if they're standout and different enough, sometimes regardless of location. I would add that appreciation is a major issue too. It might be worth taking on a property with $30K less per year income potential if the appreciation opportunity is noticeably better. To that point, properties in the greater Asheville market will appreciate much more aggressively than some of the other markets mentioned. And they're less seasonal than lakefront (in part because many lakes are drained for the winter) or ocean. 

     Good point @Mitch Davidson but from my understanding Asheville doesn't allow STRs. I did however, hear they're trying to pass a bill to allow them in the future. Do you have any knowledge if it will pass or not? 

    1Reply
  • Mitch Davidson
    Lender · Asheville, NC · Member since 2020 · 463 posts · 507 votes
    3y

    Hey @Kyle Wise. My point was really about greater Asheville, meaning a 30-45 minute radius. I know people that still hit over $100K revenue this year in Fletcher, Marshal, and Lake Lure, for example. Regarding Asheville proper, about 2/3 of Asheville is inside city limits. Therein you cannot STR an entire home, nor entire ADU, and can only do a homestay (meaning STR out part of the home you reside in). I'm doubtful that Asheville's regulations will change. They're long-established. And as a resident inside city limits myself I don't much mind them. If anything, I think we'd have a race to the bottom if the rules were eliminated.

    2Reply
  • Matt Schreiber
    OP
    New to Real Estate · NY · Member since 2020 · 72 posts · 42 votes
    3y

    @Ryan Moyer Yeah I agree about it being deal specific. My point was mostly, you could say if you find something in the Poconos that's Lakefront with decent amenities, it can do around 100k and those properties are pretty close to 500k in that market. I spoke with another investor the other day who said the Lakefront 4 bedrooms in Hot Springs, Arkansas can do around 100k but those are closer to 600k. I was trying to see if anyone had examples of a certain type of property in their market that could reach those kinds of numbers around that price point. The mountain markets seem to be 50 or 60k for a 500k house but would love to hear from anyone who is seeing better numbers with a link to their Airbnb. 

    1Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    We looked at Hot Springs, AR and for lakefront, you have to really be careful as there are pockets of restrictions on STRs on the lake.

    I think what you are saying is doable, but it will take a lot of work.

    0Reply
  • Kyle Wise
    Member since 2019 · 30 posts · 32 votes
    3y

    @Matt Schreiber I've been looking for similar returns in the same price point but I think those days are past us. Can it be done, sure but to me it seems unlikely unless you infuse a ton of cash to create some truly unique amenities. 

    0Reply
  • Brian Barch
    Member since 2022 · 272 posts · 253 votes
    3y
    Quote from @Matt Schreiber:

    @Ryan Moyer Yeah I agree about it being deal specific. My point was mostly, you could say if you find something in the Poconos that's Lakefront with decent amenities, it can do around 100k and those properties are pretty close to 500k in that market. I spoke with another investor the other day who said the Lakefront 4 bedrooms in Hot Springs, Arkansas can do around 100k but those are closer to 600k. I was trying to see if anyone had examples of a certain type of property in their market that could reach those kinds of numbers around that price point. The mountain markets seem to be 50 or 60k for a 500k house but would love to hear from anyone who is seeing better numbers with a link to their Airbnb. 


    in many of the mountain markets, you have to have size, I’d say the ability to sleep 14+ to do 100k. 

    Ironically, In my market, I almost think you’d have a better shot of doing $200k for a $1M cabin than you would $100k for a $500k home if that makes any sense. 

    I do about $55k on a $320k cabin and I’m super happy with that.


    I also think if you bought land and built the right kind of home (container, treehouse, etc) you might be able to achieve this. 

    1Reply
  • Matt Schreiber
    OP
    New to Real Estate · NY · Member since 2020 · 72 posts · 42 votes
    3y

    @Brian Barch Nice that's great. Which market is that? 

    0Reply
  • Sarah KensingerPro Member
    Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
    3y

    I know if you look hard enough deals like this can be found. Not so much an area, but more so just the right property in the right location. I have underwritten so many STR deals across multiple states since everything has changed with the interest rates etc., and I've only come across one property that was around $350k and would have made nearly $100k.

    If you have areas in mind just keep looking closely at the MLS, with enough patience you'll probably find a similar deal. Just be ready to move quickly since they usually don't last long!

    [email protected]330-557-3021
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  • Michael CravenPro Member
    Investor · Springfield, OH · Member since 2017 · 202 posts · 150 votes
    3y

    Speaking for Blue Ridge, we had a hard time hitting 100k gross rents for our 4-bed. 
    We had a pretty traditional cabin which seems to be a favorite for Blue Ridge-Goers. I know some investors were able to surpass that figure, though. We definitely could have done better managing/optimizing/marketing which in today's market plays a HUGE role in how a property performs. 

    937-207-5010
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  • Travis TimmonsPro Member
    Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
    3y

    It's possible if you are willing to purchase an inconvenient or hassle filled property. There are some off the beaten path areas that present a geographic challenge for most. As margins have tightened or disappeared in more popular markets, investors have scattered to lesser known pockets of the country. The easy money is gone in most of those places, but you may be able to find corners of the US that have not seen as much out of town money come in due to the remote nature or lack of a good airport nearby. Places like the upper peninsula of Michigan, parts of Alaska, lake towns in Northern Wisconsin, etc. 

    Outside of that (from my vantage point, which is certainly not universal), you have to take on a project to get those types of returns in today's market.

    3Reply
  • Mitch Davidson
    Lender · Asheville, NC · Member since 2020 · 463 posts · 507 votes
    3y

    The STR's uniqueness is the biggest issue in my opinion, with location being close second. If you have a great cabin in Gatlinburg, for example, it might be unique to you the owner because you live in suburbia, but it's not unique to Gatlinburg, and thus your returns likely won't be exciting. I've found it to be similar regarding my cabin in Bryson City. If instead your place is one of the only properties in that area that's ____, and it's also unique to folks in suburbia, you've likely got a winner. The challenge though is how to make it unique without creating something that you can't cashout or sell to someone who wants to use traditional financing. Meaning, if it can't appraise due to similar comps you don't have a good path to getting your equity out, which is a deal killer in my opinion. A container home is a good example. You'll be limited to cash buyers when you sell. If instead you buy an existing home and install a heated pool, now you've got something where you can recoup the investment. But perhaps the pool, or whatever unique aspects you create, is more hassle than you have time or patience for.

    5Reply
  • Matt Schreiber
    OP
    New to Real Estate · NY · Member since 2020 · 72 posts · 42 votes
    3y

    @Travis Timmons Thanks for your insight. Any ideas of the names of a few towns in the Upper Peninsula of Michigan or the Lake Towns in Northern Wisconsin where you think there is opportunity? 

    0Reply
  • Nathan M kiefer
    Rental Property Investor · south carolina and michigan · Member since 2023 · 348 posts · 226 votes
    3y
    Quote from @Matt Schreiber:

    Hi Everyone, I wanted to reach out and maybe hear from realtors or investors who feel like it is possible to get 100k in rental income for around a 500k purchase in their market. I personally invest in Panama City Beach, Pawleys Island, Tybee Island, Asheville and Avon, NC. The only one out of those markets that has some potential to hit those numbers is Avon, NC but I would say that is a stretch. I think 500k can get you around 70k with the right property in Avon but that is probably the max. The other markets not really possible or close. I had been looking in Blue Ridge, Bryson City and Gatlinburg but also looks like not even close. Recently I've been making offers and found these two properties right around 500k that each did over 100k in rental income last year. The first one has an HOA that is changing the rules to not allow Short Term Rentals anymore and the second one had 6 offers and I didn't get it. It seems like these big houses or lakefront houses have the potential to do those types of numbers and are still affordable enough in just a few markets but I was curious if anyone was seeing these types of possibilities in their market or in the markets they invest or work in.

    https://www.zillow.com/homedetails/189-Headwaters-Rd-Valley-...

    https://www.zillow.com/homedetails/6049-Boardwalk-Dr-Tobyhan...


     I own 2- 4 bed/4 bath homes in ocean lakes, myrtle beach sc. purchase on one was 295k in covid, the other was $375k with elevator- stole them both and we average 72k per house on those.

    100k on 500k is doable in the right area.

    We love ocean lakes as it is on leased land but zoning will never disallow str. 

    0Reply
  • Matt Schreiber
    OP
    New to Real Estate · NY · Member since 2020 · 72 posts · 42 votes
    3y

    @Nathan M kiefer Thanks for your response. I've actually looked in there before. Can you get traditional financing on those? 

    0Reply
  • Travis TimmonsPro Member
    Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
    3y

    @Matt Schreiber Munising, MI - Pictured Rocks National Lakeshore being the main attraction, Cheboygan/St Ignace - Mackinaw Island being the main attraction. 

    Places near the "ski towns" of MI and WI aren't bad either. Something like Boyne City, or close to the ski resort and lake, that will get a nice winter busy season but also is a summer destination. I've kicked around towns near Arcadia Bluffs as well. It's a bucket list golf course with a low median home price in the area. Sourcing cleaners and vendors look to be challenging though.

    I realize that those are not all on the UP, but they are in an overlooked part of the country for a lot of investors.

    As for WI, I have not looked closely anywhere other than Baraboo/Wisconsin Dells, which would get you close to those numbers the last time I looked. I've researched MI far more that WI.

    I've looked at both in great detail but opted to keep my STR focus to 1 market (coastal Maine near Acadia National Park). They're a small to medium hassle to self manage at a distance. I also believe that you need to visit your properties regularly, and keeping it to 1 market makes that cheaper and easier for me. Not throwing stones at folks that invest in multiple markets - just personal preference to keep it focused on 1 STR market. It works both ways if done properly.

    1Reply
  • Nathan M kiefer
    Rental Property Investor · south carolina and michigan · Member since 2023 · 348 posts · 226 votes
    3y

    @Matt Schreiber

    You can get financing there are a few banks but its mostly cash investors, there is a lot of money in that development. 

    we purchased our first one all out cash, the second we pulled a heloc (as well as about 125k in cash)on our primary residence(we werent planning to buy the second one but I worked the deal on it and we couldnt pass it up. they are both are 4 bed 4 bath stilt houses but the second we bought for 375k and i got the owner to carry a 3 year note for 4% on 50k as well. That house has a elevator and is currently worth around 650k..

    after we closed on the property we then did a refi on our portfolio which now holds that leverage and gave us back our 200k heloc for further investments

    0Reply
  • Nathan M kiefer
    Rental Property Investor · south carolina and michigan · Member since 2023 · 348 posts · 226 votes
    3y

    @Matt Schreiber

    Also, just reviewed the listings you put in your initial post.

    A rule I will go to the grave with is same bathrooms as bedrooms. 

    for the highest success rate you have to have a minimum of the same amount of bathrooms as bedrooms. This is the most overlooked item in my opinion in STR investing...

    2Reply
  • Matt Schreiber
    OP
    New to Real Estate · NY · Member since 2020 · 72 posts · 42 votes
    3y

    @Travis Timmons Nice! Do you have links to your Airbnbs in Maine. I'm looking to go there this summer. 

    0Reply
  • Brian Barch
    Member since 2022 · 272 posts · 253 votes
    3y
    Quote from @Matt Schreiber:

    @Brian Barch Nice that's great. Which market is that? 

    Rabun county ga
    0Reply
  • Henry T.
    Member since 2022 · 1k+ posts · 1k+ votes
    3y

    I sold a property in a tourist area for near a million. The buyer quickly turned into an STR. I was happy to see his $$$ success. Two years later STR's in the area were made illegal. Just saying, make sure you have an LTR backup plan. His LTR makes nowhere near what the STR was doing, nor can it cover loan costs.

    1Reply
  • Matt Schreiber
    OP
    New to Real Estate · NY · Member since 2020 · 72 posts · 42 votes
    3y

    @Henry T. which area was that? 

    0Reply
  • Tim VandenToorn
    Real Estate Professional · Rockford, MI · Member since 2015 · 301 posts · 138 votes
    3y

    @Matt Schreiber I just sold a short term in Boyne, Michigan.  8 minutes from the ski hill right in the City by the water.  Completely remodeled hot tub etc.  It did 35k last year which was not enough to pay for the expenses, but the appreciation was nice. Boyne City is also looking at short-term restrictions. FYI

    0Reply
  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 4k+ posts · 3k+ votes
    3y

    I am not sure about those markets specifically but I did see you invest in Panhandle.  I consider myself to be an expert in the Tampa market and very knowledgeable about most (major) markets in FL.  The best returns I am seeing are in the greater Tampa area as a whole and most are 13-17% gross at the $500k price point i.e. $65k-85k.  Occasionally I will see one hit 20%+.

    [email protected]813-563-0877
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