Best Market-Entry Strategy for Short-Term Rentals

Investor · Portland, OR · Member since 2021 · 21 posts · 10 votes

I am wanting to start investing in STR acquiring or developing the real estate. I think Bend is a top place for STR as there is multi-seasonal demand and is a city with a lot of growth. Problem here is, apart from the zoning restrictions of STR, purchasing a property is extremely expensive. Day dreaming here, but purchasing land in the Deschutes River Woods / South Bend and developing a cabin with plenty of outdoor amenities would be - a dream. However, land costs are crazy, most lots are going for no less than $400k. So, my question here is, what has been the best way to enter the market? And does anybody have an idea of what the PSF development cost is?

Thank you!!!

2 Reply

17 views

Most Popular Reply

Collin HaysBusiness Member

Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes

Quote from @Patrick Zepeda:

Quote from @Collin Hays:

Aside from the STR restriction situation mentioned by Michael, new construction is going to cost more than buying an existing property 98 percent of the time. Plus, you have the year of downtime while you build, foregoing all of the revenue for that time from a property that you could have purchased.

That is correct. That is why Im looking at doing the whole deal cash only, since financing would bring high carry costs.

Yeah, even with cash, you'd be far better off ROI just buying existing. Not even close.

[email protected]806-672-7102

SMOKY MOUNTAIN FALLS INC.51 Review

Website View Page

1 Reply

See this reply in the discussion

5 Replies

Jump to latestLatest

Sort by

Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
2y
Hey @Patrick Zepeda, I hate to be a negative nelly here but that is a tough area.
We have looked there extensively and now that STRs in the Bend city limits are severely restricted, I would be a bit wary of that expanding to the county.
Sunriver will always be a STR haven but prices are even more there.
We looked at several places in Deschutes River Woods and it is a bit of a crap shoot. The area is rife with well issues, roads can be sketchy...
There aren't many places for sale in that specific area - https://www.zillow.com/homedetails/19077-Choctaw-Rd-Bend-OR-...
That is one place that could work, but you would be looking at 250k to bring it up. They say it might be a tear down...who knows...
Building in the area is pretty high. If you go with a standard home, nothing fancy, probably around $200sqft. Custom would be at least 1/3 more.
You might check farther out from Bend. Maybe down near Three Rivers. There are 1/2 acre lots under 200k there. Maybe La Pine as well? Hard to tell how well they would do.
0 Reply
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
2y
Aside from the STR restriction situation mentioned by Michael, new construction is going to cost more than buying an existing property 98 percent of the time. Plus, you have the year of downtime while you build, foregoing all of the revenue for that time from a property that you could have purchased.
[email protected]806-672-7102
SMOKY MOUNTAIN FALLS INC.51 Review
Website View Page
0 Reply
Patrick ZepedaPro Member
OP
Investor · Portland, OR · Member since 2021 · 21 posts · 10 votes
2y
Quote from @Michael Baum:

Hey @Patrick Zepeda, I hate to be a negative nelly here but that is a tough area.
We have looked there extensively and now that STRs in the Bend city limits are severely restricted, I would be a bit wary of that expanding to the county.
Sunriver will always be a STR haven but prices are even more there.
We looked at several places in Deschutes River Woods and it is a bit of a crap shoot. The area is rife with well issues, roads can be sketchy...
There aren't many places for sale in that specific area - https://www.zillow.com/homedetails/19077-Choctaw-Rd-Bend-OR-...
That is one place that could work, but you would be looking at 250k to bring it up. They say it might be a tear down...who knows...
Building in the area is pretty high. If you go with a standard home, nothing fancy, probably around $200sqft. Custom would be at least 1/3 more.
You might check farther out from Bend. Maybe down near Three Rivers. There are 1/2 acre lots under 200k there. Maybe La Pine as well? Hard to tell how well they would do.

Funny because that is the exact lot I was looking at. In the woods, on the way to Mt Bachelor... perfect location. I guess that is why its expensive. Also, a teardown means even more costs so... But thank you for the expertise!!
0 Reply
Patrick ZepedaPro Member
OP
Investor · Portland, OR · Member since 2021 · 21 posts · 10 votes
2y
Quote from @Collin Hays:

Aside from the STR restriction situation mentioned by Michael, new construction is going to cost more than buying an existing property 98 percent of the time. Plus, you have the year of downtime while you build, foregoing all of the revenue for that time from a property that you could have purchased.

That is correct. That is why Im looking at doing the whole deal cash only, since financing would bring high carry costs.
0 Reply
Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
2y
Quote from @Patrick Zepeda:

Quote from @Collin Hays:

Aside from the STR restriction situation mentioned by Michael, new construction is going to cost more than buying an existing property 98 percent of the time. Plus, you have the year of downtime while you build, foregoing all of the revenue for that time from a property that you could have purchased.

That is correct. That is why Im looking at doing the whole deal cash only, since financing would bring high carry costs.

Yeah, even with cash, you'd be far better off ROI just buying existing. Not even close.
[email protected]806-672-7102
SMOKY MOUNTAIN FALLS INC.51 Review
Website View Page
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.