Updated about 2 hours ago on . Most recent reply
STR Experience - Challenges in building passive cash flow
Just figured I'd share my STR experience for the last year in case others can learn from it.
In June of 2024 I purchased an active, furnished STR property. It had a year+ history averaging $10k+/mo revenue. Did all my math and calculated that I should easily be able to cover expenses and cash flow $1-2k per month. Property Manager stayed with it (15% Fee). Very shortly thereafter we had a disgruntled neighbor start complaining. Got the property de-listed from AirBnB several times. Switched Property Managers in Feb 2025 (see below). New PM has been able to appease the neighbor, but we're not doing better than $5k/mo revenue. Can't figure out how to adjust to get back to historical levels.
In September 2025 PM convinced me to invest in a duplex STR arbitrage unit. I fronted $60k for deposit and furnishings. Property never met revenue projections and often didn't even cover rent. PM evidently ran into cash flow problems and stopped paying rent without informing me. Owner confiscated furnishings and deposit. Have been trying to get PM to provide some kind of settlement with no luck. Arbitration with attorney fees is estimated to be another $50k+. Case is very solid, but even if I get a judgement in my favor, it's unlikely the PM has assets or funds to pay. Currently looking for an attorney that will handle on contingency (suggestions welcome) but expect this will be a total loss.
In October 2025 I purchased another active, furnished STR property. Again did my math and cash flow looked healthy based on historical revenues. Needed foundation repairs (covered by seller), and pressure test passed. A month after close, pipe leaks because of the repair surfaced. Another $10k out of pocket to address. I hired a different PM for this property. She was extremely helpful in coordinating repairs and startup (homes are in Dallas, I'm in Houston). Took several months to get to semi-steady state. Looks like I'm about break even on this one now.
I don't regret the experiment. Not sure what I could have done differently. Just have unexpected things break against you sometimes.
I do have a question for the community. I'm considering cutting my losses on the first property but I don't know what I'd do with the furnishings if it was purchased by an individual rather than an STR investor. Any suggestions appreciated.