My Worst Str

[Sherylyn Holden]

The title says it all. Here I'll deep dive the financials on my worst performing STR

Location: 78203 Zip Code/Eastside San Antonio, Texas (Denver Heights)

Type: Single Family Home

Built: 1938 (Fully remodeled in 2021)

Beds: 5 (1 King and 2 Queens and 2 Twin)

Bath: 2 Full

Square Feet: ~1600

HOA: No

2025 Financials

Revenue: $35,826

Mortgage(PITI): $29,204

Cleaning Fees: $10,582

Management Fees: $2,346

Repairs: $1,669

Supplies: $1,069

Internet: $978.27

Electricity: $3,128

Water: $472

Hotel Tax: $1,540

Net Cash: –$15,162.27 (If we factor in principal paydown on the loan, this may be closer to -$10k)

Occupancy rate is about 35%

This home sucks. We bought this home in 2020 and did a FULL gut remodel (electric, plumbing, foundation, roof, the whole nine yards). We had no clue what we were getting into and it was our first rehab ever. Our intent was to do a STR BRRRR. Rehab costs were higher than anticipated and rehab took almost a year - go figure! (We were starry eyed newbies!) In any case, we felt this area was a good speculative investment with many other old homes being rehabbed in the area.

Why I think this property underperforms
This home is not in a very “nice” area. Common trends in our reviews are that the area feels unsafe and shady (I actually had someone break in during our rehab and set off some firecrackers in the home, almost starting a fire!) There are a LOT of STRs in this area which made me try to lower my nightly price to compete. This is not a luxury home. While it does have a decent number of beds and is a clean space, it is a smaller home and the area and surplus of STRs in this area makes it hard to effectively stand out.

I’m sure some hosts in this area can succeed but I have struggled to find my footing in this area. I tried to have a property manager run this home for part of the year but we shifted back to self managing to lower our costs.

What’s next
2025 was the worst year for this home. It mostly broke even in years past which still isn’t great but helped me weather the storm. I was riding the speculation wave hoping this area would boom more. I think it may be time to try to sell this home and shift. I’m weighing refinancing this to lower my monthly cost (but I have a 5 year prepayment penalty that would hit), moving this to a LTR to stabilize and minimize the losses hopefully, or sell. TBD!

All in all, I’ve learned a lot from this property on what not to do which is invaluable. Learning from the school of hard knocks is the best way, right? I know it’s not fun talking about our failures but I hope this helps and feel free to ask me any questions. I’m an open book!

[John Underwood]

Cleaning should be a pass through. Therefore its not really income or an expense.

How much are you paying your cleaners per clean? based on your annual cleaning number you may be able to get cheaper cleaners.

Have you looked at sucessful STR'S in your area and see if you can get any ideas to copy?

If you keep getting bad reviews about people not feeling safe then its probably time to convert to a LTR or cut your losses altogether and sell.

Have you run the numbers to see how a LTR might do? If it t least breaks even if might be worth keeping as a LTR. You would get the tax benefits as well as mortgage paydown.