Cash Flow + Appreciation STR Markets?

Question

Hello BP,

Wondering where people are picking up their next STR in today's market and why?

Are there any vacation markets that have strong appreciation potential and cash flow that I can look into?

Please share :) Thank you!

Dan H. · Answer

I am mostly targeting properties that are special.  Example would be private beach access, located on navigatable river, located close to NP entrance.

Private beach access is a limited feature.   It is virtually impossible to create more.  Many states do not allow private beach access.

Similar for properties on rivers and large lakes.

It may be possible to build more units near NP entrance, but what if you purchase below replacement cost?   If there is a shortage, price increase to building cost seems likely.

Good luck

Hasan Gabareen · Answer

Honestly, I’ve started believing that the best STR markets are usually the ones that still make sense even if the property eventually has to operate as a long-term rental.

A lot of people chase the highest Airbnb revenue projections, but personally, I feel safer looking at markets where there’s still underlying population growth, job growth, and everyday housing demand behind the tourism.

For example, markets like Orlando still interest me because there’s a real local economy and population growth supporting the area outside of Disney tourism alone. Same with parts of Colorado, Arizona, and Tennessee, they’re places people are actively moving to, not just visiting.

I also think unique properties matter more now than they did a few years ago. Properties near national parks, waterfronts, mountain views, walkable downtowns, or experiences that are difficult to replicate tend to stand out much more in today’s STR environment.

At the same time though, I’ve personally found it difficult to find markets that perfectly balance both strong appreciation and strong cash flow. Usually one side is stronger than the other, so a lot comes down to your goals and risk tolerance.

If I were buying today, I’d probably focus less on “the hottest STR market” and more on areas where:

• people are consistently moving,
• tourism is durable,
• regulations are reasonable,
• and the property could still survive as a solid long-term rental if the STR market softened.

That’s just the framework that has made the most sense to me while researching markets recently.

Hasan

Jorge Vazquez · Answer

Honestly I’ve been doing really well lately with corporate rentals in Tampa. We’ve been keeping them occupied almost all the time and a lot of the properties aren’t even in the hottest areas. I think too many people only focus on vacation STRs, but there’s a ton of demand from traveling nurses, relocations, insurance stays, and business travelers. The cash flow has been a lot more steady for us because it’s not tied only to tourism seasons.

Bill B. · Answer

At least a couple “STR experts” I’ve heard on podcasts lately start with this idea…

Name all the famous places people think of when thinking STR. Orlando, smokies, Hawaii, etc…NOT THERE…

The idea being you have to compete with established, well run, experienced local hosts, som3 of whom are using their properties as vacation homes and don’t care if they turn a profit.

I on the other hand would want it to work as a LTR or have a decades long history of the local community wanting/needing the Vacationer’s dollars to fuel their economy, where you won’t get outlawed the next week/month/year.  You could check some of the hot markets from 2020’s like the smokies that are “correcting” but you might still be a year early.

Please be careful with anything that doesn’t work as at least MTR if not LTR if you can’t afford to lose thousands/10’s of thousands. It’s a lot closer to a business than an investment.  GL.

Jon Martin · Answer

Agreed, my first 2 purchases were in this type of market and the occupancy is pretty solid year round and throughout the week. Theses areas also tend to work as furnished corporate aka "midterm" markets. It's nice to have exit options, although your upside as an STR is generally capped compared to true vacation markets.

John Racine · Answer

Honestly, there are hidden gems everywhere, including in your backyard in most cases. It often goes neighborhood by neighborhood like a single family rental. You would do really well to identify 1 or 2 you like and go deep on the data. I am focusing on a couple of markets for buying but for my management/co-hosting, I go over a wider geography which also helps me spot places to look.

Andrew Steffens · Answer

I am still finding profitable STR's for my investors in the greater Tampa market.

One just listed yesterday for $875k with $153k gross income, sold turnkey.

Nick Sansivero · Answer

Hey @JooYung Choi do you have a general area (state/city) you’re thinking about? I can check Tenantry.ai for you to help narrow down a few markets with the highest potential for cash flow and appreciation

John Underwood · Answer

Anyplace where it's allowed and the numbers work.

Mike Grudzien · Answer

I agree with John.  I will add that it depends on your goals first, then price range and finally your experience and ability to deploy successfully.

Cash Flow + Appreciation STR Markets?

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