New York, NY · Member since 2017 · 144 posts · 75 votes
Hi,
I have 6 airbnbs in nyc, and am looking to begin buying my first property- potentially w FHA loan. I'd like to buy a 4-plex, live in one to start, and manage/ airbnb out the other 3, in a solid airbnb market.
Does anyone have any recommendations for good cities for this type of model? I'd say Nashville, but it seems like it's overbought and perhaps airbnb renters look for larger houses given the bachelor party crowd. I'd be looking more for 4 units each which can accept 6 guests (2 bedroom plus common space pullout sofa). Any ideas for how to find a property like this or any other thoughts would be appreciated.
Investor · Nashville, TN · Member since 2015 · 688 posts · 607 votes
8y
@Alex M. is incorrect in stating "not currently issuing permits due to an overload on the market." Nashville is still issuing type 1, 2, and 3 permits. Type 1 is owner occupied. If you lived in one of the units, you can STR the other 3 under an owner occupied permit. They are also classifying anything 3 units and up with commercial zoning a type 3 permit, so you could STR the property without living in any of them. If you don't have the commercial zoning, it falls under type 2, so you have options.
You just have to have a 1,000,000 insurance policy, notify all "adjacent" properties, sign an affidavit, prove you own the place, designate a manager, pay for a permit
In my opinion, it's a great place to STR if you can navigate the regulation. A lot of investors are flocking the market because of the regulation, which means a lot less supply. All of our units have seen a $100 a night increase in price due to the reduction of supply. Demand is still higher than ever
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
8y
I'm probably the only person on this website that specifically rents STRs to full time working people. Full time is 50-84 hours/week. They are all contractors working at a local refinery.
Perhaps you can find a smaller town with a large industrial or institutional employer and set up shop with your 4-plex? I know big cities with universities or hospitals, these STRs are common and you would have competition. So try to find a smaller town with a big employer that brings in people from far away to work temporary jobs.
You might consider Galveston. There are several refineries there plus it is a tourist location. Look on Craigslist to see what your competition is like.
You might consider Las Vegas. They are building a 1.8 billion dollar stadium there.
You might consider Humboldt Tennessee. Tyson was considering 2 locations in Kansas to build a 320 million dollar chicken processing facility (my town being one of them). They chose the Tennessee location instead. I felt pretty deflated after hearing that news about 4 weeks ago, I normally make rent of 1/10 of 1% of the project cost whenever there is something big. The construction should begin in the spring of 2018 and finish sometime in 2019. When it's complete, there will always be maintenance that needs to be done. Those are your prospective tenants.
Real Estate Agent · Sevierville, TN · Member since 2015 · 1k+ posts · 1k+ votes
8y
Nashville is not currently issuing permits to short-term rentals due to an overload on the market. While it's a fantastic city, you don't want to invest there for STR right now.
If you plan to live in one of the units, your first approach should probably be what location is best for YOU? Start there and make a list of cities you want to live in (at least long enough to satisfy the FHA requirements), then research the STR rules & regs for each, then the overall market, then pin down the best neighborhood.
@Paul Sandhu has some excellent advice, and his niche that caters to blue-collar short-term workers is not nearly as crowded as the more traditional STR space. Though I would caution against Las Vegas, as LV also has very strict STR rules (and a lot of competition).
I've considered a similar model for myself, but since I live in Los Angeles (and my W-2 job needs me to stay there, for the most part), it's not particularly viable. Best of luck to you!
Investor · Nashville, TN · Member since 2015 · 688 posts · 607 votes
8y
@Alex M. is incorrect in stating "not currently issuing permits due to an overload on the market." Nashville is still issuing type 1, 2, and 3 permits. Type 1 is owner occupied. If you lived in one of the units, you can STR the other 3 under an owner occupied permit. They are also classifying anything 3 units and up with commercial zoning a type 3 permit, so you could STR the property without living in any of them. If you don't have the commercial zoning, it falls under type 2, so you have options.
You just have to have a 1,000,000 insurance policy, notify all "adjacent" properties, sign an affidavit, prove you own the place, designate a manager, pay for a permit
In my opinion, it's a great place to STR if you can navigate the regulation. A lot of investors are flocking the market because of the regulation, which means a lot less supply. All of our units have seen a $100 a night increase in price due to the reduction of supply. Demand is still higher than ever
Flipper · Palm Desert, CA · Member since 2017 · 4 posts · 2 votes
8y
Hi Noah,
Consider Coachella valley in California which main cities are Palm Springs, Palm Desert, Indian Wells, La Quinta, Rancho Mirage, Joshua Tree. We have a very strong short term rental market here with lots of snow birds coming out Jan thru March and we have big events in March and April (Tennis tournaments, Coachella, Stage Coach, etc.). The weather keeps the weekend Airbnb market strong with locals from San Diego and Los Angeles all through summer.
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
8y
I don’t know why I bother posting wen Julie McCoy and Paul Sandhu are already on the case. Devan Mcclish is a big fish here in Nashville and had his own podcast in BP I’ve heard him speak at local reia meetings. He’s a very big fish. Me being small potatoes, I wouldn’t touch a STR in Nashville. Then again I’m having trouble touching anything in Nashville. Devan however is crushing it. Yeah, so I’m jealous. ;)
Investor · Nashville, TN · Member since 2015 · 688 posts · 607 votes
8y
@Luke Carl Not wanting to touch a STR in Nashville is exactly why I am trying to buy more of them. The herd is running left, I am going right. Our STRs have increased in nightly rates and we have bookings into half way through 2018 now. The supply is decreasing, the demand is high. I would reconsider
Real Estate Agent · San Diego, CA · Member since 2016 · 52 posts · 29 votes
8y
Hi @Alex M. I'm out of San Diego, which is currently a very strong AirBnb market. That being said, unless you are financially able to purchase property close to the ocean, there is little certainty about the long term legality of this within the City of San Diego. Smaller suburbs throughout the county have already put into place the 30 day minimum. Feel free to PM me if you have questions about this market. I have a friend that is also from the East Coast and operates several throughout the county that could be of some help.