What cities are currently great for high airbnb returns?
Denver, CO · Member since 2017 · 102 posts · 48 votes
Who here is making 2-3x returns on their STR? I want to know what areas in the U.S. are hot. I have a full condo of furniture and have to move it somewhere to STR! Obviously I want it to be fully legal and licensed. I would love your experiences because my alternative is to spend a ton of money on airdna data! Thank you in advance!!!
Every day I have a Craigslist ad that shows up in the first search page. Like this:
I also have 3 small billboards in and around the contractor parking lot.
Every spring I send flyers to every welding school in Kansas, Oklahoma, Arkansas, Texas and Louisiana.
Every fall I send calendars of scantily clad women with my advertising to the H.R. dept of every contractors company that has rented from me.
There are magnetic signs on my truck.
I have a side job. It's doing the pre-access drug screens for new contractors starting their jobs at the refinery. Every contractor gets a nice metal pen with my contact info. There are about 3000 pens floating around the Midwest.
Craigslist and my side job account for 75% of my first time rentals. First time rentals are about 33% of my total rentals. 66% of my total rentals are repeat rentals.
I brokered one just off of King st in Downtown charleston.. sold i think for about mid 800s and its a two unit the owner says she makes about 5k a month on it net.
Net meaning NOI or Net income after payment of PITI and income tax?
I would think caostal or beach towns would always do good, Charleston, Savannah, Myrtle Beach etc.
@Julie Hill Hi Julie, The Coachella Valley is a great spot for STR's!!!
@Julie Hill Hi Julie, The Coachella Valley is a great spot for STR's!!!
I looked into the coachella valley for STRs and the legality of it seemed to be waning. Seemed to be very strict laws in some areas & possibly more laws coming in other areas. Am I misunderstanding?
@Eric P. Some areas are stricter than others, the market for STR's is doing awesome here. You have to know how to pick the right areas, I live it every day. The opportunity to do extremely well in the Coachella Valley totally exists. I have represented several BP Investors and they are doing great, also working with BP investors as we speak. In order to understand our market in the desert you have to be fully involved. In summary, everything is completely fine for STR's out here. It's going strong with no sight of stopping.
Pretty much everyone posting the name of a market on this board is late to the party, Charleston, Nashville, etc. etc. Run the numbers and you will see that they won't work for long-term rentals. Then you've got very high risk being forced into Airbnb with legal risk. If your investment strategy is to AirBnb, you had better build into your approach legal risk, because if you buy assuming that you'll AirBnb, then the city passes ordinances to force you to long-term lease (VRBO... monthly, 6 month, or 12 month), you'll be screwed if you cant cash flow.
So, AirBnb investors generally don't have staying power. This whole Airbnb thing has already or will be regulated in most attractive markets. If you've already got Airbnb rentals, make your cash while you can then acquire long-term cash flowing rentals.
Finally, ideal Airbnb markets are not ideal Long-term rental markets. That is because ideal Airbnb markets are vacation rentals. Ideal long-term rental markets are larger markets (100K populations) that have easy access to high quality jobs. So, choose your strategy, but if its Airbnb, you should be developing a strategy to deal with legal/regulatory risk.
Pretty much everyone posting the name of a market on this board is late to the party, Charleston, Nashville, etc. etc. Run the numbers and you will see that they won't work for long-term rentals. Then you've got very high risk being forced into Airbnb with legal risk. If your investment strategy is to AirBnb, you had better build into your approach legal risk, because if you buy assuming that you'll AirBnb, then the city passes ordinances to force you to long-term lease (VRBO... monthly, 6 month, or 12 month), you'll be screwed if you cant cash flow.
So, AirBnb investors generally don't have staying power. This whole Airbnb thing has already or will be regulated in most attractive markets. If you've already got Airbnb rentals, make your cash while you can then acquire long-term cash flowing rentals.
You didn't mention vacation areas like Tahoe, Smokies, Outer Banks, Myrtle Beach, etc where STR has been legal & welcomed for 100 years & should continue to be long into the future
Pretty much everyone posting the name of a market on this board is late to the party, Charleston, Nashville, etc. etc. Run the numbers and you will see that they won't work for long-term rentals. Then you've got very high risk being forced into Airbnb with legal risk. If your investment strategy is to AirBnb, you had better build into your approach legal risk, because if you buy assuming that you'll AirBnb, then the city passes ordinances to force you to long-term lease (VRBO... monthly, 6 month, or 12 month), you'll be screwed if you cant cash flow.
So, AirBnb investors generally don't have staying power. This whole Airbnb thing has already or will be regulated in most attractive markets. If you've already got Airbnb rentals, make your cash while you can then acquire long-term cash flowing rentals.
You didn't mention vacation areas like Tahoe, Smokies, Outer Banks, Myrtle Beach, etc where STR has been legal & welcomed for 100 years & should continue to be long into the future
Eric,
Do you currently got short-term rentals in those markets? If so, when did you buy and how much of a rehab did you have to complete (capital to rehab)? Your comment about "welcomed for 100 years" I strongly do not agree with. If you operate an AirBnb in neighborhood where there are owner/occupiers, you'll experience city pressure for increased short term rental regulation. The most ATTRACTIVE short term rental markets WILL have the most regulation (example: SF, Hawaii, San Diego, other coastal cities, etc.). That's what we see nationally and it makes sense!
I include those. Overpriced. You're late to the party my friend. These have been "discovered" like 15+ years ago. The cat's outta the bag!
I know because I monitor those markets, in addition to all national markets with over 100k population + strong job growth.
If you can make the numbers work on your AirBnb strategy, you'll likely need to do a significant rehab to do so. But, you'll also have other problems... most or all heavily regulate short term rentals... so if you can't cash flow with a long-term rental strategy, you'll be in trouble once regulators catch up with you. You shouldn't be developing a strategy based on illegally renting short term units. That's recipe for disaster / bankruptcy.
In those markets, you may find something, but it'll likely entail a significant rehab to bring it up to Airbnb rental standards.
Pretty much everyone posting the name of a market on this board is late to the party, Charleston, Nashville, etc. etc. Run the numbers and you will see that they won't work for long-term rentals. Then you've got very high risk being forced into Airbnb with legal risk. If your investment strategy is to AirBnb, you had better build into your approach legal risk, because if you buy assuming that you'll AirBnb, then the city passes ordinances to force you to long-term lease (VRBO... monthly, 6 month, or 12 month), you'll be screwed if you cant cash flow.
So, AirBnb investors generally don't have staying power. This whole Airbnb thing has already or will be regulated in most attractive markets. If you've already got Airbnb rentals, make your cash while you can then acquire long-term cash flowing rentals.
Finally, ideal Airbnb markets are not ideal Long-term rental markets. That is because ideal Airbnb markets are vacation rentals. Ideal long-term rental markets are larger markets (100K populations) that have easy access to high quality jobs. So, choose your strategy, but if its Airbnb, you should be developing a strategy to deal with legal/regulatory risk.
@Julie Hill Hi Julie, The Coachella Valley is a great spot for STR's!!!
I looked into the coachella valley for STRs and the legality of it seemed to be waning. Seemed to be very strict laws in some areas & possibly more laws coming in other areas. Am I misunderstanding?
Pretty much everyone posting the name of a market on this board is late to the party, Charleston, Nashville, etc. etc. Run the numbers and you will see that they won't work for long-term rentals. Then you've got very high risk being forced into Airbnb with legal risk. If your investment strategy is to AirBnb, you had better build into your approach legal risk, because if you buy assuming that you'll AirBnb, then the city passes ordinances to force you to long-term lease (VRBO... monthly, 6 month, or 12 month), you'll be screwed if you cant cash flow.
So, AirBnb investors generally don't have staying power. This whole Airbnb thing has already or will be regulated in most attractive markets. If you've already got Airbnb rentals, make your cash while you can then acquire long-term cash flowing rentals.
You didn't mention vacation areas like Tahoe, Smokies, Outer Banks, Myrtle Beach, etc where STR has been legal & welcomed for 100 years & should continue to be long into the future
Eric,
Do you currently got short-term rentals in those markets? If so, when did you buy and how much of a rehab did you have to complete (capital to rehab)? Your comment about "welcomed for 100 years" I strongly do not agree with. If you operate an AirBnb in neighborhood where there are owner/occupiers, you'll experience city pressure for increased short term rental regulation. The most ATTRACTIVE short term rental markets WILL have the most regulation (example: SF, Hawaii, San Diego, other coastal cities, etc.). That's what we see nationally and it makes sense!
I include those. Overpriced. You're late to the party my friend. These have been "discovered" like 15+ years ago. The cat's outta the bag!
I know because I monitor those markets, in addition to all national markets with over 100k population + strong job growth.
If you can make the numbers work on your AirBnb strategy, you'll likely need to do a significant rehab to do so. But, you'll also have other problems... most or all heavily regulate short term rentals... so if you can't cash flow with a long-term rental strategy, you'll be in trouble once regulators catch up with you. You shouldn't be developing a strategy based on illegally renting short term units. That's recipe for disaster / bankruptcy.
In those markets, you may find something, but it'll likely entail a significant rehab to bring it up to Airbnb rental standards.
Wtf, dude. You responded to my comment about Smokies & Outer Banks by saying “where there are owner/occupiers, you'll experience city pressure for increased short term rental regulation”; places like Smokies & Outer Banks have very few owners living there. They’re markets built almost entirely as second homes / VRs. Go troll elsewhere
Pretty much everyone posting the name of a market on this board is late to the party, Charleston, Nashville, etc. etc. Run the numbers and you will see that they won't work for long-term rentals. Then you've got very high risk being forced into Airbnb with legal risk. If your investment strategy is to AirBnb, you had better build into your approach legal risk, because if you buy assuming that you'll AirBnb, then the city passes ordinances to force you to long-term lease (VRBO... monthly, 6 month, or 12 month), you'll be screwed if you cant cash flow.
So, AirBnb investors generally don't have staying power. This whole Airbnb thing has already or will be regulated in most attractive markets. If you've already got Airbnb rentals, make your cash while you can then acquire long-term cash flowing rentals.
You didn't mention vacation areas like Tahoe, Smokies, Outer Banks, Myrtle Beach, etc where STR has been legal & welcomed for 100 years & should continue to be long into the future
Eric,
Do you currently got short-term rentals in those markets? If so, when did you buy and how much of a rehab did you have to complete (capital to rehab)? Your comment about "welcomed for 100 years" I strongly do not agree with. If you operate an AirBnb in neighborhood where there are owner/occupiers, you'll experience city pressure for increased short term rental regulation. The most ATTRACTIVE short term rental markets WILL have the most regulation (example: SF, Hawaii, San Diego, other coastal cities, etc.). That's what we see nationally and it makes sense!
I include those. Overpriced. You're late to the party my friend. These have been "discovered" like 15+ years ago. The cat's outta the bag!
I know because I monitor those markets, in addition to all national markets with over 100k population + strong job growth.
If you can make the numbers work on your AirBnb strategy, you'll likely need to do a significant rehab to do so. But, you'll also have other problems... most or all heavily regulate short term rentals... so if you can't cash flow with a long-term rental strategy, you'll be in trouble once regulators catch up with you. You shouldn't be developing a strategy based on illegally renting short term units. That's recipe for disaster / bankruptcy.
In those markets, you may find something, but it'll likely entail a significant rehab to bring it up to Airbnb rental standards.
@Ken Latchers Ken, appreciate your input but you are way out there on this one. I proudly serve my clients to include many BP investors, my clients are getting up to 30% ROI. I DO NOT fit into what your mind set might be on agents that are offering their help to investors. There are still good people out there, unfortunately it looks like you have not experienced that.
@Paul Sandhu I’m one of those “scary ironworker” guys you speak of and we all don’t have neck tats! Lol (joke). What do you do w/ the property after the work has dried up?
@Sebastian Rodriguez When contractors move out my wife cleans the place, does laundry, makes beds and restocks it. I rent it out again. The vacancy time is 2-3 weeks. Occupancy time is 2 weeks to 4 months on average.
My renters are refinery contractors. Welders, fitters, boilermakers, sparkies, NDT guys etc.
@Account Closed Just one wife. When 2 or more properties become vacant at the same time, she normally cleans the one with fewer bedrooms. The smallest ones first. The clean up quicker, and they rent out quicker. They pay less rent than a bigger house, but they are rented out more weeks per year.
@Julie Hill Check out the sirbnb calculator on eliotandme, then you can plug in various areas.
As others have nentioned, knowing the local zoning, permit process, and attitudes towards STR is important. In Sunriver, OR it's an entire community set up for STR, and all many amenities of the HOA, are available to guests. There's a commercial hub with brewrries, restaurants, shops, recreation rentals, store, etc. plus its close to rivers. waterfalls, mountains. Great for summers and winter.
Other cities such as San Ckemente, CA allow STR, but they're limited to those permitted before new law, etc.
@Paul Sandhu kudos to you sir. I’ve been looking, albeit a short time for these types of homes in CO, MT, ND, SD, NM etc. haven’t seen anything @ $9500 sales price let alone move in ready... my guess is you buy from a wholesalers? The auction route is tough also with reserve pricing usually winning. Glad to hear of your successes.
@Josh Nigh 12 years ago, there was a flood that wiped out 20% of the town. Those flooded people left town. There were also 2 big industries in the town, a refinery and an Amazon.com distribution center. The Amazon center left 4 years ago, and most of the working class people left too. If they had a bank loan, they let the bank have their house. Foreclosures are pretty common. I offer the banks 25 cents on the appraised dollar, and they usually take it because that's the only offer on the table.
Travelling contractors working at the refinery are who I rent my STRs to. Welders, pipefitters, boilermakers and other such ruffians.
@Paul Sandhu thanks for sharing your knowledge. I’m involved in the industrial sales world and am very familiar with the types of cities and tenants that occupy your rentals.
You’ve carved out a great niche for yourself and family! Cheers to you and the refinery workers of America.
John,
Market research. That’s like a half day presentation in itself! I suggest you take all the classes to get your real estate brokers license and read a few books on how cities grow and evolve. But, I’ll leave you with this... population and population forecasts and jobs and job forecasts are primary drivers of price appreciation in real estate. This info is free and easy to find if you know where to look.
Best,
Jon
Who here is making 2-3x returns on their STR? I want to know what areas in the U.S. are hot. I have a full condo of furniture and have to move it somewhere to STR! Obviously I want it to be fully legal and licensed. I would love your experiences because my alternative is to spend a ton of money on airdna data! Thank you in advance!!!
What areas are hot for 2024 that you found?