STR in a funky new mountain build- what should I look for?

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STR in a funky new mountain build- what should I look for?

AJ Johnson
Wholesaler · Erie, CO · Member since 2020 · 15 posts · 3 votes

I am Realtor near Boulder, Co. and am taking the plunge into investing myself. I basically want to buy a home in the mountains and have STR subsidize some/most of the mortgage. I came across this new community and it got me interested.

It is located in Granby, Co. just behind Rocky Mtn Park, with 3 lakes, a small town and 30' from Winter Park Ski Resort. It's a funky area as it has camping and RV sites, and cabins along with the homes. There are some pretty cool looking amenities that would attract a lot of people. Here's the layout: https://3dq1fq1lesjd1aw5045f5a6h-wpengine.netdna-ssl.com/wp-content/uploads/2020/01/river-run-site-map.pdf . 

The home we are looking is 250K and can easily be made into a STR- here's the layout https://3dq1fq1lesjd1aw5045f5a6h-wpengine.netdna-ssl.com/wp-content/uploads/2019/07/river-run-villa-lookout-lodge.pdf

I'm worried I'd be competing with the cabins renting for 130 to 150/night. Plus, this is a brand new community being built, so there is obvious risk in the unknown. 

Thinking I would put it at 150/night to be competitive. With putting 10% down that leaves me around 1100 for my mortgage (no idea on HOA, other fees yet). If I rent it 10 nights a month that puts me at $1500/month, which should cover the mortgage and fees. Is this reasonable to assume?

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Jeffery Wilen
Rental Property Investor · Vancouver, WA · Member since 2017 · 182 posts · 115 votes
6y

My biggest concern would be HOA restrictions.

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  • Jeffery Wilen
    Rental Property Investor · Vancouver, WA · Member since 2017 · 182 posts · 115 votes
    6y

    My biggest concern would be HOA restrictions.

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  • Matt Wilson
    Philadelphia, PA · Member since 2018 · 6 posts · 2 votes
    6y

    No need to assume if you are using AirBnb as one of your str platforms. Considering the potential investment I'd purchase a month of airdna.co for the specific area (not affiliated, but use the service myself). With a free account you can see all the competing listings in the area (you can purchase by zipcode, city, etc.) and I believe their average daily rate. If you want access to more data like yearly earnings, occupation percentages, etc. you'd have to pay for the month (you can always cancel after completing your research, which is what I tend to do).

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  • Ken Boone
    Investor · Greenville, SC · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    Al that is a great area there. If your main interest is having a second home and let the STR aspect help pay the mortgage, as long as there are not restrictions on STRs in that area I would go for it. Yes you will be competing with the cabins so you will just have to gauge the take rate in that area. I would scour airbnb and vrbo for other cabins/STRs and see how they are booking and what rates they have per season. Then I would try to see how you can make your place more attractive. i.e. amenities you can add to the mix. i.e. Large TVs, arcade games, you name it.

    I don't know if your 10 nights a month is reasonable or not in that area.  I am sure you will have seasonal uptakes and then parts of the year pretty empty.  I don't know the area enough well enough to tell you on that, hopefully someone else that knows that area can pipe up.

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  • AJ Johnson
    OP
    Wholesaler · Erie, CO · Member since 2020 · 15 posts · 3 votes
    6y
    Originally posted by @Jeffery Wilen:

    My biggest concern would be HOA restrictions.

    Yeah, that is a great unknown at this point. Typically in the mountain condos it's $400/month or more. 

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  • AJ Johnson
    OP
    Wholesaler · Erie, CO · Member since 2020 · 15 posts · 3 votes
    6y
    Originally posted by @Matt Wilson:

    No need to assume if you are using AirBnb as one of your str platforms. Considering the potential investment I'd purchase a month of airdna.co for the specific area (not affiliated, but use the service myself). With a free account you can see all the competing listings in the area (you can purchase by zipcode, city, etc.) and I believe their average daily rate. If you want access to more data like yearly earnings, occupation percentages, etc. you'd have to pay for the month (you can always cancel after completing your research, which is what I tend to do).

     Thanks Matt, that is a great resource I will definitely use. 

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  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    6y

    Hey @AJ Johnson, I took a look at their website. It looks interesting, but this would not be my cup of tea personally.

    Something I would look at is do you have to use them for property management. Places that are a planned resort community often require owner to use them as the manager for any rentals. That could cut into your bottom line.

    Whoever is building it has put a lot of money into it so I would have to assume that they are expecting to profit.

    Also take a look at the nightly rates for the camping and glamping options. It will all compete with your place to some degree. If you have to use the resort at the property manager, you might not be able to choose your nightly rate. They might just make all the similar places the same price.

    On AirDNA, I don't think you are going get good data on this. It will pull everything vs just the resort. 

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  • AJ Johnson
    OP
    Wholesaler · Erie, CO · Member since 2020 · 15 posts · 3 votes
    6y
    Originally posted by @Michael Baum:

    Hey @AJ Johnson, I took a look at their website. It looks interesting, but this would not be my cup of tea personally.

    Something I would look at is do you have to use them for property management. Places that are a planned resort community often require owner to use them as the manager for any rentals. That could cut into your bottom line.

    Whoever is building it has put a lot of money into it so I would have to assume that they are expecting to profit.

    Also take a look at the nightly rates for the camping and glamping options. It will all compete with your place to some degree. If you have to use the resort at the property manager, you might not be able to choose your nightly rate. They might just make all the similar places the same price.

    On AirDNA, I don't think you are going get good data on this. It will pull everything vs just the resort. 

    Thanks for the input @Michael Baum. That all makes sense. I am going to make an appointment to go there, tour the place and get some questions answered. 

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