Should I invest in Short-Term Rental or Traditional SF? property?

[Kurtis Eaton]

Hi. I'm new to this and currently educating myself on deal analysis, finance and other basics. My question is whether I should pursue a short-term vacation rental property or a traditional SF home (or small 1-4 unit multi) for my first deal? It would seem to me that the ROI & cash flow are more appealing on the STR; am I missing something? What are the pros and cons of each?

Thanks in advance for any advice...

Kurt

[Ken Boone]

Yea it depends what you want to be doing and what your goals are.  I started with LTRs to get some experience and then switched to STRs as LTRs at my age was not going to get me where I wanted to go fast enough.  I have a mgmt company for my LTRs they charge 8% and that makes my LTR investments about 97% passive.  Passive is good.  They cash flow well but still not fast enough to get where I wanted to go.  I switched to STRs and they make a boat load of cash flow, but we manage those ourselves because mgmt companies for STRs charge a much higher rate.  Which is expected as there is a lot more work involved.  So since we manage ourselves there is work - it is not passive income.  In my case the time it takes for the work is easily worth the cash flow and we have the time available to do it.  Quite honestly I am now struggling with the idea of what I want to do next.  Keep rolling with more STRs or take the cash flow from the STRs and put them back into more LTRs since they are passive.  I don't think I can wrong either way.  Just trying to figure out what I want to do.