Good opportunity to pick up vacation rentals?

Question

Given the situation at hand, with many STR investors losing income due to this virus, is this a good opportunity to find good deals on vacation rentals? Or should I steer away from buying these myself since there's no clear end in sight for the virus?

Nathan Gesner · Answer

I agree with the others. It's too early to tell and you're unlikely to find any "fire sales" right now. It's only been 4-6 weeks and most people can survive that. If this nonsense carries on for a couple more months, particularly going into the summer season, then you'll see people bailing in large numbers.

Even then, it may not be a good time to buy. They may be bailing because the industry is too weak to justify staying in. It only makes sense to buy a property if you can turn it around and make a profit.

Jon Crosby · Answer

Hi @Austin Works, here is a similar thread on that topic if you want to check it out: https://www.biggerpockets.com/...

Since the housing market itself hasn't yet quite adjusted from this, most STR owners will just attempt to sell at market prices on MLS for now or convert to long term rentals. Yes, STRs are heavily impacted right now, but like all things, this will pass and people will want to vacation and will need places to stay...so it's a matter of having capital to weather the storm if you do find a good deal.

Best of luck!

Account Closed · Answer

To me a "good deal" is where by buying, I make more than by not buying. Since AirBnB owners are being hit particularly hard, as they leave the industry, they will probably sell, putting more properties for sale on the market. But, the very reason they are selling is why I probably wouldn't buy. They are losing money right now. It's about 30% of the population that feel safe to go about the country. Boeing is laying of 15% of their workforce, so they don't project a growth in travel anytime soon. There is a negative demand for airplanes. (Airlines are canceling orders.) However, if you are within driving distance of a major population, gas is really, really cheap. So, it depends on the audience you appeal to and the location. If people fly to get there, not so good, if people drive to arrive, then that is much better.

Joe Splitrock · Answer

A lot of STR owners are complaining about loss of income, but don't assume that means they are desperate to sell. Most people can afford to carry their properties for a while. We are not even two months into this, so we are talking one or two payments. There is also forbearance options, so some not even paying their mortgages right now.

It will take months or even years for prices to get beat down, if it happens. Even then it will probably only be in a limited number of markets.

John Underwood · Answer

Maybe in time but I think its too early.

Personally my rentals are coming back nicely after just a short breather.

Suburban markets may not fair so well but then I wouldn't want to buy any of these.

Ken Latchers · Answer

Imagine that none of the vaccines work, and we spend the next four years going in and out of Sheltering at home because wave after wave after wave after wave after wave after wave after wave after wave after wave of coronavirus keeps coming back

Good opportunity to pick up vacation rentals?

Good opportunity to pick up vacation rentals?

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