Best cash flow markets in post covid world?

Best cash flow markets in post covid world?

Queens · Member since 2020 · 9 posts · 5 votes

As Im doing my final round of analysis, just thought of putting this question here. I'm quite sold for the Kissimmee area and looking at some properties there. The reason I have almost decided for this market was that the numbers look very good. For a 250-300k SFH, it seems one can net around 35-40k in revenue and even with mortgage and other expenses, net cash flow comes to around 20k! I know there are some other markets where you can get good numbers, but perhaps not this much for so little investment. So I want to put out this question-

Which markets/cities/towns have consistently given very good returns in the last year in terms of pure cash flow? PCB, Scottsdale, Destin, Palm springs, Smokies are some of the markets I have been reading on this forums while going over last few months posts.

Im looking for traditional short term vacation rental markets where people have been doing airbnb since a while. My budget is 275-325k max and im atleast looking for 30-40k potential revenue, more the better. Please answer only if you have first hand experience and numbers to base your opinion. Open to hearing from realtors in any of these markets as well.

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Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
5y

Gatlinburg TN area.  You would have to work really hard to screw it up.

See this reply in the discussion

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  • Collin HaysBusiness Member
    Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
    5y

    Gatlinburg TN area.  You would have to work really hard to screw it up.

  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    5y

    Hey @Raj Kaushal, you can do great just about anywhere and like @Collin Hayssays, you can really mess up in the best of areas.

    You are asking for peoples results, which is fine, but remember, what Collin does might not reflect what you could do. People like the Carls, Julie McCoy and John Underwood knock it out of the park with their rentals. So if you go by their results, you will think "Damn! I can't screw that up!"

    Just saying, any results you get, YMMV...

  • Property Manager · Orlando Kissimmee, Daytona Beach & Cocoa Beach · Member since 2016 · 331 posts · 166 votes
    5y

    Hi. I own a vacation rental in Kissimmee. 4/2 single family home overlooking a pound (zip code 34746; Eagle Point community). It is 97% booked and I get $3k monthly during this covid year. I see Homes like that at $300k today. I also have homes in the resorts. Story lake and Champions Gate. You may get more in revenuer there, but! Taxes and HOA may take it back. Also purchasing price is way higher too.

  • Charlie CameronBusiness Member
    Investor · Niceville, FL · Member since 2017 · 450 posts · 366 votes
    5y

    @Raj Kaushal So definitely heed the advice about your own performance may vary despite the area.  I recently got a 4/3.5 resort townhome in Davenport (I'm twice as far from Disney as much of Kissimmee, but it's still only 15-20 mins depending on where in Disney).  Got it for $175K - which is why I DIDN'T buy in Kissimmee.  I did my homework by reaching out to some of the top AirBnB hosts in those communities and found out in a non-COVID year they pull 30-35K.  Due to COVID I expected to mostly break even, but we're doing far better.  The strange part is that many if not most of the other owners in our community have been empty since March.  We've been full since we've closed and are projected out into mid Jan and are getting enough inquiries beyond that to indicate the bookings will come.  The way I can figure most of those empty listings are either with management companies (most) or they don't have any clue how to optimize AirBnB - which, turns out, is NOT a mystery.  

    I'm actually IN the Destin/PCB market. Like the mountain markets, it stays pretty stable even despite COVID due to the drivability of it all. Your price point will likely be higher but so will your income. PCB tends to have a higher income to price of property ratio (if you compare like properties, condos to condos, homes to homes). But you can buy $5-600K homes in Destin that'll gross $85K+. All depends on what you want to do! AirBnB is very popular throughout the area. You just have to know which sides of the street STRs are allowed and then dig into the HOA to determine what specific rules there might be. Like some communities will allow STR but for no less than a week. That's a deal breaker for me personally, but may work for families that want a vacation home that makes some money as well but don't care as much about ROI.

    Happy hunting!  

    The RAL Room Assisted Living Mastermind
  • Real Estate Agent · Surf City, NC · Member since 2017 · 648 posts · 597 votes
    5y

    I am in the coastal North Carolina market (specifically Surf City, NC). There are only a few smaller boutique motels on the island and in the area so most vacation rental property owners use Airbnb/VRBO to advertise and manage their properties. There are definitely 3 bedroom houses here that are under 400k and can gross 30-40k a year in rental income. Let me know what other questions you have!

  • Real Estate Agent · Sevierville, TN · Member since 2015 · 1k+ posts · 1k+ votes
    5y

    Hi @Raj Kaushal - my main question is what do you mean by "net revenue"? STR numbers can get a little fuzzy sometimes because of the way expenses are layered, so that's what I want to be sure I understand. However, I will assume you mean gross rents (gross revenue - cleaning fees - any occupancy taxes you collect).

    If that is the case, 35-40k very achievable in the TN Smokies IF you can get a decent property around $300k, which these days is tough to do, unfortunately.  

    Re: cash flow, that is extremely subjective to the individual investor, particularly the financing terms.  You've gotten some good insight on this thread!

  • Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    5y

    Hi Raj, any interest in Massachusetts? There are some terrific opportunities here if so. Shoot me a message. I'd love to help...FREE of charge, as always :)

  • Queens · Member since 2020 · 9 posts · 5 votes
    5y

    Thanks for all the replies. Julie, net profit for me is total revenue minus mortgage interest minus taxes minus hoa fees minus cleaning and fixture expenses. So for 40k revenue, assuming 15k mortgage (30% dpayment on 250k house), 5k taxes and hoa, 5k other expenses, it will be net 15k. Thats the number im interested in.

  • Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
    5y

    I know this guy that buys bank foreclosures in a depressed refinery town.  He buys a 3BR place for just under 10k, spends about 1k for furnishings, and charges $600/week.  But he has to deal with dead bodies, prostitutes, overdoses, intruders and a host of other things normal people typically don't deal with.

  • Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    @Raj Kaushal you need to tag people like @Julie McCoy when responding or they won’t know you have responded to them unless they are following this thread. Most people are too busy to follow every thread they comment on. Just a friendly tip.

  • Queens · Member since 2020 · 9 posts · 5 votes
    5y

    @Julie McCoy please see my response above.

  • Member since 2019 · 448 posts · 306 votes
    5y

    @Raj Kaushal

    Welcome to Central Florida man. Kissimmee is a good spot to be in. I have long term and short term rentals in the area and they are killing it. If you need a hand picking a good niche development let me know. There are a lot of tiny sub-markets with all the big developments around.

    Happy Housing,

    Matt

  • Member since 2019 · 448 posts · 306 votes
    5y

    @Valentina Naumenko

    Those numbers are very strong. I see airBnb’s in my area and notice the better advertised, better managed places are staying booked all the time. Sounds like you are a good manager. I know we have chatted before but ill keep complimenting you :)

  • Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    @Raj Kaushal drive to locations with an outside nature draw, ie lakes, ocean, mountains. Those markets with outdoor activities have increased in overall demand post Covid. Good luck!

  • Investor · Leominster Ma · Member since 2019 · 305 posts · 162 votes
    5y

    @Bud Gaffney I live in Ma and are always looking for great deals for new projects.  Ill shoot you a message

  • Property Manager · Kissimmee, FL · Member since 2019 · 445 posts · 266 votes
    5y

    @Raj Kaushal Both Kissimmee and Davenport are great year-round markets. We are property managers with 85+ properties under management in the overall Disney market. We subscribe to software which can provide unbiased occupancy and revenue data on any properties you might be curious about. Happy to help! Send me a DM or drop me a line at the email below.

  • Investor · Lawrence, KS · Member since 2012 · 50 posts · 15 votes
    4y

    @Matt Nico, can you recommend any places in the Disney world area that would make a good STR with decent cash flow? I saw that you offered advice to Raj so thought I'd ask. I've been looking in that area, thinking of a 3/2 or 4/3. My price range is $200k-400k. Thanks

  • Investor · Lawrence, KS · Member since 2012 · 50 posts · 15 votes
    4y


    @Jason Regan, I'm from Mass too, nearby you in Worcester. I own a condo in Worcester and thinking of doing a 1031 exchange to upgrade to one that will allow short term renting. Curious if you know anything about the STR market in central mass.

  • Investor · Lawrence, KS · Member since 2012 · 50 posts · 15 votes
    4y


    @Bud Gaffney, curious what kinds of opportunities you are seeing in the boston area. I’m checking out a few different markets, including central Mass, Boston area, and southern NH ski resort areas. Would love to hear your thoughts. My budget is up to $500k. 

  • Realtor · Boston MA · Member since 2018 · 44 posts · 23 votes
    4y

    @J.C. Martel I have a STR in Worcester MA. It does very well but you really have to work for it. PM me if you want more info about mine!

  • Member since 2019 · 448 posts · 306 votes
    4y

    @J.C. Martel

    The best sweet spot is to buy a 4-3 that has a 5th flex room that you can turn into a bedroom or just a straight up 5-3. The 3-4 bed homes dont usually cashflow enough.

    Also home prices have shot up about 20% since this thread last year. Before the run up i could cashflow about $1,200 or so. Im at about $800-$900 now.

    Food for thought :)

    -Matt

  • Investor · Lawrence, KS · Member since 2012 · 50 posts · 15 votes
    4y

    @Matt Nico are those cash flow numbers with a 10% down or 20% down note? I imagine when you bought, the price was a lot lower too. So my cash flow would be lower if I entered the market now, and having only 10 or 20% down. 

  • Member since 2019 · 448 posts · 306 votes
    4y

    @J.C. Martel

    Those numbers are semi-accurate with a 20% down. Ive been buying a lot of homes at over asking price with seller financing where I put down less than 5% and im still cashflowing about $800ish so id say eith putting 20% down its about $950-$1,000 a month. I am not accounting for CapX as well just so you know.

    -Matt

  • Commercial Real Estate Agent · Bowie, MD · Member since 2015 · 31 posts · 1 vote
    4y

    @Paul Sandhu Hi. I would like to get more info on that. How can I contact you ?

  • Rental Property Investor · Palm Springs, CA · Member since 2016 · 138 posts · 38 votes
    4y

    @Raj Kaushal

    Still have yet to find a market that grosses anywhere near what Great Palm Springs does. The entry point is high but you are usually looking at 125k-150k in gross year 1 and higher after that. The trick is location and staging. My highest grossing home is in Indio and will do about 200k this year and 230-250k next year when all the music festivals are back.

    But like I said entry point is not cheap since investors are bidding everything up like crazy. One of my clients lost a home in Palm Springs last week where we went 125k above asking with no contingencies! Ridiculous. Keep in mind when I say greater Palm Springs I am referring to the cities of Indio, some areas of Bermuda Dunes outside the HOA, and the city of Palm Springs itself. Shoot me a message or check out my website and I'd be happy to share more info www.heliosvacations.com

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