Help Starting In Short Term Vacation Rental!

21 Replies

Hello BP! I am 29 years old and very new to real estate investing but have always had a passion to learn about construction, home values, and travel. Flipping houses has been a dream of mine and eventually I want to quit my job (actually I would like to quit it now) and have real estate investing be a full time job and find financial freedom. I am learning so much right now can't get enough of the BP podcasts and videos and love practicing and analyzing deals!

My wife and I are feeling ready to have the rubber meet the road and purchase our first investment property using the equity from our primary residence. I want to start with the BRRRR method and do the rehab myself and turn it in to a short term/vacation rental and continue to do this to start building my portfolio with single family homes. The biggest problem is I do not know where in the country to start doing this! Living in northwest Ohio I know it is not around me so I did not know how to start researching where the best up and coming or steady markets are. Should I aim for trying to stay in one location or is it better to diversify and buy around the country? Any wisdom y'all can share is appreciated!

Concentrate on one market initially and once you have a proven model to build your team you can diversify. There are plenty of markets that will cash flow well. Check out the below Airdna post to see a few. My favorites are the Smokies and Florida panhandle because I also get to use them as vacation homes a few times a year. All depends on your personally strategy and what you want out of it. The best place is the one you have the most knowledge of. (More or less)

https://www.airdna.co/blog/bes...

Originally posted by @Joshua Strickland :

Concentrate on one market initially and once you have a proven model to build your team you can diversify. There are plenty of markets that will cash flow well. Check out the below Airdna post to see a few. My favorites are the Smokies and Florida panhandle because I also get to use them as vacation homes a few times a year. All depends on your personally strategy and what you want out of it. The best place is the one you have the most knowledge of. (More or less)

https://www.airdna.co/blog/bes...

Thanks for the reply, Joshua! That is super helpful. I grew up vacationing in Pensacola Beach, FL and have been looking mainly in Blue Ridge, GA and the Gatlinburg/Pigeon Forge area so those ideas are awesome to me. I have a follow up question. If I look in the Florida panhandle or anywhere near a beach, how important is the proximity to the beach for a vacation rental to cashflow? Do properties more inland (more in my budget at this point) still get rented at a good rate? I know that is probably a dumb question and not asking for specifics unless you have the crystal ball, just in general. Thanks!

@Steve Nafziger I’ll take the cop out answer and say it all depends on the property, but in my experience it does seem like a property that is just off the beach can be just as profitable for far less costs. It still would need easy-ish access to the beach. If it’s only a few blocks, I’d say you’re golden but check with your local realtor first. If the realtor you’re using doesn’t know, then get a new one.

Originally posted by @Steve Nafziger :

Hello BP! I am 29 years old and very new to real estate investing but have always had a passion to learn about construction, home values, and travel. Flipping houses has been a dream of mine and eventually I want to quit my job (actually I would like to quit it now) and have real estate investing be a full time job and find financial freedom. I am learning so much right now can't get enough of the BP podcasts and videos and love practicing and analyzing deals!

My wife and I are feeling ready to have the rubber meet the road and purchase our first investment property using the equity from our primary residence. I want to start with the BRRRR method and do the rehab myself and turn it in to a short term/vacation rental and continue to do this to start building my portfolio with single family homes. The biggest problem is I do not know where in the country to start doing this! Living in northwest Ohio I know it is not around me so I did not know how to start researching where the best up and coming or steady markets are. Should I aim for trying to stay in one location or is it better to diversify and buy around the country? Any wisdom y'all can share is appreciated!

 I have 5 Airbnb units in Columbus, Ohio. They perform well. I would recommend looking local.

@Steve Nafziger

I agree with Joshua. Take these things into consideration:. 

Start with one area. Especially if you're planning to rent it yourself. You'll need to find good housekeeping,  maintenence staff, etc... 

Do you plan to vacation there? Pick somewhere you might enjoy taking family to. Good way to write off a trip as you go to check on condition of property etc! 

Do you want complete hands off? Ask your realtor to give you recommendations of great property management companies. Usually certain developments have one or 2  major companies managing several properties in your area. 

Stress that you hope to continue your relationship with this realtor, too. They'll want to make sure you continue to be happy with them and anyone they can recommend.  It's paying it forward on all ends as you'll develop a good rapport and they'll keep you in mind for a deal that might cross their path. And you can refer that realtor to friends and family.  Win win.

 I saw you mentioned Gatlinburg! I have heard nothing but great things about that area. We had nightly rental cabins in Branson, MO for 10 yrs. Most of our guests would mention how Branson and Gatlinburg were similar in regards to attractions and loved staying in log cabins. Sooo, maybe look into areas in Gatlinburg that have log cabins?  

You live in Ohio...ok wait. You've got Ohio State parents looking for rentals during parents weekend, football games, graduation,  etc...then you've got Cedar Point! Google things to do and see in Ohio. See popular attractions and then pull up some airbnbs in those areas to see if you can pull off something closer to home. Remember,  think outside the box.

Feel free to ask me just about anything on nightly rentals. I am happy to share information and experiences. It can be rewarding on so many levels. 

Best of luck!

Not sure how far you are from Bowling Green, but a University is an economic engine that drives the local economy.  You could look at students, or faculty for potential guests.  Maybe Bowling Green has a medical community tied to the University which would provide short term guests doing internships or visiting professors.  Just a thought.

@Danette C. Thank you so much for your response! There’s so much good information to take in. You gave me a lot to think about! I’m starting to see how keeping it local or at least in one market at first will be easier especially in building and maintaining the relationships needed to manage from a distance. Thanks again!

@Steve Nafziger  

You already live in Ohio which people are flocking to invest in. More specifically, people are investing in the major cities where you are going to get the cash flow and appreciation. I recommend Columbus lots of job opportunities and population growth. Properties in Columbus Cashflow are good and have great appreciation and you can find deals that meet the 1% rule. 

@Patrick Drury thanks, Patrick! As a Michigan Wolverine it’s hard to get myself to invest in Columbus 🤪 but I know it seems to be growing like crazy and so are the cities outside of Columbus so it’s something I’m going to research more. Do you think Columbus does well with short term rentals or are you thinking more long term rental?

@Steve Nafziger Hey Man! I couldn't agree with Joshua more. The Florida Panhandle is a STR machine! With previous investors, I've actually seen it more common to get better ROI on the units that aren't waterfront, with some exceptions of course. We have lots of growth coming to the Inlet beach area ( Between Destin & Panama City Beach). The Panhandle strives on STR, so the risk of rules and regulations against it is very minimal vs a city that has industry also. ( Atlanta, LA, etc)
Best of luck to you!

P.S. Its also an amazing spot for you to vacation , as you know :)

@Steve Nafziger

We invest in northwest Ohio and actually think it’s missing high quality short term rentals in the nice suburbs. Go on Airbnb and search for 3+ bedroom houses for short term rental, you will quickly see the lack in inventory.

Just be aware that the city of Toledo has put out new regulations on how to operate a short term rental.

A lot of good information here. I also recommend focusing on vacation rental areas over metro markets. Areas where rules and regulations have already been put in place long ago. I recommend listening to the Avery Carl episode of the podcast, and schedule a call with her. 

Originally posted by @Gerald Pitts :

A lot of good information here. I also recommend focusing on vacation rental areas over metro markets. Areas where rules and regulations have already been put in place long ago. I recommend listening to the Avery Carl episode of the podcast, and schedule a call with her. 

 I second this.

Big difference between a vacation rental and a property that is just a STR.

People.pay big money when they are on vacation. You need to sell an experience. 

Hello Steve. I hope you are doing well. I have been doing BRRR for a while now here in Austin. Please reach out to me if you have any questions. Thank you