Inflation And The STR Market?

Question

Hey everyone!

I've been building on my knowledge for the past two years and finally have a plan to buy a home in February 2022. My goal is to have a multifamily home in a STR market. I'm looking into Galveston, Tx to purchase with a FHA, or 100% financing through my local credit union. With inflation, I've heard that it's best to collect debt secured in assets, but I want to know what y'all think of that statement?

What should I be preparing for with this inflation?

How would it affect the mindset of the people who are usually interested in renting an AirBNB?

How else can I hedge against this uncertain market?

John Underwood · Answer

You will have a fixed rate mortgage so your mortgage payment will be the same, but rents can go up to offset inflation.

This will cover increased insurance, taxes and general Cost of Living.

Mike Anderson · Answer

During an inflationary period owning hard assets is one of the best ways to offset the inflationary cycle. Rates will go up but your mortgage with a fixed rate mortgage will stay the same. So owning property is a good idea if you believe we are going into an inflationary period.

Bruce Woodruff · Answer

I don't think inflation will deter people from doing the vacation rental thing....even if inflation goes to 10% , that's just $13 on a $130 night rental...people that like STR vacations are going to do it anyway.

Well unless we get 100% inflation and then we all have bigger issues...... :-)

Paul Crutcher · Answer

Ok good.

Yes, I am house hacking a STR. I've looked at a few on the market on the online portals, and they do seem over priced at the moment, so I may consider a BRRR STR house hack depending on the availability off market. I'll have to run the numbers through AirDNA before I set aside some time to look at the listings in person.

Karl McGarvey · Answer

@Paul Crutcher welcome to the Galveston Market! Let me know if I can help you at all in your search and setting up your business on the island. My partners and I own and manage a few STR in Galveston as well as help clients buy their own!

FHA, so you plan on doing owner occupied?

Inflation And The STR Market?

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