QOTW: What was your Short-Term Rental homerun?

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QOTW: What was your Short-Term Rental homerun?

Alicia MarksPro Member
Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes

There are more than a few of us dreaming of earning passive income from the beach, but how can that beach house or unique property work for you? 

Check out the new BiggerPockets book by Avery Carl "Short-Term Rental, Long-Term Wealth"

You can purchase it here: https://store.biggerpockets.co...

Let's help out all of our members by sharing your best short-term rental property purchase to date! What made it so great? Location? How did your rental strategy evolve? What could you pass on to those interested in investing in this asset class? I'm so excited to hear about your homeruns!

[email protected]Podcast Guest on Show #204
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Monte Young
Rental Property Investor · Bellingham, WA · Member since 2015 · 4 posts · 10 votes
4y

I live in a beach community and through the years I had continuously walked by a shingle-sided house with a great ocean view.  The husband had passed away and the wife bought a new house and the beach house had sat for five years and started to deteriorate.  I found out from a neighbor that the place was going to be for sale and I approached the seller.  She named a price that was quite good and I bought it by selling another property that I had owned as a long-term rental through my self-directed 401K.  I spent the summer renovating the house which needed a lot of work.  I moved a renter in for several months and then June of 2021 launched it as an Airbnb.  It worked out very well with my best month in August with over 10K in revenue.  I have great management and an extreme attention to detail. I own it in my 401K so the income is tax-free until it's taken out.  A good view, a unique home, a great quiet location, and a competitive price are critical.  The biggest challenge is cleaning, we have gone through lots of cleaners to find some that are as picky as we are for our guests. I have already made more in the few months I have had the Airbnb going than I would have in a full year with the long-term rental.  Location, quality, price point, and the best team are the keys. 

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  • Karl McGarvey
    Real Estate Agent · Houston, TX · Member since 2019 · 763 posts · 500 votes
    4y

    @Alicia Marks the laws are great… for now. Recent rumors of limiting STR on the island have a few people very worked up, but we will see if they actually play out.

    3Reply
  • Alicia MarksPro Member
    OP
    Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes
    4y

    What is the entry price point? I've been looking at a few areas, but I'm really starting my research point of what areas look good and what the STR laws are.

    [email protected]Podcast Guest on Show #204
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  • NaTarrio JonesPro Member
    Rental Property Investor · League City, TX · Member since 2016 · 97 posts · 32 votes
    4y
    Originally posted by @Alicia Marks:

    @NaTarrio Jones I'd love to hear about that one. How are the laws in Galveston? That area is at the top of my list for possible short term because my parents are moving their boat to Keemah to start prepping for retirement. 

    Galveston recently passed an ordinance that requires all STR owners to register and collect HOT (Hotel Occupancy Tax) for the City of Galveston (9%) and state of Texas (6%) on all gross revenue. It must be paid quarterly or risk fines. AirBnB now collects this from the guest with each booking and pays this tax directly for each host.

     I will keep you updated on how it goes.  Good luck to your parents!

    0Reply
  • Alicia MarksPro Member
    OP
    Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes
    4y

    @NaTarrio Jones that is good to know! It's great that AirBNB collects directly and it doesn't affect your bottom line. I have a feeling most cities will go that direction if they haven't already.

    [email protected]Podcast Guest on Show #204
    0Reply
  • Will Wilson
    Investor · Buffalo, NY · Member since 2020 · 9 posts · 1 vote
    4y

    @Karl McGarvey great to hear you are rented through November! We are currently in the process of getting our AirBnB in Galveston setup. Seven blocks from the beach. Would love any insight you have on keeping your place booked year round!

    0Reply
  • Karl McGarvey
    Real Estate Agent · Houston, TX · Member since 2019 · 763 posts · 500 votes
    4y

    @Will Wilson youre gonna hate my advice of “buy beachfront” if you are seven blocks off of the beach haha. In the offseason people book for the views because the views are cheaper than during the summer

    0Reply
  • Karl McGarvey
    Real Estate Agent · Houston, TX · Member since 2019 · 763 posts · 500 votes
    4y

    @Alicia Marks anything from 150k beachfront condos to million dollar homes. Galveston has it all

    0Reply
  • Will Wilson
    Investor · Buffalo, NY · Member since 2020 · 9 posts · 1 vote
    4y

    @Karl McGarvey haha right on the beach is on our radar for the next property. Our backyard is going to be unlike any STR on the market in Galveston so we are looking forward to seeing the results. I think it's a great market regardless the time of year.

    0Reply
  • Karl McGarvey
    Real Estate Agent · Houston, TX · Member since 2019 · 763 posts · 500 votes
    4y

    @Will Wilson you and everyone else! NAR just named us the best place to buy a beach house in 2021, I have my phone calls from being wanting to buy STR properties than I ever have!

    0Reply
  • Luke G.
    Rental Property Investor · Hammond, WI · Member since 2017 · 139 posts · 217 votes
    4y

    4400 square foot cabin on the south shore of Lake Superior purchased in July 2020. Purchase price was 325k, I put 40k into it with renovations and re-appraisal came in at 495k in December of 2020, which opened up a LOC for 155k that I've used to purchase another 800k worth of LTR properties. I recently had a wholesaler offer me 600k for it and believe I could sell it for close to 700k at this point.

    But I'm just going to let it continue to print money. Gross income this year is at 85k, next year I should be well over 100k as 1/2 the summer is already booked at 650+night. I will have netted close to 40k on it this year which will end up making it a COC return of over 50% in year one. I will be purchasing another in the spring remotely. I honestly got lucky on this one, I purchased a large property that had been on the market for a long time at the peak of the covid scare where markets could have gone either way. I doubt I will find the same COC numbers again. I have no plans to sell this property, as I have fixed 30 year financing at 3% on it. I will continue to use the LOC on it for additional purchases.

    2Reply
  • Alicia MarksPro Member
    OP
    Fort Worth, TX · Member since 2020 · 1k+ posts · 2k+ votes
    4y

    @Luke G. that sounds like a fantastic find! I love how you were able to leverage the equity to grow even more.

    [email protected]Podcast Guest on Show #204
    0Reply
  • Joe Rivera
    Rental Property Investor · Fort Worth, TX · Member since 2016 · 39 posts · 20 votes
    4y

    @Karl McGarvey can you post a link to that report? I have beach condos in Galveston and would like to read it.

    0Reply
  • Myrtle Mike ThompsonBusiness Member
    Realtor · Myrtle Beach, SC · Member since 2016 · 352 posts · 204 votes
    4y
    Originally posted by @Alicia Marks:

    What is the entry price point? I've been looking at a few areas, but I'm really starting my research point of what areas look good and what the STR laws are.

    Hi Alicia, oceanfront condos in Myrtle Beach have been performing very well the past few years and we expect the trend to continue. The laws are STR-friendly, and the cost of entry is rather low. A number of quality 1-bedroom and efficiency units can be had for under $150k.

    [email protected]843-999-2301
    Myrtle Mike Real Estate581 Reviews
    WebsiteView Page
    1Reply
  • J.R. Coffin
    Architect · Providence, RI · Member since 2018 · 137 posts · 55 votes
    4y
    0Reply
  • J.R. Coffin
    Architect · Providence, RI · Member since 2018 · 137 posts · 55 votes
    4y
    0Reply
  • David Haley
    Rental Property Investor · Katy, TX · Member since 2018 · 22 posts · 12 votes
    4y

    @Alicia Marks our home run isn't even built yet! 5/5 with a pool in the Smokys that we went under contract with in Jan ‘21. Delays with permits and the builder, we didn't break ground until July. Finally making progress, hoping to be done Feb/March ‘22 in time for spring season to kick in. Purchase price was $650k, our agent said we could sell it for $1.2M when it's done. Or just hold it and do $200k in STR gross revenues per year.

    2Reply
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