Do small STRs on a lake work or do the houses need to be big

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Do small STRs on a lake work or do the houses need to be big

Kevin Scott
Rochester, NY · Member since 2017 · 47 posts · 8 votes

Does anyone have any luck with smaller STR's? Do they all have to be houses with 5 bedrooms? I'm interested in a house on a lake that is only 1200 sf. I'd like to add another bed and bath to bump up the potential but it would still be on the small side but it's on a popular lake. Any thoughts?

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Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
4y

I have a 550sq ft zero bedroom in the mountains that crushes it.

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  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    4y

    I have a 550sq ft zero bedroom in the mountains that crushes it.

    Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
    8Reply
  • Kevin Scott
    OP
    Rochester, NY · Member since 2017 · 47 posts · 8 votes
    4y

    thanks for the reply, so you are suggesting that families that air bnb a house on the lake don't always travel in packs of 10 only looking for houses that would accommodate large groups?  It's a small house that probably would only accommodate a single family or at best 7 ppl. I'm nervous that if I do this it won't rent out, or the rents will be so low that it won't cover the mortgage. It only rents out for max 81 days of the year (summer time) and the house is listing for $340K but $360 will probably take it.  It will probably sit vacant in the spring, fall and winter.  

    1Reply
  • Kyle H.
    Investor · Bryson City, NC · Member since 2013 · 162 posts · 122 votes
    4y

    I have six STR's all under 800sq/ft and the smallest is 160 sq/ft. They all do well and it's all about the numbers.

    5Reply
  • Jason Stoltzfus
    Rental Property Investor · Lancaster, PA · Member since 2018 · 56 posts · 57 votes
    4y

    @Kevin Scott Where is it? What makes you think that it will sit vacant for 3 seasons?

    2Reply
  • Kevin Scott
    OP
    Rochester, NY · Member since 2017 · 47 posts · 8 votes
    4y

    it's on Conesus lake, one of the finger lakes.  It's a good market in the summer but I don't think anyone is renting a waterfront cottage in the spring (too cold), fall (too cold), and winter (nothing to do).  

    0Reply
  • Ryan Chatman
    Investor · Lehigh Valley, PA · Member since 2019 · 129 posts · 127 votes
    4y

    @Kevin Scott lakefront properties small and large absolutely crush it in the Poconos. I think the strong summer seasons financially make up for the weaker off seasons. Make a nice use of that 1200 sq ft and you'll have no problems getting at least 60% occupancy/year.

    3Reply
  • Paul S.
    Real Estate Agent · Allentown, NJ · Member since 2014 · 39 posts · 44 votes
    4y

    If it can comfortably fit a family of 4, then have at it.  I vacation on Lake Champlain every year with my wife and son. We only need two bedrooms and a bathroom.  You won't be able to cater to large families or groups, but who cares. And if you live close enough you can use it yourself sometimes. 

    3Reply
  • Stephanie JacobsonBusiness Member
    Real Estate Agent · Ithaca, NY · Member since 2016 · 429 posts · 324 votes
    4y

    I agree with everyone above. I have clients in the Fingerlakes (Ithaca area) with smaller STRs that do really well. The larger ones are sometimes harder to book. 

    1Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    We have a larger house and a small one <650sf. They are both full, and the average renters are a single couple. Very few people travel in large packs, just think about it.....you're much more likely to have a couple traveling together or a family.....

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

    Crush it, kill it. I'm not sure what these things mean, but hopefully it's positive!

    [email protected]806-672-7102
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    2Reply
  • Ryan MoyerBusiness Member
    Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 993 posts · 1k+ votes
    4y
    Originally posted by @Collin Hays:

    Crush it, kill it. I'm not sure what these things mean, but hopefully it's positive!

    From my experience "crushing it" can mean anywhere from $10k annual gross to $1,000,0000 annual gross on the same property depending on who's defining "crushing it".

    Coming from Luke I trust it's pretty darn good.  In some of the random FB groups I'm in people will brag that they're crushing it and then when you really push them on it they're doing some insanely low number that seems good to them. 

    I remember visiting Crested Butte last year and met someone who was staying in their condo they rented out as a vacation rental.  They were super elated about how their condo was "crushing it".  When I drilled down with them a little more it turned out they were super excited that the gross revenue was almost enough to cover the P&I on the mortgage (before expenses).

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  • Kevin Scott
    OP
    Rochester, NY · Member since 2017 · 47 posts · 8 votes
    4y

    @Ryan MoyerI was thinking the same thing but I looked at the source and felt more comfortable that his definition might be closer to mine.  

    0Reply
  • Alex S.
    Investor · Metro East of St. Louis (Illinois) · Member since 2016 · 259 posts · 211 votes
    4y

    The short answer is...yes, it could work.  Can't say specially without knowing all the details of this specific place.

    If there is a medium-sized population center nearby, it is likely that it'll be partially booked in the winter as well by non-vacationers.  How close is the nearest Hilton Garden Inn or Marriott Fairfield Inn?

    0Reply
  • Kevin Scott
    OP
    Rochester, NY · Member since 2017 · 47 posts · 8 votes
    4y

    @Alex S.There isn't a Hilton garden inn or Fairfield inn around.  There is a quality inn 12 miles away near a college.  Other than that no hotels to speak of.  Maybe a few beat up motels.  

    0Reply
  • Shannon Jones
    Member since 2021 · 2 posts · 4 votes
    4y

    I can only speak from my experience and travel needs, but as we don't have kids we're often looking for smaller places to rent out either by ourselves or maybe with another couple or two. 

    Also, I've got some friends who are planning to visit the Finger Lakes in a few weeks (mid November) to go wine tasting and had another friend celebrating their birthday in the area this past weekend. So while it will be slower than the summer months, there is always the possibility of some interest. Have you been able to check AirDNA for any insight on occupancy in the off season?

    0Reply
  • Kevin Scott
    OP
    Rochester, NY · Member since 2017 · 47 posts · 8 votes
    4y

    probably not awesome in the winter.

    0Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    @Kevin Scott Why don't you get another place, seems a shame to start in with a place that is such a big maybe......Go find a place that will definitely draw in the people. Search on AIR and VRBO and see where it's happening...

    1Reply
  • Marcus Johnson
    Investor · Saint Paul, MN · Member since 2015 · 663 posts · 512 votes
    4y

    @Kevin Scott

    We owned a small 2 bedroom 1 bath on a large lake for two years. With taxes, mortgage, business and flood insurance, expenses, monthly payments of $1159 a month. Once I insulated the crawlspace and added heat, I was able to rent year round.. Once I figured out all of the systems, I was able to rent it all the time at more than enough to cover all expenses. The problem I ran into was it was an hour away, so turning the cabin around between guess it’s just way too much of my time and work. My suggestion is that you hire somebody to do all of the cleanings snow removal and lawn care. Selling it for a large profit. I don’t regret that decision at all. But it was a really good mourning experience. 

    2Reply
  • Sean Lambert
    Investor · Pacific City, OR · Member since 2016 · 175 posts · 123 votes
    4y

    @Kevin Scott

    Both of our’s are under 1000 sq feet. By not having a party house, you’ll have less wear and tear, so your investment will stay nice longer. It also takes a lot less time to clean and less upfront setup costs to furnish.

    Good luck.

    4Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Originally posted by @Sean Lambert:

    @Kevin Scott

    Both of our’s are under 1000 sq feet. By not having a party house, you’ll have less wear and tear, so your investment will stay nice longer. It also takes a lot less time to clean and less upfront setup costs to furnish.

    Good luck.

    Exactly! You'll hear many of the 'big-time' operators here talking about 'heads in beds' and such, but the more heads, the more stress/liability/pressure. Sometimes smaller is better. Only sometimes :-)

    1Reply
  • Nadia DaggettBusiness Member
    Real Estate Broker · Tampa, FL · Member since 2019 · 92 posts · 60 votes
    4y

    @Kevin Scott of course bugger is better in this instance. However, I find for my smaller STR, I market the property differently and use the method of corporate rentals instead of Airbnb or vrbo. I have been very successful renting to traveling nurses, executives, snowbirds, training staff and more. There are many platforms I use to gain these highly qualified tenants.

    [email protected]813-527-1030
    1Reply
  • Daniel SmythPro Member
    Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes
    4y

    @Kevin Scott

    Idea!

    Look into groups that winter camp, hunt, or fish!

    As a kid my dad took me to lodges for ice fishing often.

    Need a nice warm bed after a cold day on the ice!

    You could also set up a cooking area outside the house for the cooking of fish so your house keeps a good smell.

    [email protected]
    1Reply
  • Brian Armstrong
    Rental Property Investor · Beaverton, OR · Member since 2019 · 34 posts · 29 votes
    4y
    Originally posted by @Nadia Daggett:

    @Kevin Scott of course bugger is better in this instance. However, I find for my smaller STR, I market the property differently and use the method of corporate rentals instead of Airbnb or vrbo. I have been very successful renting to traveling nurses, executives, snowbirds, training staff and more. There are many platforms I use to gain these highly qualified tenants.

     Can you share those platforms? My current home is a small 3 bed 1 bath that I was planning on AirBnB'ing when I move out, but it is centrally located ~ 10 minutes from 2 world wide business HQ's and 15 minutes from the biggest hospital in town so I feel like it could be great for a corporate rental as well. Do you just contact the business directly, list monthly on AirBnB, or what?

    0Reply
  • Kevin Scott
    OP
    Rochester, NY · Member since 2017 · 47 posts · 8 votes
    4y

    thanks for all of your input.  The offer is in.  https://www.zillow.com/homedet...

    we went in at asking with an option to beat out the highest offer by 1K up to $350K.  

    0Reply
  • Michael Glunk
    Real Estate Agent · Evergreen, CO · Member since 2015 · 126 posts · 73 votes
    4y

    @Kevin Scott It really comes down to the market and the competition. 

    #1: What types of people are visiting that area? I'm not as keyed in on Conesus Lake, but more Seneca, Cayuga, Skaneateles where you have a draw of the towns/vineyards that can draw a diverse group of version sizes from families (or multiple families) to couples. What types of people/groups are visiting Conesus? Party size? What features are they looking for? etc. How well is the current market of STRs meeting those groups needs?

    #2: Then it also comes down to the competition. I recently built two homes in the Winter Park Colorado area. I short term rent the larger home (6 bed / sleeps 15) and it does well. The smaller place (3 bed) I long term rent as the competition is pretty tight in this size and the extra effort it takes to STR the property to date hasn't been worth it. So I long term rent it.

    So what is the competition like? Are many of the STRs of a similar size? What is the occupancy rate of those similar sized STRs? (e.g. is the market saturated in that size and therefore occupancy is week or rates are low? or is there room for more?) These are the questions I'd be looking to answer.

    On a side note, I am looking into STRs on the previously mentioned finger lakes, happy to connect directly if you want to kick around any thoughts or ideas.

    Michael

    0Reply
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