The short-term rental (STR) strategy can take on a different form depending on the market in which it is executed. If you purchase a STR in an established vacation destination, such as a Florida beach town or the Smoky Mountains, it often comes furnished and you don't need to worry about setting up your unit.
In a metro area like Denver, however, this is usually not the case, and is something many investors fail to take into account when running the numbers on a potential STR. They focus only on cash flow, taking into account typical monthly costs such as mortgage, utilities, reserves, capital expenditures, cleaning fees, etc. While this analysis is certainly important, Denver investors cannot ignore the upfront time and money output required to get an STR up and running.
In analyzing a potential STR investment in the Denver area, include these estimates as upfront costs (these are strictly furnishing expenses, not including any rehab work):
- Living Room: $2k⠀⠀
- Dining Room: $700⠀
- Kitchen: $750⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀⠀
- Bedroom: $1.5k⠀⠀⠀⠀⠀⠀⠀⠀⠀
- Bathroom: $300⠀⠀⠀⠀⠀⠀⠀⠀⠀
You can certainly furnish a STR for more or less, but these are numbers I try to stick to in putting together a nicely furnished rental that includes personal touches and local flair.
If you have any questions about this facet of STR investing, please don't hesitate to reach out!
@Alexa Ferguson great info!! Thanks for sharing!