Why BRRR a short term rental is a better option than LTR
It’s simple.. real simple.. Return on Investment. While your average long-term rental is only going to bring you hundreds of dollars a month, your short term rentals will bring you thousands of dollars a month. We have helped many of our clients acquire properties in the North Georgia Mountains near Blue Ridge and in the Gatlinburg and Pigeon Forge areas as well. The net revenue after expenses and property management can range from 35-60% cash on cash investment in the first year. With the property managers we connect our clients with, second and third year projections only go up from there. Last but not least, our clients have the option to visit and/or gift (family, friends, colleagues) these vacation properties in a few of the hottest markets in the United States.
Agreed. I think this is especially true in the short-term, as many more are wanting to travel post Covid. In addition, you don't need to even have a job or any personal income to qualify for an investment mortgage to buy these properties (although if you use these low doc DSCR loans, you would not be able to occupy them for your own personal use).
Oh god, Blue Ridge. Like leading lambs to the slaughter right now.
Quote from @John Herold:
Agreed. I think this is especially true in the short-term, as many more are wanting to travel post Covid. In addition, you don't need to even have a job or any personal income to qualify for an investment mortgage to buy these properties (although if you use these low doc DSCR loans, you would not be able to occupy them for your own personal use).
John good stuff you mentioned there for sure. All positive and true vibes. Its ( DSCR) and amazing product for those wanting to jump in though maybe the DTI is teetering. Will be using one or more to buy several properties.
Quote from @Ryan Moyer:
Oh god, Blue Ridge. Like leading lambs to the slaughter right now.
AH a skeptic. All ears to see what you know that no one else seems to be privy to.
@Pete Galyon, this all implies that a) it is well managed, b) there are not too many other STRs competing for the same guests, c) there isn't another wildfire that takes out half of Gatlinburg again (okay that was a cheap shot and clearly effects both LTR and STR rentals), and most importantly d) the owner WANTS to be in the hospitality business.
I am also curious about your very specific language: net revenue. Does that include PITI on the mortgage? Does it include repairs and vacancy? And most importantly, does it include a full year's hold, since on average, per AirDNA, Gatlinburg is 94% occupancy in summer, but 50% in winter?
Hey Evan yes. We always like to think you would find( we help our clients lock down a great manager) and that is always best case scenario. Yes, wildfires happen every so often( 10 -15 years or so) and if you base your numbers off of the good then not the bad, it is still the best market to invest ( per Forbes 2020-2021). It does include all fees and maint. The numbers and occupancy rates we see are on average 85% which is as good as any place in the U.S. and believe it or not the area is actually growing in size and popularity as it is expanding into the Wears valley part of the reigon.
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Oh god, Blue Ridge. Like leading lambs to the slaughter right now.
@Ryan Moyer what do you mean by your comment? I am new to STR and just curious what you mean.
Quote from @Ryan Moyer:
Oh god, Blue Ridge. Like leading lambs to the slaughter right now.
Ryan - what are you seeing in Blue Ridge? I'd love to see some reports or some data!
Completely agree Pete - those areas are STR heavy and I'm sure your clients are seeing great returns on their investments