Waco is a very unique rental market due to our location and the Magnolia and Baylor effect. We generally see occupancy rates increase around major events (Silobration, Spring at the Silos, Holidays, Baylor Games). I reached out to a local STR property manager in lieu of high inflation, stock market volatility, and higher interest rates.
I asked him how rentals are going compared to years past. His response is one that I take very seriously as I start to gauge short term rentals and vacation homes as a whole.
"Our downtown properties are doing well. On average probably around 65% + booking rate. A few at 90%+. This is down from normal years though. All of the condos should be 90+ right now. Lake properties with lake view or pool are doing well. Established properties 2 years plus on market are averaging 65%+ as well. Properties outside of Waco that require a drive are not doing well at all. In some cases I am seeing no bookings. Owners are looking at the option of renting them for guests staying in the area for a few months." -D&L Vacation Rentals-
Two years ago, we never thought we'd see a red day from the investing standpoint. I still have clients calling me asking about STRs in Waco. My response to them has been to error on the side of caution. Taxes and insurance are on the rise. People are trying to purchase STR's at twice their market value in some cases. Make sure the numbers work and bake in some vacancies in the math if you're further distance from Magnolia/Downtown and lack unique features such as a pool, lake view.
I hope this helps investors looking to invest in the Waco market and would appreciate any other's opinion on the STR market.
Thanks @Trevor Caswell. I had what looked to be a great deal on some land and a small house in Robinson not 5 minutes from the circle. However, after looking at how other STR's in the market were performing and seeing the writing on the wall with inflation, taxes, insurance, and rate hikes. I rescinded my STR permit request with Robinson and terminated the contract. This only would have been a good deal at past booking rates for STR's. As a long term rental I'd have to pay a lot less for it. All that to say, I absolutely agree with and appreciate your post!