What will the future hold for STRs?

[Seth Weaver]

Just finished a few deals, and now on to the next one. I have 2 options- I bought some property a year ago to build a short term rental on; however, with the talk of a possible recession coming and rent on the rise, I'm thinking it may be better to look for another multi-family deal and hold off on the STR.
If the market remains steady, the STR deal would bring in more cash flow. I just don’t know if it would hold up during a down market. 

What are your thoughts? Will a short term rental hold up during a recession? Which would you choose in this situation? 

Thanks in advance! 

[Eric Yu]

Quote from @Seth Weaver:

Just finished a few deals, and now on to the next one. I have 2 options- I bought some property a year ago to build a short term rental on; however, with the talk of a possible recession coming and rent on the rise, I'm thinking it may be better to look for another multi-family deal and hold off on the STR.
If the market remains steady, the STR deal would bring in more cash flow. I just don’t know if it would hold up during a down market. 

What are your thoughts? Will a short term rental hold up during a recession? Which would you choose in this situation? 

Thanks in advance! 

I've had conversations with lots of different investors about this topic. Usually, the sentiment is the same: buy correctly & be conservative with your estimates. That said, it's unlikely the STR market is even remotely similar to 2020 and 2021 anymore. You can't just throw money at a property & expect it to cash flow $2-$3k a month anymore. As long as you're being smart with your purchasing, you should have no issues finding good STR deals (even during a recession).

Unless it's a home run hit, I'm avoiding STRs right now. If you have a cash flowing multi-family deal where the #s make sense to you, I'd go that route instead.