STR Investing Lessons Learned in the Last Three Years

I’m an investor who owns 10 STR properties. Here are the lessons I’ve learned after three years.

In a short amount of time, I’ve built my real estate business from one short term rental property to ten all beautifully renting. But it hasn’t been easy, here are the main lessons I’ve learned in the last three years.

Self-Manage versus Hiring a Property Manager

This is a huge discussion for many people! Always the first topic brought up amongst my real estate investing friends who are considering investing in a short-term rental or STR for short. I started as a self-manager which is fun and easy if your property is turnkey and your team on the ground is reliable. But, as soon as one of these goes askew you can throw it all out the window and bet that your life is about to get a lot more difficult! There is value in paying someone who specializes in managing these types of properties. Yes, there is a cost here, but also peace of mind for you and your family.

Calculating Cash on Cash

Running your numbers before purchasing can save you time and future headaches. While most savvy investors are familiar with doing some sort of underwriting before investing in a property, not every investor knows how to run numbers on a short-term rental. STR properties are special because you have several line items you wouldn’t normally have with a long-term rental. Some of these include utilities, furnishings, linens, and cleaning fees. It is important to truly understand all the monthly carrying costs that will be involved for an investment property of this nature.

Property Style & Location

Most importantly, the biggest lesson I have learned over the last three years is to buy the right property in the right location! If you are in a beach market, buy beach front (or very close to the beach). If you are in an area where travelers like to stay in cabins, then buy a cabin. Seems obvious, but even I have strayed from my own tried and true practices to make a deal. Location is also important, in most vacation markets you want to be within a short drive of the main attractions that are drawing your guests to the area (a good rule of thumb is 20 minutes or less). While you can buy something non-optimal and not as close to attractions and still make a good profit in most cases, you should weigh the price differences and the location differences to see if the deal really makes sense for you.