Where, When and How to Buy an Oceanfront Vacation Rental for AirBnB

It has been said that Real Estate investment is all about location, and few properties are more desirable than oceanfront. 

I've always had a propensity and a little luck for living at or near the Ocean. In fact, for the past twenty years, I've lived within walking distance, everywhere from Hillsboro Mile, to Pompano Beach to Venice Beach, Port Orford, Coos Bay and Puerto Nuevo, Baja. If I can't hear the waves, I just don't feel quite at home. 

Likewise, for most vacationing AirBnB'ers, they want to see, hear, touch or smell the ocean or water. It is no surprise that Oceanfront vacation rentals and AirBnB's that offer such amenities are often the most popular are lucrative. 

I have a few client case studies of Oregon Coast STR's acquired and launched this year that speak for themselves:

- 3/2 Oceanview property in Florence Oregon : Purchased for $575k in Spring and booked solid since. The now SUPERHOST's have results exceeded our wildest expectations, but don't take my word for it... LIVE AIRBNB LINK HERE 

The owners get all the credit here. They did their research, stuck to their plan, executed efficiently and genuinely care about their hospitality business.

- 4/4 Oceanfront property in Rockaway Beach Oregon: Purchased for $1.5M with a seller concession two months ago and is already live and getting bookings daily: LIVE AIRBNB LINK HERE 

The investors here also showed incredible perseverance. We worked and analyzed properties for nearly a year before outbidding another offer within a few days of listing. 

These are two Oregon Coast oceanfront or oceanview properties purchased with the intention of short term rental/vacation rental usage and investment that should meet or exceed our Pro Forma prospect guidelines. A general metric for how well a Oregon Coast STR can or should perform is 10% of valuation in gross annual income. 

So for example: a $1.5M property should generate at least $150k in annual gross income. 

Due to increasing regulations, the eligible areas for permissible coastal vacation rentals are continually shrinking, and the opportunity to own an oceanfront or Oceanview property on the Oregon Coast can be quite limited to begin with. 

Additionally, our position is that Oceanfront or Oceanview property in Oregon is somewhat undervalued for what it offers. Either of the above examples would be remarkably more expensive and less attractive as an investment if located on either sides of the Oregon border..

I'd say the optimal budget for a walk to the beach Oregon Coast nightly rental is $550-800k. That is not to imply that there are not areas where a budget of $350k+/- won't get you a very solid STR investment, but likely will not be with a view of the ocean, but might get the sound of the waves when it's quiet. 

The prime areas for STR investment in Oregon for the coming year are:

-Florence, central to Eugene, center of the state, more affordable than the north coast, limited barriers to STR permit. 

-Lincoln City, the heart of the OR Coast, strongest demand, amenities and attractions, higher budget required, specific areas zoned specifically for STR's, barrier to entry is increasing. 

-Bandon, home of the world class Bandon Dunes. High growth rate, year round demand, increasing barrier to entry and very competitive, a few active eligible properties on market at any one time.  

The best way to buy a vacation rental is to be well informed. In general, Bigger Pockets should provide just about all the resources required to begin or execute your short term rental or vacation rental investment portfolio plans. The next step would to get with a strong local and reputable real estate professional and NMLS mortgage broker. Make local relationships and inquiries into strong property management and cleaning teams. Determine who and how the property will be managed and begin the process of identifying, evaluating, acquiring and managing. 

For what it's worth, neither of the above referenced properties had any prior extensive short term rental investment or management experience. 

As we enter 2024, the time to invest in Coastal Rental property is sooner rather than later. Now if your ready.. In 2018 when we purchased our first Oregon AirBnB there were essentially no rules, now in that same small town you cannot obtain a STR rental license unless the property is zoned commercial. 

Next week we'll focus on the future of Short Term Rental investments and how commercially zoned properties and boutique hotels could become the next hot BnB target for savvy short term rental real estate investors.