What to look for in a long-term vs. short-term rental property?

Question

Hi everyone, I'm super new to all of this and to BiggerPockets. My partner and I are very interested in purchasing a property to be a short-term, vacation rental. Question is, do you still look for the most amazing deal on a fixer-upper, or is it better to look for something that doesn't require a lot of rehab and pay closer to market value for it (since, you're assuming much higher cashflow from it)?

Michael Baum · Answer

Hey @Joe White, it's pretty much no different than anything else. Location, location, location. A super nice place where no one goes isn't as good as a fixer in the middle of Pigeon Forge.

It will all depending on your circumstances. Can you afford to buy a place, rehab then rent if it takes 8 months? If so then you get the appreciation of the rehab plus a new place ready to go. If not, then you need to look for something done.

Plus you have to figure in outfitting the place with everything needed. It is possible to find a nice place done that includes everything you need for less than starting over.

It all depends on your situation.

Paul Sandhu · Answer

Location.  I live in the "worst town in Kansas" according to Google.  There is a refinery in this town.  I rent to travelling contractors doing short term jobs in the refinery.  They are all ruffians.  They drive jacked up 4x4s, have neck tats and chew tobacco for breakfast.  Come to think of it, I'm not much different than them.

Brad Hammond · Answer

Hey @Joe White, I totally agree with @Michael Baum.  It depends on your situation and what kind of time/money you have.  Location is going to be the most important thing so I would start your search there instead of condition.

Gregory Murphy · Answer

@Joe White Hey Joe, what the others are saying is totally correct. It just depends on your situation and the location. Location for short term rentals is key in my opinion to the overall success of the investment. Just because a property is a fixer upper that will allow you to rehab it doesn’t mean it will outperform the turn key property. Location is key. Good luck!

What to look for in a long-term vs. short-term rental property?

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