If You Were Buying Your First STR Today, Would You Still Do It?

John RacinePro Member

Rental Property Investor · Casselberry, FL · Member since 2008 · 81 posts · 47 votes

Karen, yes, I'd still do it. I'd just go in with a different plan than most first-time STR buyers.

I started in long-term rentals in Orlando, and I still underwrite like a landlord. Before I look at nightly projections, I want to know what the place rents for as a regular long-term rental. If that number doesn't at least cover the costs, I walk away, and I leave tax benefits out of the math. Nightly revenue is the upside, not the reason the deal works.

The bigger change is how I fill the calendar. Most of my units now run as a mid-term/short-term hybrid. Monthly-plus stays are the base, and short stays only fill the gaps in between. Fewer turnovers, steadier income, and if nightly demand dips or local rules tighten, the property doesn't need a new plan. Some of my best stays started as a one-month booking that kept extending.

As for 2026, I'm still looking to buy. I want to use private lending rather than a lot of my own capital. In the meantime I've been growing on the co-hosting side, managing STRs for other owners (disclosure: that's my business). It's been a much cheaper way to scale than buying or arbitrage.

Jimmy LieuBusiness Member

Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes

[email protected]614-300-7535

Good question, Karen. For a first STR today, I'd still do it, but the way I'd approach it has changed. Supply has grown in a lot of vacation markets, so the playbook is to underwrite on conservative occupancy and rates, assume operating costs and insurance will run higher than the first spreadsheet suggests, and check local permit and zoning rules before you ever make an offer. Out-of-state owners also need to be realistic about management, since the team on the ground drives guest reviews more than anything else.

For context, well-run STRs generally land around 15-20% cash-on-cash and tend to bring in roughly three times what the same house would as a long-term rental, but that only holds when the numbers work at purchase. We run short-term rentals here in Columbus and it's been a really strong, rewarding part of our portfolio. What's kept it manageable is a healthy cash reserve and a plan B, so a property can shift to mid-term or long-term if short-term numbers soften. Happy to connect and compare notes.

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Karen CubberleyBusiness Member
OP
Realtor · Sevierville, TN · Member since 2026 · 28 posts · 7 votes
2d
I agree with you on conservative numbers, healthy reserves, and having the right people on the ground. That local team makes a big difference when you’re investing out of state.
I’d be careful about setting an expectation of 15–20% cash-on-cash, though. What purchase price, financing, and management assumptions are behind those returns? Three times the rental income also comes with a different expense picture.
Here in the Smokies, I want to know how a property holds up if revenue comes in 10% below projections. And I agree a backup plan matters, but mid-term or long-term rental numbers need to work independently, too.
I’d enjoy comparing notes. Are those returns based on your current purchases or properties you’ve owned for a while?I agree with you on conservative numbers, healthy reserves, and having the right people on the ground. That local team makes a big difference when you’re investing out of state.
I’d be careful about setting an expectation of 15–20% cash-on-cash, though. What purchase price, financing, and management assumptions are behind those returns? Three times the rental income also comes with a different expense picture.
Here in the Smokies, I want to know how a property holds up if revenue comes in 10% below projections. And I agree a backup plan matters, but mid-term or long-term rental numbers need to work independently, too.
I’d enjoy comparing notes. Are those returns based on your current purchases or properties you’ve owned for a while?
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Michael BaumPro Member

Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes

I would. If the deal made sense in an area that had strong owner support and near zero risk of restrictions.

Having said that, there is no way we could afford our lake house if we bought it now let alone cash flow like we are.

Mike GrudzienPro Member
Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
2d
Quote from @Michael Baum:
I would. If the deal made sense in an area that had strong owner support and near zero risk of restrictions.
Having said that, there is no way we could afford our lake house if we bought it now let alone cash flow like we are.
Michael hit it: the deal has to make sense. It's all in the numbers.
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Karen CubberleyBusiness Member
OP
Realtor · Sevierville, TN · Member since 2026 · 28 posts · 7 votes
2d
I agree that local support matters, but I wouldn't base a purchase on the idea of near-zero restriction risk. Wherever you buy, you need to understand the zoning, permits, HOA rules, and the possibility of changes.
And while your lake house might not work at today's prices, another property in another market could. If I'm buying an STR as an investment, I'm going where the numbers make sense, with the local rules factored into that decision.
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Jules Aton

MD/DC · Member since 2024 · 1k+ posts · 1k+ votes

If I got the same deals or better than when I purchased yes. Mine were more about rebalancing my portfolio and having vacation places than income producing RE investment. What I wouldn't do is buy a second one within 11 months because there was a much bigger learning curve as compared to what I remember decades ago when I started with LTRs. Overall they were decent deals, have appreciated and we really enjoy them.

Karen CubberleyBusiness Member
OP
Realtor · Sevierville, TN · Member since 2026 · 28 posts · 7 votes
2d
That makes sense—having places you enjoy was part of the return for you, too. And your point about buying the second one before getting through the learning curve is helpful for someone just starting out.
What would you want to have figured out with the first property before buying another?
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Jules Aton
MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
2d
My 1st rehab was completed at the end of beach season so I only had limited experience with PM before I started 2nd rehab in different location with another PM. They were both skilled at handling all the guest interactions which I much appreciated however the heads in the bed strategy didn’t work for me. Properties were booked back to back at low prices 20% less than I have been getting since taking over myself. I wouldn’t have bought the 2nd one if I knew I would be self managing the 1st although I love the snowbird place so maybe it’s best that I did bite off more than I wanted to chew.
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Jorge VazquezBusiness Member

Real Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 699 votes

I own 2 STRs and about 38 long-term rentals, and I still prefer long-term rentals. If I were buying another STR today, I would focus more on corporate rentals and 30+ day stays, targeting traveling nurses, insurance companies, relocating families, and business professionals. I've found this strategy works better for me than relying on vacation rentals, especially in suburban markets. Fewer turnovers, more stability, and less headaches. I would also make sure the property works as a regular long-term rental in case the STR strategy doesn't work out. I'm not against STRs, but I think having multiple rental strategies is the way to go in today's market.

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Karen CubberleyBusiness Member
OP
Realtor · Sevierville, TN · Member since 2026 · 28 posts · 7 votes
2d
I can see why that approach works for you, especially in suburban markets. Here in the Smokies, vacation rentals are generally a better fit than long-term rentals, so that backup strategy doesn’t always make financial sense.
I agree with having options, but I'd buy based on the rental demand in that particular market. For a Smokies STR, I'd focus on conservative revenue projections, realistic expenses, and healthy reserves rather than counting on a switch to long-term rental to make it work.I can see why that approach works for you, especially in suburban markets. Here in the Smokies, vacation rentals are generally a better fit than long-term rentals, so that backup strategy doesn't always make financial sense.
I agree with having options, but I'd buy based on the rental demand in that particular market. For a Smokies STR, I'd focus on conservative revenue projections, realistic expenses, and healthy reserves rather than counting on a switch to long-term rental to make it work.
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Matthew Tregoning

Property Manager · Melbourne, FL · Member since 2019 · 404 posts · 167 votes

From the management side, I’d spend more time on the ordinary Tuesday before getting excited about the peak weekend. Who handles a failed lock, a missed clean or a leak when you can’t get there? Before adding a second place, I’d want the first to run for a week without me personally solving every problem.

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Jimmy LieuBusiness Member

Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes

1d

Thanks for starting this, Karen. Short answer for me is yes, I'd buy again, but I'd underwrite it more conservatively than most people did a few years ago. Well-run short-term rentals generally land around 15-20% cash-on-cash and tend to bring in roughly three times what the same house would as a long-term rental, but that only holds if the deal works with realistic occupancy, higher cleaning and utility costs, and a furnishing budget you've actually priced out.

What I'd do differently as a first-timer is run every deal through a plan B before closing. If the property still pencils as a mid-term or long-term rental, a soft season or a regulation change is an inconvenience instead of a crisis. I'd also hold a real reserve and check local permit rules before making an offer, since those can change the whole math.

On our side we run short-term rentals here in Columbus, and it's been a really strong fit for us. Happy to connect and compare notes.

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Karen CubberleyBusiness Member
OP
Realtor · Sevierville, TN · Member since 2026 · 28 posts · 7 votes
1d
Thanks for sharing! I agree with taking a more conservative approach and keeping a real reserve. A strong season is great, but you need to be comfortable carrying the property through the slower months, too.
The plan B piece is where the market really matters. Here in the Smokies, a vacation cabin's purchase price and expenses can make it tough to work as a long-term rental. That makes getting the STR numbers right upfront even more important.
I’d also be careful treating 15–20% cash-on-cash as an expectation across the board. So much depends on the purchase price, financing, and operating costs.
Glad Columbus has been a strong fit for you! What’s one expense that surprised you when you first started?
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Shalom Kaiser

Real Estate Broker · Denver, CO · Member since 2026 · 9 posts · 1 vote

1d

Yes. Different buy though. 12 years doing this in Colorado, 30+ launches, still own 18, and the lesson that stuck is the rules matter more than the house. Pretty cabin in a town that rewrites its licensing next year? Bad deal. Now I want the license to be the boring part, and I want the numbers to hold up even if it ends up a mid term rental. Still buying. Just pickier. Looking at Colorado? Message me.

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Rati Meskhishvili

Tbilisi, Georgia (country) · Member since 2026 · 13 posts · 3 votes

1d

@Karen Cubberley , I am answering from the numbers side, since I analyze deals rather than own one.

I believe your 10% below projection test is the right one. And on listings in your area it hurts before you even get there. I ran 5 cabins listed around Gatlinburg, Pigeon Forge and Sevierville this month using each seller's own revenue, 25% down payment at 6.75% interest rate and a manager. 4 of them lose money at the seller's asking price with no haircut at all. They would need roughly 61%-86% occupancy just to break even when the area averages about 53%. None of the 5 cabins reaches 8% cash-on-cash at the asking price which is why the 15%-20% figure surprised me too.

So far someone buying their first STR, I don't think the question is STR or not, it is more like "at what price". These would get me off the sidelines:

Price near where a typical year breaks even after the mortgage
Deal that still works with a manager so self managing is a bonus and not the plan
Personal use valued separately and not counted as an income.

Are you seeing sellers move towards that with price cuts or offers well under asking price getting accepted?

(I used AI tools to help run the numbers.)

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Karen CubberleyBusiness Member
OP
Realtor · Sevierville, TN · Member since 2026 · 28 posts · 7 votes
12h
I appreciate you running the numbers, and I agree that purchase price matters. I’d also want to know more about those five cabins. Have they been updated? What amenities do they offer? How do they compare with the properties guests are actually booking?
Here in the Smokies, location, condition, design and amenities can make a big difference in nightly rates and booking potential. An outdated cabin with basic amenities may perform very differently from an updated property with features guests are willing to pay for.
That doesn’t mean every renovation or amenity pays for itself. Any improvements need to be included in the buyer’s budget, and the revenue assumptions should come from comparable cabins.
I’m with you on including management and testing a revenue shortfall. The purchase price has to work, but we also need to understand exactly what we’re buying and what it will take to compete.
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Rati Meskhishvili
Tbilisi, Georgia (country) · Member since 2026 · 13 posts · 3 votes
8h
@Karen Cubberley Fair point, conditions matter a lot.
One thing that helps here in my opinion is that I used each seller's own 2025 gross revenues, so the revenue already reflects how the cabin performs as it is today (amenities included). The one with an indoor pool is actually one of the worst at its asking price, so the pool seems to be priced in already.
For Cabins C, D, and E to break even at the asking price with a manager, they would need about 50% more booked nights at the same rate. A renovation can raise the rate, but it also adds to the money you put in. From what you see locally, roughly how much does an update (for example hot tub, game room, new interior, etc.) add to the nightly rate?
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Karen CubberleyBusiness Member
OP
Realtor · Sevierville, TN · Member since 2026 · 28 posts · 7 votes
8h
That’s a fair question, and I wouldn’t give you a blanket dollar amount without comparing similar cabins. A hot tub, game room, or interior refresh won’t add the same value to every property. Location, views, size, and what competing cabins offer all matter.
I agree that the seller’s 2025 revenue is a useful starting point. I’d also want to look at management, pricing, and availability to understand whether there’s room to improve performance.
My point is that condition and amenities deserve a closer look, but I wouldn’t assume an update could close a gap that requires 50% more booked nights. If the purchase price plus improvements doesn’t work with realistic revenue and expenses, the price needs to come down—or we keep looking.
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JD MartinBusiness Member

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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes

6h

I probably wouldn't do it again. STR is more of a hospitality service business than a real estate business, and I found that I was much happier in my LTR field than the STR field. I've commented about it on the other thread going with the AirBnB nonsense, but the platforms were a very big part of why I wanted out. I had hoped over time to build to more direct bookings than using the platforms but it never worked out that way, even trying some of the burgeoning direct platforms like Houfy. There were some other structural issues that weren't solvable in my market (Kissimmee), so that didn't help, but the aggravation of the platforms made what might otherwise be tolerable if not very profitable infuriating.

I've learned never say never - if I was doing it locally, where I had a lot more input and control over the product, and I thought it could pull enough profit to make it worth my time, I would consider, but probably not until there's a serious player in the direct booking or a "connection only" middleman that can upset the current triumvirate. No one gets to run my LTR business, and I resent a middleman that's already taking a healthy share of profit also sticking their fat nose in my business of running my property the way I want to run it.

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Karen CubberleyBusiness Member
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Realtor · Sevierville, TN · Member since 2026 · 28 posts · 7 votes
5h
I understand your frustration, especially with the platforms. You’re right that STRs are a hospitality business, and the return has to justify the work involved.
That’s one reason we highly recommend self-managing or working with the right cohost. You generally have more input and control over pricing, maintenance, marketing, and the guest experience than you would with a traditional property management company. It doesn’t eliminate the platform issues, but it gives you more say in how your business operates.
It also takes the right property, at the right price, in the right location, with the right amenities and marketing. No single piece guarantees success—it’s how all those factors work together. Even then, it has to fit your goals and be worth your time. I can respect choosing LTRs when that’s the business you enjoy more.
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J CastroBusiness Member

Lender · Florida · Member since 2025 · 724 posts · 257 votes

1h

Quote from @Karen Cubberley:

I've been thinking about how much the short-term rental industry has changed over the past few years.

Between higher operating expenses, financing costs, increased competition, and changing guest expectations, investing in an STR today requires a different approach than it did just a few years ago.

As an STR owner and real estate professional specializing in investment properties in the Smoky Mountains, I've seen firsthand how important it is to understand the numbers before you buy.

But I'm interested in hearing from investors across the country.

For experienced STR owners: Knowing what you know today, would you buy your first STR again? What would you do differently?

For those considering their first STR: What's holding you back? Is it financing, finding the right market, managing from out of state, or uncertainty about profitability?

And here's another question: Are you still actively looking to acquire additional STR properties in 2026, or are you sitting on the sidelines?

I'd love to hear different perspectives from both experienced and aspiring investors. Let's have a real conversation about where STR investing is headed.

Hi @Karen Cubberley welcome to BP!

Great perspective! The short-term rental market has evolved, and today's investors need to be more disciplined than ever when evaluating potential acquisitions.

I believe the key is buying based on the numbers, not just the property's potential. Financing costs, operating expenses, seasonality, occupancy rates, and local regulations all play a major role in determining whether a property will perform as expected.

From a financing perspective, investors should also consider how the right loan structure can impact cash flow and long-term returns. We work with real estate investors to explore financing strategies that align with their investment goals.

Despite the challenges, I believe opportunities still exist for investors who conduct thorough due diligence, understand their markets, and structure their deals properly.

The question isn't simply whether STR investing is still worthwhile in 2026—it's whether the specific deal makes sense under today's market conditions.

I'm curious to hear how other investors are adjusting their acquisition strategies in this changing environment.

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