All Forum Posts by: Melissa J.
Melissa J. has started 1 posts and replied 2 times.
Post: Would you ever buy a STR if you know it won't break even on cash flow?
- Posts 2
- Votes 1
Why consider? Huge tax benefit. The STR regulations mean it would, at best, cover the cost of our monthly expenses or be slightly negative. But the tax benefit + likely appreciation equate to a good ROI. Then I would do a 1031 when I am semi retired to buy a property that requires more active management and generates cash flow. In the meantime, we can use it a few weekends a year. I fully understand the time and energy it takes to have a successful STR.
Post: Would you ever buy a STR if you know it won't break even on cash flow?
- Posts 2
- Votes 1
I'm looking in the Palm Springs area which is highly regulated and limits STR bookings to 26 a year. I've done the math and the property I like won't break even and will not be positive for cash flow. But the tax benefit in year 1 is strong and if I assume some appreciation (3-4%), the ROI in 5-7 years is good. Wondering if this is too risky though- prices may come down further in PS.