The future of STRs in your local market?

103 Replies

Yet another chance to be featured in the next issue of BiggerPockets Wealth Magazine... Short-term rental investors, it's your time to shine!

In 50 words or less, let us know: What do you think about the future of short-term rental investing in your market?

By responding here, you're allowing us to print your name and response, if chosen, in the next issue of the magazine. We're excited to hear what you have to say!

Government spending on infrastructure has increased recently.  Wind farm, fiber optic internet systems, contaminated soil removal.  I've started renting to traveling workers doing those kinds of jobs.

The Hamptons, the ocean, the mountains, the oldest city in America, the future of STR's continues to be blindingly bright.

@Paul Sandhu As our school superintendent used to say, you clean up nicely.


We have short term rentals near downtown San Antonio. Hospitality is a top industry in the city, and with all that's happened over the last year, people still want to travel, but staying in a home over a hotel will make many feel more comfortable.

The Orlando market has historically been extremely competitive, with over 65,000 vacation rentals that cater to tourists visiting Disney and the other theme parks. After the pandemic, as property managers, we have never seen stronger demand for our homes. Travelers are itching to get back to Disney, and many families who may have chosen a hotel in the past are now staying in vacation rentals. Our homes are already fully booked, and given the fact that international travel restrictions are still in place, we see the demand getting even stronger. Our biggest challenge is keeping up with this demand, and finding new homes to book to our guests.

We own 2 STR's and see the duration of stays and nightly rates increasing. We're looking to continue to leverage the increased income to purchase additional properties at a faster rate. Success depends largely on location and your ability to manage the properties.

The short term rental market has been a place of tenacity fueled by promise.  The unfavorable circumstances during the pandemic lead to a significant decrease in available rentals in the market of Philadelphia.  Record travel and social demand will lead to the largest window of opportunity in vacation rental history.

Originally posted by @Kaylee Walterbach :

Yet another chance to be featured in the next issue of BiggerPockets Wealth Magazine... Short-term rental investors, it's your time to shine!

In 50 words or less, let us know: What do you think about the future of short-term rental investing in your market?

By responding here, you're allowing us to print your name and response, if chosen, in the next issue of the magazine. We're excited to hear what you have to say!

 

I have been an Air bnb host since 2010 owning my first one blocks away from the Air bnb headquarter in SF. I see the STR business evolving as the experience of renting a STR versus a hotel is completely different. As millennials are having families and doing a big chunk of traveling, they need more STRs unlike the Gen X generation in which everywhere their parents brought them, they were stuck and crammed in one hotel room sleeping on 2 queen size beds. The STR experience has a lot of run and as many home owners are investing in buying STR or some becoming Arbitrager, i see communities becoming more receptive to the concept, but it is not without political fight at the ballot box.

STR are not going anywhere. True some areas are getting much tougher with restrictions or extra taxes (like in Austin TX) but these areas are also over saturated with STR and over priced properties. Look around and figure out WHERE people want to go and look for those areas a little less traveled to get a better ROI. For example: Golf Shores is pretty high priced with tons of competition, but Dauphin Island gives you similar rental rates and much lower entry point.

Finally, I mostly invest for cashflow, BUT started to do STR for appreciation: Bought in Bonita Springs December of 2020 for $362k and put under contract May of 2021 for $475k...it was fully rented that entire time and HUGE appreciation with no work done, I have never even spent the night there!

With the loss of tax revenues from STRs, the cities close to me clamped down hard. I think it'll eventually find equilibrium once they figure out ways to accurately collect all those hotel taxes again.

Our first investment is an STR in Big Bear Lake CA, the closest four season mountain resort in Southern CA. We got a great deal, bought the cabin last December 2020. Rehabbed for a few months. Next, great cash flow by Renting. As for now, appreciation is phenomenal. With equity in our side, Refinancing and Repeating the process is next. Thank you Biggerpockets for all the tools and education. We still have a long and fun journey ahead. We are super excited.

Updated about 1 month ago

STR rentals in Big Bear is highly regulated. The city has strict rules. They want all STR properties to have a license and there is a proposal for higher fees for increased local government revenue.

I invested in STR, I call them Vacation Rentals in Hawaii, in 2014 and reinvested in 2020, and I'm in contract to buy a third property. I am happy with these investments so far, I do some management by myself and I'm getting some help too, and this hybrid solution works well. This year has started to be highly profitable. The challenge/danger for the investor is the regulatory framework. It's important to comply of course, and new government mandates can happen any time. Last year, Vacation Rentals were forbidden to operate for more than 6 months for instance.

@Kaylee Walterbach

Short term rental operators will continue to push the boundary of creativity and the impossible as the demand for exotic and experiential lodging exponentially grows. From shipping containers to tree houses, the people of the world will cherish these artistic creations to reflect and rejuvenate.

I've been in the short-term rental market since 2005 and In the Florida market short term rental was prominently used by people going on vacation. After Covid forced more virtual work environments we are seeing an influx of people living a nomadic lifestyle. When you could live anywhere you want and work remotely why not be in a subtropical region with no state income tax.

I feel demand for Airbnb is going to be driven by amazing locations, unusual property Style such as yurts or tiny homes and great amenities like a property being on a lake or offering a pool in hot tub.

In addition to that, people want space and not to be on top of their neighbor. The hotel model is not as advantageous as a private dwelling with multiple bedrooms and private amenities.

I also feel the hotel management companies are finally on board with Airbnb being a true competitor. Now they are trying to get municipalities and local governments to regulate Airbnb in the same matter that hotels are regulated. Once this happens will be allowed in more locations and much easier to acquire because there will be less research on if you could legally do it. 

The Tide is turning!

General answer:

 The pandemic attracted new customers to short term rentals as a way to avoid close contact in hotels. Some of these people will go back to hotels for benefits such as location, onsite services (food, fitness, pool), chain consistency and reward programs. Even as people defect back to hotels, some will stay with short term rentals as they value the experience, private parking and larger living space. 

My market:

AirBNB reported 30% year over year booking increase in my market every month through the pandemic. We never experienced shut down, so we became a popular travel destination. We have rented to digital nomads, people looking to relocate and traveling work professionals. Demand continues to exceed units in our market.

In my market, the only thing getting in the way is local government restrictions. Due to this, we have to be selective in areas. People are not flying like they once were and are staying close to home. I see this growing exponentially as more people start to travel.

@Mike Shulman and @Marc Rice  properties don't have to be yurts, tiny homes or tree houses to stand out on the booking websites :) Here in Orlando, as you know tourists are seeking the Disney/theme park experience during their entire vacation. Decorating choices including great themed bedrooms, spectacular game rooms, movie theatres etc. can add excitement and drive bookings.

Similarly, we recently stayed at an Airbnb in Miami. The host hired a local street artist to paint murals in the units. Make the home visually exciting and authentic to the market you're in.

I own a short term rental in York, Me. I bought it in April of 2020. We adjusted the cancelation policy to 7 days, but still lost 1/2 our bookings. We just as quickly re-booked for a great 2020 rental season. 2021 is absolutely crushing it! I'm optimistic that people are trying STR and will then continue to book in the future.

Big Bear Lake, the #1 destination in the US (Airbnb), July 2019 is a 4 season resort and outdoor enthusiasts paradise. As a property manager, STR owner, and advocate, this sleepy village in the mountains near Los Angeles struggles to find balance between residents and the booming STR market.

The Nashville STR market has exploded since the first of the year. The inventory that we had last year is quickly being bought up and all my clients that I've sold STRs to and my other local STR contacts are all reporting full calendars and are already looking at numbers similar to pre-COVID. Can't build them fast enough here. Nashville is as busy now as it's ever been downtown and as much as we've grown the last 10 year, the future growth is projected to be even greater.

Local regulations are a headwind to future STR Investors in high demand markets. Investors and operators will need to be "surgical" in their approach to finding STR properties. The demand is STRONG from travelers, but finding the right STR property that you can also legally permit is tricky. Do your research up front... know the STR permit process in the market, the master deed restrictions and the HOA/COA rules. We have 3 STR's in Asheville, Nashville, and Louisville. Each market presented unique challenges, but we now have 3 thriving and legal investment STR's.