🔥 Why I Sold Most of Our STR's: Navigating The Future of STR Investments

^{TOGETHER WITH:}

Discover Full Service Vacation Rental Management

Hello STR Scout Members,

I sold nearly all my STR’s and I am preparing for what could be the next major real estate market shift. In this issue, I share:

🙇 The strategy behind my decision to sell, trends I’m watching, and how I’m positioning for uncertain times

🏡 17 new STR deals in 10 destinations

📰 Trending news nuggets to stay informed and ahead of the game

Thank you for being a valued part of our STR investor community.

Cheers,

Andy Thoms
STR Scout

😎 The Journey is The Reward!

Why I Sold Most of Our STR's at Peak—Navigating The Future of STR Investments

I have been investing in real estate since the late 90s and started buying Airbnb properties in 2014. Over the years, I’ve learned a lot as an investor, but I’m always learning and adapting. I’ve been reflecting on where the short-term rental (STR) market is headed, especially in the U.S. We’ve had some great success over the past few years, but I’ve made some big changes since the 2022 peak.

By 2022, I had 16 STR doors including new builds, designed build to rent Airbnb's, condos, and rehabs. We maintained Superhost status every quarter, hosted thousands of guests, and doubed or tripled our equity. That year, we achieved a 97% occupancy rate and set a new annual revenue record.

After two years of rapid, Fed-fueled (post-covid) appreciation—growth that would typically take a decade—I knew it was time to think about selling to harvest artificially created equity growth. With prices growing out of control, I was not going to chase the market, and I was no longer a buyer.

I had two choices: sell high or reinvest heavily to update properties that had been ridden hard for years. I chose to start selling my turnkey STRs, keeping the best and selling the rest. And so far, I’m glad we did. We sold at peak revenue which helped us get peak sales prices at the top of the market.

For those I still hold, margins have compressed, expenses are rising faster than normal, and revenue, ADR, and occupancy are all slipping. I’m working twice as hard for the same—or less—return. While this is challenging, I’m grateful that I made my investments at the right time and for the right price, which allows me to weather the current market conditions.

As I made the decision to sell in 2022, everyone was diving headfirst into the STR market. It was a challenging call to make because it felt like going against the tide, but I’ve always believed in evaluating the situation carefully and making the best decision based on what I see. I was fearful when everyone was getting greedy.

So for now, I’m keeping my powder dry as we embark on a new STR investment journey. We are buyers, but only for the right deal. Our mission is to travel, and explore premier global destinations where you can invest in STRs that allow you to live better for less.

Here are the key trends we’re closely monitoring that could impact the future of STR property values, cash flow, and equity growth potential:

Follow us on our journey. We will be sharing the best deals and investment ideas we can find, in the best destinations, where we can live and invest bette for less!

Disclaimer: None of this information is investment advice. Always invest for your own reasons and seek professional advice from a licensed professional advisor before you invest.

TOGETHER WITH VACASA

Get your personalized income estimate today to see how Vacasa can help you create more passive STR revenue in 2024. Vacasa out-books 92% of local managers. More revenue, with less hassle.

Mountain Escape in Clyde, NC - Amazing STR

$475K | Clyde, NC: Charming 2BD, 2BA home, 1278 sqft, perfect for a mountain getaway.

• 2 bedrooms on the main level, plus an upstairs bonus room currently used as a bedroom.

• Recent Improvements! Nearly everything is under 4 years old.

• Elevation: 2966ft, offering breathtaking views and fresh mountain air.

• Average Host: $51k-$99k | Super Host: $99k-$118k

View Property Details
STR Agent: Tyler Coon
Text or Call: (828) 620-2541
Website

Want to see your property here? Learn more

STR HOMES FOR SALE

Brought to you by our Sponsors:

💰 STR Loans: DSCR rates are dropping fast! Get your cash-out refi loan quote or pre-approval letter in minutes.

💸 STR Insurance: Save big on STR insurance. Get a competitive quote in seconds and see how much you can cut costs.

🏡 Vacation Rental Management: Explore full-service management and get a personalized STR income estimate today.

FSBO | OFF-MARKET STR’s

$375K | Hollywood, AL: Turn-key 3BD, 2BA lakefront A-frame cottage with 1134 sqft. Proven $40K annual Airbnb revenue. Fully furnished, ready to generate income immediately. View Post

$479K | Panama City Beach, FL: 3BD, 2BA home in Laguna Beach area with brand new kitchen, HVAC, and LVP flooring. Large .56-acre lot with fenced yard. No 5% tourist tax. View Post

$540K | Pigeon Forge, TN: STR-approved 2BD townhouse with $76K revenue last year and $30K in future bookings. Low expenses. Builder in phase 2 with higher prices. View Post

$549K | Kalamazoo, MI: 3-story brick Victorian in downtown. Sleeps up to 18 across three floors. Proven STR revenue, close to new $300M stadium. Furniture optional. View Post

$1.125M | Whitefish, MT: 4BD, 2BA townhouse zoned for STR with city permit. Sleeps 8. Between downtown and Whitefish Mountain Resort. Includes access to Whitefish Lake amenities. View Post

ACTIVE STR LISTINGS 

$435K | Birch Bay, WA: 3BD, 2BA end-unit condo with ocean views, 1070 sqft, and 2 decks. Successful 15-year STR history. Fully furnished. Includes 2 dedicated parking spaces. View Post

$470K | Gulfport, MS: 3BD, 2BA 2000 sqft home near the beach. Fully furnished and used as a successful STR. Modern design, 3 years old. Seller offers $7K credit for rate buy down. View Post 

$495K | Divide, CO: Newly remodeled 3BD, 2BA home with 1728 sqft. Modern luxury meets rustic charm. Airbnb-friendly, near Pikes Peak. Main level master, spacious backyard, and bear-proof storage. View Post 

$525K | Omaha, NE: 3BD, 4BA brick Tudor near Elmwood Park and Aksarben Village. Fully updated with new hardwood floors, outdoor entertainment space, and Airbnb potential. View Post

$535K | Tracy City, TN: New custom-built 2BD, 2BA tiny home in gated STR-approved community. 1115 sqft with vaulted ceilings, screened porch, and outdoor fire pit. Completion May 2024. View Post 

$549K | Long Beach, WA: 2BD, 2BA oceanfront condo with stunning views and vacation rental zoning. Two levels with balconies. Short walk to beach and Discovery Trail. Low HOA. View Post 

$650K | Broken Bow, OK: Luxurious 2BD, 2BA modern farmhouse cabin in Hochatown. Generates $70K+ in annual revenue, on track for $75K this year. Ideal STR investment. View Post

$699K | Sevierville, TN: Fully remodeled 3BD (2BD septic), 2BA creekfront home with 2000+ sqft, plus a 596 sqft detached game room. Expansive deck, hot tub, and firepit. Ideal STR near Pigeon Forge. View Post

$845K | Sevierville, TN: 3-acre property with 1680 sqft 2BD, 2BA cabin, 1BD, 1BA cottage, and potential for more builds. Near Smoky Mountains National Park. View Post

$1.125M | Naples, FL: Fully renovated 3BD, 2BA, 1905 sqft home on acreage. Vaulted ceilings, completed January 2024. Priced for quick sale. No HOA. View Post

$1.879M | Santa Rosa Beach, FL: 4BD, 3BA beach house with ocean views from the third-floor terrace. Profitable STR in Beach Haven community with heated pool. Fully furnished. View Post

$2.659M | Traverse City, MI: 7BD, 3.5BA custom-built home on 2.54 acres with 4711 sqft. 87 ft of lake frontage, heated saltwater pool, beach house, and 40x60 pole barn. View Post

TRENDING NEWS NUGGETS

🌍 Costa Rica's Bold Visa-Free Move Boosts Tourism to New Heights: Costa Rica now offers visa-free entry to citizens of 97 countries, including the U.S. and Canada. With its stunning landscapes and rich biodiversity, this move is set to drive tourism growth. For short-term rental investors, the surge in tourists means more demand and potential higher returns.

🛑 Americans Say No to Price Hikes, Cooling Inflation: With inflation nearing the Fed's 2% target, U.S. consumers are driving the change by rejecting higher prices. As spending patterns shift back to pre-pandemic norms, companies are forced to stabilize or even lower prices, signaling relief for short-term rental investors worried about rising costs.

📈 Home Insurance Surge Sparks Rent Hikes: 50% of single-family landlords cite home insurance as their biggest cost spike, with many planning to pass these expenses onto renters through rent increases. This trend could impact affordability and profitability in short-term rentals.

🏨 Airbnb's Popularity Slips as Travelers Return to Hotels: Airbnb is losing ground as travelers increasingly prefer the consistent quality of hotels, especially amid rising fees and underwhelming experiences. With demand stalling, the short-term rental giant is exploring hotel partnerships, a shift that could affect short-term rental investors' strategies.

💡 Live-In Flips to Build Equity and Avoid Taxes: Investors like Carl and Mindy Jensen are using a savvy strategy to build wealth and avoid capital gains taxes. By buying fixer-uppers, living in them for two years, and then selling, they leverage the IRS Section 121 Exclusion to maximize profits tax-free.

📉 Florida Condo Prices Plummet Amid Surging HOA Fees: Condo prices in Florida are crashing due to skyrocketing HOA fees driven by new safety laws and rising insurance costs. As sellers slash prices to attract buyers, short-term rental investors may find opportunities—but also risks—in this volatile market.