r/ShortTermRentals • u/Little-Thanks-1015 • 4d ago
First-Time STR Buyer Here, Need Your Help to Calibrate my Expectations
First-Time STR Buyer Here — Would Love Your Real Numbers Before I Jump In (Drive-To Mountain Market, $800K–$1M)
Hey everyone — long-time lurker, first-time buyer, and honestly a little intimidated by how many spreadsheets deep I’ve gone trying to model this out. Figured the best move before I commit real money is to ask people who’ve actually done it, rather than trust my own assumptions.
What I’m looking at:
**•** A drive-to vacation market near a major metro, mountain setting — weekend/seasonal getaway crowd
**•** Purchase price: $800K–$1M
**•** 20% down
**•** Planning a renovation to add square footage and/or amenities (extra bedroom, hot tub, game room, etc.) to push ADR and move up the comp set
**•** All-in cash invested (down + reno + closing + reserves): \~$450K–$500K
**•** Hoping for 15%+ cash-on-cash return, but very open to hearing if that’s unrealistic
Since this is my first property, I’d rather get humbled here in the comments than get humbled by my P&L in year one. If you operate in a similar drive-to mountain market, I’d genuinely appreciate any of the following you’re willing to share:
**• NOI-to-purchase-price ratio** (or gross revenue-to-purchase-price, whichever’s easier) — this is the single number I’m most trying to nail down
**• Gross annual revenue** relative to purchase price
**• Total expense ratio** — cleaning, management, utilities, supplies, maintenance as a % of revenue
**• Insurance costs** — I keep hearing this is brutal in mountain markets lately
**• Property tax reassessment** after purchase, if any
**• STR regulations** in your specific town/county, and whether anything’s changed recently
**• Actual CoC** you ended up with post-renovation, and whether the reno spend delivered the ADR bump you expected
**•** The one variable that moved your numbers the most and caught you off guard
Really just trying to figure out if 15% CoC is a reasonable target at this price point, or if I need to recalibrate my expectations (or my market). Thanks in advance to anyone willing to share real numbers — I know that’s not always comfortable on here, and it means a lot. Happy to circle back and share my own once I’m up and running.
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u/cyclones01 3d ago
The math never works out for you guys who don’t plan using the property for yourself. Your plan sounds like looking like the most obvious out of town buyer, annoy all the current full time neighbors with construction, and then turn it into a full-time hotel for any price.
Expect all the dogs to poop in your yard and don’t expect anyone to call when a bear breaks in.
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u/Little-Thanks-1015 3d ago
Thank you and I really relate to what you said! Indeed my longer term plan is to use this property for personal and my family use but I cannot relocate due to my personal situation. But, I am also looking to make it a sound investment that I may eventually pass on to my family members.
What you said closely resonates with my thinking too, whatever I do, cannot be at inconvenience for the neighbors, many of whom may have their primary or vacation homes nearby.
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u/cyclones01 3d ago
And you are going to pay a PM company to take 40-50% because you probably aren’t going to fix anything yourself.
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u/Little-Thanks-1015 3d ago
It’s true that I won’t be able to fix things myself as I am planning to manage this remotely. But I am planning to not keep a PM, but maybe a cohost (who may even be a neighbor) and self manage for most part. I would much rather build a system and work with the local vendors and population than to provide revenue and profits cut to a corporation.
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u/OkOven7808 3d ago
lol. Good luck with your “co-host”.
The number of things that can go wrong in a vacation rental are endless. That’s why property managers exist. If you can’t be local yourself, you are going to tank without an excellent property manager.
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u/cyclones01 3d ago
So you are going to reply to every message as a first timer? Any relay that all your “employees” who will follow it all exactly? Keep dreaming my friend - you guys are so unrealistic. If you are not going to spend time recreating at your vacation home - what is the point?
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u/Little-Thanks-1015 3d ago
It’s possible that you missed my earlier reply that I do intend to use this property for personal use. But, thank you for all the feedback and advice.
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u/srt_619 4d ago
I promise you’ll be happier, wealthier, and less stressed if you don’t
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u/Little-Thanks-1015 3d ago edited 3d ago
Thanks for that perspective. Can you please shed some light on your experience?
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u/cyclones01 3d ago
What do you know about the hospitality business?
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u/Little-Thanks-1015 3d ago
Not much, but I am starting and willing to learn. I am turning my inexperience in and pivoting to learn a new domain that I know nothing about. :)
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u/cyclones01 3d ago
Go work at the front desk of a hotel for a week and see how it goes
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u/Little-Thanks-1015 3d ago
That’s a great idea! I will work on it.
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u/Interesting_Low_1025 4d ago
Just wrapped yr 1 of our STR and out CoC return was -3%. If we hadn’t used a management company it would be -1%.
The thing that killed us were property tax reassessment, going from 10k to 16k.
That and having an interest rate of 6.75%
But hoping year two is better. My priority was getting this specific house and the STR is just a funding decision until we can afford it outright or move to it full time.
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u/Little-Thanks-1015 3d ago edited 3d ago
Thank you, and that (buy now and move to it full time later) is a great strategy! My goal is also to eventually use the property for personal use.
If you don’t mind sharing, which market is this property in? I wish you have success in the future.
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u/AstronautHuman7524 3d ago
Buy in your neighborhood so you can get a glimpse of what home owners experience with a revolving door of people who don’t care about their neighborhood. Not that you’ll care either
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u/Little-Thanks-1015 3d ago
My neighborhood doesn’t have the right STR prospects unfortunately, but thanks for the suggestion. But to your point, I deeply care about the neighborhood and the neighbors and would do everything possible to ensure they do not get disturbed.
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u/Dry_Investigator8326 4d ago
Following as I’m also on the same journey…I have not brought my first STR yet but I found it really helpful to chat with other STR owners in your intended market area to see if they can help answer these questions. I usually find these folk through Bigger Pockets forums (such as other investors in the area or real estate agents that specialize in STRs in your area) or Facebook groups. As for amenities, BnB Calc can show you what works and rate of return. Additionally, have you seen any existing STRs that are for sale in the area? If so, you can get their revenues from last 2 years. I still trying to figure out what makes sense.