Have you been on the fence about investing in Sedona with short-term routes? The following are average cash flow numbers for my clients (Not for buyers outside of my sphere, as local returns outside of my sphere are 5% lower).
My clients that purchased approximately one year ago and did not make property improvements earned a 12% cash flow and 18% cash on cash. With improvements, cash flow was 18% and cash on cash was 25%. Appreciation over the last year was approximately 30% on these short-term rental purchases.
For clients that purchased two years ago, they earned the following biennial returns (over the last 2 years): Without improvements, 27% cash flow, and 40% cash on cash. With improvements, 40%+ cash flow and 70%-90% cash on cash. Appreciation over the last 2 years was approximately 57% on these short-term rental purchases.
For clients that purchased three years ago, they earned the following triennial returns (over the last 3 years): Without improvements, 50%+ cash flow, and 60%+ cash on cash. With improvements, 65%+ cash flow and 90% cash on cash. Appreciation over the last 3 years was approximately 87% on these short-term rental purchases.
Most of these clients that purchase three years ago will have more than doubled their home value, within 6 months of this blog, as well as yielded more than a hundred percent cash on cash.
We’re seeing aggressive buyer activity that is pushing up the property values. And this year forecasts are really favorable for buyers on the short-term rental front. So we’re looking at an appreciation of at least 30% in 2022- even when you take into account raised interest rates.
Occupancy forecasts are also extremely favorable to STR buyers. Demand for rentals is looking very strong this year in the Sedona area. Tourism is the local industry, and we’re seeing more visitors coming to the area. They need a place to stay and they don’t want to stay in hotels anymore.
Tenants/Visitors trust short-term rentals more than ever, thanks to STR management companies’ efforts over the last several years. The demand is increasing- It’s going up, and the local market is not saturated.
For anything further, schedule a call, or reach out to me directly. Let me know what I can do for you. Whether you’re buying or selling I look forward to connecting with you.