Don’t Buy a Short-Term Rental Until You Read This
BY JONATHAN GREENE
So, you’re interested in buying a short-term rental in Upstate New York? Same.
Let’s get one thing clear from the start. Nothing is more critical to your future success with an STR in Upstate New York than having a handle on each town’s current regulations. They aren’t all the same. Actually, none of them are the same. They run the gamut from friendly to downright apoplectic, and every emotion in between. Buckle up.
There are moratoriums, caps, proposed legislation, and ChatGPT can’t keep up. Don’t rely on AI. Don’t rely solely on your agent. Don’t rely on your friends. Call the town (if you think Accord or Livingston Manor are “towns”, they’re not. Read THIS blog). And then call on a different day. Then, call one more time. You can’t get this wrong. Always verify with the source of the regulations before making an offer on a property.
With all that said, I’m here to make your life a little easier. I’ve been involved in short-term rentals my whole life. I understand how much it has progressed from seasonal time shares to epic hospitality destinations. To help you, I have compiled all my notes and chats into a guide. This guide. And I’ve broken it down into five categories:
Your Why: Personal Use vs. Income Scale
Your What: Size, Comfort, Scenery, Proximity
Your Where: Finding Your Geographic Pinpoint
Your Who: Designing Your Ideal Guest Avatar
Your When: The Budget/Availability Timeframe
Let’s dig in.
Your Why
Why do you want to buy a short-term rental property in Upstate New York? Please don’t say because you watched a TikTok video. Please, no. What is your why? Simon Sinek is asking, but so am I. What is your goal? In my experience, Upstate New York involves one of three options matching your why:
You want a weekend house that you can also rent out to break even at a minimum.
You want to operate a business in a great area to make as much money as you can.
You want an occasional week(end) house, but you also want to make money on it.
Which one is your why?
If you chose option one, will you be ok with strangers living in “your” house? This was a major hurdle for me. I don’t like people touching my stuff, so I had to reframe the experience so it wasn’t “my” stuff. It was a shared resource available to everyone, including me, while I was there. Can you do that? If yes, let’s get started.
If you chose option two, do you understand that you are taking on a full-time second job in the hospitality business? Read Unreasonable Hospitality by Will Guidara and decide if you are up for delivering that level of service to your guests. If so, let’s go.
If you chose option three, which side is the see-saw leaning toward? Will you mark your favorite dates on the calendar first (and lose big money), or will you just take the crumbs (there will be plenty, but think Wednesdays)? Either way, we can make this work.
Your What
Size matters, but not the way you think. The size of your short-term rental is directly proportional to the level of oversight required. Mo’ people, mo’ problems. That’s not to say that a couple's retreat can’t go South, but it’s less likely compared to a property that sleeps 12 and has a rock-climbing wall. You need to identify the level of management you can handle.
If you plan to use this property and rent it out, you want it to be comfortable for you (but not too comfortable). It’s a balancing act between what you like and what guests will like, but keep in mind that you are usually the best guest avatar to build your stay around.
Comfort is subjective, but you need to understand your property’s comfort zones because they will be part of your marketing package. Are you a wellness retreat, an adventure spot, a family gathering space, or a party pad? Whichever you choose, it has a comfort profile that leads to your amenities.
You don’t want video games at a wellness retreat. You don’t want tons of screens at an adventure spot. You don’t want all adult toys at a family gathering space. You don’t want all king beds at a party pad. Short-term rentals are about hospitality first and marketing and branding second.
Your vibe involves your scenery as well. If you want people to feel off the beaten path, you need nature and few neighbors. If you are a ski property, you want to be able to see the mountains. Upstate New York pickleball doesn’t look like Scottsdale pickleball - it blends in instead of standing out. What you look at from your short-term rental is very important and can’t be overlooked. What your neighbors keep outside, or how their house looks, could affect your reviews.
Proximity is part of your marketing and branding strategy, as well as your furnishings. If you are walkable to a town, you will need less to do inside because you want your guests to experience the town. It’s likely why they stay, so you lean into that. If you are remote, ensure your guests know how far away the grocery store and gas station are. The way you prepare your guests for your property is how you earn five-star reviews.
Your Where
Listen to me when I tell you this: you have to be a participant in your geographic choice. That sounds like a no-brainer, but many people ask where to buy. Where you are is a product of what you are looking for. Off-grid, near a town, near skiing, near restaurants, off the beaten path, this far from NYC (or somewhere else) - they all are part of what you want. I can help with data and personal insights, but you need to trust yourself to decide where to buy, based on your why and your what
I am a fan of Saugerties. I like the town. I want to go to Josie’s Coffee Shoppe every time I am there. I want to live at Opus 40. I want to visit the Saugerties Lighthouse. I like how close it is to Woodstock and Kingston. But that’s me. I know what I like. I like that you can be near town or in the woods in Saugerties, but you can have that in so many other towns as well. But I want to use my short-term rental, so I am not chasing the income scale.
One of the most important considerations when deciding where to buy is the short-term rental regulations and pending referenda. This is another blog down the line, but it could turn the short-term rental of your dreams into a hard no in an instant. You have to be sure you can do what you want to do before you do (buy) it.
Woodstock is a no. Most of Kingston is a no. Windham and Hunter are yeses. Most of Sullivan County is a yes. Many towns are tentatively okay, but pending legislation indicates they aren’t supportive of short-term rentals. You must keep on top of this and work with an agent who understands the dynamics and how to get the information.
Do you want to be on the water? Do you want a view of the mountains? How much acreage do you want, and how much will you settle for? This is all a part of your where. Jewett and East Jewett often have views, but don’t really have a town to call their own. To determine where you want to buy, you have to drive through these towns and hamlets and get to know them. You can’t rely on other people to pick for you.
Your Who
If you are new to short-term rentals, there is a hack for designing your ideal guest avatar. Go into your living room. Find a mirror. Look into it. That’s your first avatar. Most first-time short-term rental investors plan to use their property, so they are literally their own avatar. The reason you want to visit this property is the same reason others like you will want to visit it. Start with yourself.
Your who is more than that, though. Your who can be couples, families, bachelorette parties, skiers, off-grid enthusiasts, and more, but your property has to be designed with your specific avatar in mind. Design, marketing, and branding are all directed at your intended guests. Your intended guests are not the same as just anyone who will book. That’s basic and won’t get you a high ADR (Average Daily Rate).
The best way to design your ideal guest avatar is to be highly granular. Give them names, professions, and write down where they came from to get to your property. That’s how you build an experience specifically for them. When you are built for everyone, you attract anyone. When you are built for specificity, you play Field of Dreams. If you build it, they will come.
Your When
Your timeframe is directly tied to your budget and the availability of properties that meet your requirements. In the short-term rental game, there shouldn’t be a ton of properties on the market that work for you. If there were, they wouldn’t be special. You want to build a small buy box and nurture it until you find the right one at the best time.
The best time starts with having your finances in order, being pre-approved if you aren’t paying cash, understanding which type of loan you will use for the property, and finalizing how much you can spend to achieve the projected return you want. You can’t rush your when. When you rush, you end up with an asset that you tolerate. I want you to love your investment property or else, why buy it?
Just because it’s an investment property doesn’t mean it’s all about cash flow. Most investors who chase cash flow don’t like the highest-cash-flow assets even when they own them, because they often require the most maintenance. More guests, more wear and tear, more repairs. Higher price, higher expectations of the guest. When you understand what you are up for as a short-term rental proprietor, micro-landlord, and hospitality business owner, the timeframe becomes fluid.
Don’t reach for a property type that you have never managed before. Don’t rush to buy into a second job. Prepare yourself, both financially and mentally, for the journey ahead, and you will be well-positioned when the right property becomes available. You want to have everything in order so you can bid to win when it does.
What’s Next
Reflect on what you just read. Let it sink in. It’s neither as easy as people say, nor as hard to buy your first short-term rental in Upstate New York. It takes finding an expert to help you, one who always keeps your best interests at the forefront, and who understands all of the minutiae of short-term rentals in the region. But it also takes you.
The why, what, where, who, and when are parts of you. They are how you will build a foundation of success, and what real estate investors call a buy box. Don’t worry, your buy box is editable. As you make trips to the area, you may adjust your top three areas. You may decide a certain driving distance is too much. You may adjust your expectations once you see the properties in person.
And remember that last bit about properties in person. Almost all properties look good online. The real work comes when you see the neighborhood, the lot, the house, the exterior, the interior, the basement, and the mechanicals in person. Good luck.
Jonathan Greene is an Associate Broker with Country House Realty’s Kingston office. He also hosts the popular podcast Zen and the Art of Real Estate Investing.