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First-time buyer here, no rentals before this. Doing my homework before I pull the trigger and would rather get yelled at by people who actually run STRs than figure this out the hard way.
Quick situation:
- Combined household W-2 income between spouse and I is ~600k
- Houston-based, can drive to anywhere on the TX or FL coast in a day, can fly to most of FL in 2-3 hrs
- Looking at $400-600K range for a 3BR
- High-W2 household, so the Year 1 tax benefit (cost seg + bonus depreciation) is part of the appeal — but I don't want to make a bad operational decision just to chase a deduction
- Planning to self-manage with a local cleaner / handyman, not a full PM
**Here's what's bothering me:**
Every deal I underwrite, even the conservative ones, comes out **cash-flow negative $500-1,500/mo** after debt service, opex, reserves, and realistic occupancy. I'm using AirDNA discounted 20-25%, full opex load (insurance has been the killer in FL), and 15-20% reserves.
Year 1 the tax benefit more than covers the bleed. But Year 2+, without bonus depreciation rolling, I'm just losing money every month for years until the loan amortizes down or rates drop.
**So my real question for the people doing this every day: how do you stop the bleed past Year 1?**
A few things I'm thinking about, want to hear what actually worked:
**Is anyone actually finding cash-flow-positive STRs in 2026 in FL or TX gulf?** Not on paper — actually positive after honest opex and current insurance? If so, where? I keep hearing people say Panhandle and Gulf Shores still pencil but my numbers don't agree.
**Did putting more down (30-40%) actually fix it for anyone?** Or did you find the extra equity could've been deployed better elsewhere?
**STR → MTR pivot.** Anyone here pivot a property from nightly to 30+ day mid-term (traveling nurses, insurance displacement, corporate)? Did the numbers actually improve, or did you just trade one problem for another?
**STR → LTR conversion as an exit.** If Year 2 cash flow is brutal, converting to a long-term rental seems like the cleanest stop-loss. Anyone done this? How did it compare to selling?
**Self-management at distance.** Realistic to run a property 800+ miles away with a cleaner and handyman team, no PM? What's the minimum hours/week I should plan for?
**Markets I'm considering, please tell me which are dumb:**
- **Orlando area (Davenport / Kissimmee / Reunion):** demand is there year-round but the market feels saturated and a lot of new product is coming online
- **Tampa Bay (Clearwater / St. Pete):** insurance post-Helene/Milton seems brutal, is it actually as bad as quotes suggest?
- **30A / Destin / PCB:** highest revenue per door but entry prices are scary
- **South FL (Fort Lauderdale, Naples):** prices and insurance hostile, Miami-Dade STR rules a minefield
- **Galveston / Port Aransas:** drivable for me, lower entry, but seasonality concerns
If you've operated in any of these in the last 18 months, I'd love to hear what your numbers actually look like — ADR, occupancy, what insurance is actually costing now, what surprised you.
Budget realistic, time bandwidth realistic (~100-150 hrs/yr between me and my spouse), no illusions about getting rich quick. Just trying to do this once and do it well.
Thanks in advance for any "don't do this" or "do this instead" wisdom.
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**Edit:** Yes I know about cost seg and the 7-day average rule, my CPA is on board. The tax piece I have a handle on — the operational sustainability is what I'm trying to figure out.