3 Cash Flowing St. George Area Vacation/Airbnb Rentals

While the real estate market has and always will be unpredictable, one key indicator of a good real estate investment is “cash flow.”

Cash flow means that the total amount of income generated exceeds the outgoing expenses. Anybody having run a family budget knows that being cash positive at the end of the month is a very important thing.

Recently, many investors have flocked to the Airbnb investment, especially because owners can use the property when they want to and use the property's short term rental ability to pay the bills when they aren’t using it.

In recent years and due in part to Washington County’s tightened regulations, properties with permission to run as “Airbnb” have been throttled, which has skyrocketed the value of existing or the few permitted short term rental properties.

Because county regulations have restricted when, where and how many of these properties will be granted permission to operate, it has affected both the price of purchasing one and the price it costs to stay in one.

It’s not uncommon to see townhouses with comparable values of $400-500k around town going for over $700,000 because it has short term rental permits. At the same time, a short Airbnb search of St. George shows an average weekend stay in town will cost visitors at least $200 a night.

So, do these short term rentals still cash flow at the inflated prices? Are they good investments?

Presently it seems that short term rental demand sustains the steep prices seen in the sales market and from a cash flow perspective, yes, the numbers work.

Here are 3 examples of properties on the market right now that sustain themselves from a cash flow perspective:

#1. 498 N Ventura #41, Washington, Ut.

Asking price: $695,000
3 Bed, 2.5 bath, 1866 Sq. Ft

This Washington townhouse is located in the Vida Sol community and has pool and hot tub access. Seller reports $54,000 in documented income from the 2021 fiscal year. The numbers add up to what should be a solid investment with good opportunity for positive cash flow and future appreciation.

Projected mortgage with a 20% down payment: $3500/month Reported income: $54,000 annual, $4500/monthly

Expected management fees (10%): $5400 annual/450 monthly HOA: $198 monthly Cleaning fees paid by vacation guests. Average occupancy projected at 78% Projected annual cash flow: +4200 Projected appreciation after 1 year (national cumulative avg. of 4.5% return per year): +$31,000

Listing, more pictures and details: https://www.utahrealestate.com/1847438?st_id=181222489&actor=4019269

#2. 3234 S 4900 W, Hurricane, Ut.

Asking price: $725,000
4 Bed, 4 bath, 2379 Sq. Ft

This single family home in Hurricane with short term rental permit is turn key rental ready and sleeps 12, which should provide even more generous cash flow numbers.

Projected mortgage with a 20% downpayment: $3650/month Projected income: $60,000 annual, $5000/monthly Expected management fees (10%): $6000 annual/$500 monthly HOA: $210 monthly Cleaning fees paid by vacation guests. Average occupancy projected at 78% Projected annual cash flow: +7680 Projected appreciation (national cumulative average of 4.5%) : +$34,700

Listing, more pictures and details: https://www.utahrealestate.com/1815444?st_id=181222489&actor=4019269

#2. 504 E Bailey Lane, Washington, Ut.

Asking price: $725,000
4 Bed, 4 bath, 2165 Sq. Ft

Located near Sand Hollow and the airport, this townhome sleeps 10 and comes with foosball, pickleball and pool access. Turn key rental ready.

Projected mortgage with a 20% downpayment: $3650/month. Projected income: $60,000 annual, $5000/monthly Expected management fees (10%): $6000 annual/$500 monthly HOA: $210 monthly Cleaning fees paid by vacation guests. Average occupancy projected at 78% Projected annual cash flow: +7680 Projected appreciation (national cumulative average of 4.5%) : +$34,700

Listing, more pictures and details: https://www.utahrealestate.com/1834866?st_id=181222489&actor=4019269