Please help me understand why STR is considered evil by locals?
Giani BrussichPro Member
New to Real Estate · Bedford, NY · Member since 2018 · 22 posts · 10 votesPlease help me understand why STR is considered evil by locals?
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Ryan MoyerBusiness Member
Property Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votesAll of my rentals are STRs so I have no reason to dump on them, but I don't really understand why you touched on and seemed to understand many of the issues people have with them, and then just shrugged them off.
I am active in my local community which is a moderate but growing STR market and in the communities of one of my STR locations which is a ruralish area where STRs have become popular (near National Parks). Trust me when I say the vitriol the locals have for STR is not just made up. They HATE it. That's not just a story. It's very real.
It differs by community, but for instance in the rural town near National Parks the main reason is the lack of affordable housing/rents. That's a big reason here locally as well (ski destination). It just doesn't make sense for anyone to use their place as LTR at traditional LTR rates when they can make literally 5x as much operating as an STR even if they pay a property manager. There's nowhere for the restaurant workers, retail cashiers, etc to live.
In the rural town there are literally ZERO places available to rent as LTRs with occupancy. The local FB groups people will post that they're looking for a place to rent and the response is just 100 people replying that everything in town is an STR now because of greedy owners, etc. The hate is real.
The free market just doesn't have any answer for it. Logically we should think that there is a dearth of affordable long term rental housing then someone will step in and fill that void to make that money. But the problem is there is no scenario where the money spent on that will bring in more profit than spending the same many on an STR in these vacation destinations. You could build some giant apartment complex with $700/mo 1br apartments and they'd be booked up to capacity on day 1 so that sounds great. But that place costs $10M to build and for $10M you could build some insanely awesome short term rentals that would make 5x as much.
That's not even to mention that the loan terms are going to be massively better on the STRs since you can buy them without an investment loan.
Granted all of this is less of an issue in urban centers like NYC where there is still plenty of long term housing, but in these vacation destinations the only reason for a LTR to even exist is if the owner is lazy, the owner hates money, or regulation deems that's the only type of rental they can have there. Otherwise why would anyone just except 1/5th of the returns for an asset class that isn't really any safer, and can always be used as a fall-back in a worst case scenario?
This is all why I've always said that as STR becomes an accepted asset class (as it is very well on its way to being) regulation is going to massively rise. That's why the best and the brightest on this forum have always said from the beginning to focus on areas where STRs are ALREADY a regulated part of the economy, because this is something that every town in the world is going to have to deal with eventually.
Cosmic Vacations4.9174 Reviews
63 Replies
- Realtor · PInellas County Largo, FL · Member since 2016 · 902 posts · 810 votes4y
Nope, you've got the gist of it. Direct neighbors will often complain about the STR next door if the owner keeps booking parties. Honestly, even one loud party can leave a bad taste in people's mouths.
You will often hear people say that investors are coming in and driving prices up. Which is odd because it's usually the investors that have a driving need to keep purchase prices as low as possible. It's the people that treat mortgages as free money that muddy the waters and bid up houses hoping that an appraisal will bring the price down. Not so much in the past 2 years, but that's a big strategy when it can work. And there are still Realtors that think that's going to work so they tell the buyers to do that. So the investors now have to outbid the owner occupants that didn't really intend to pay what they bid.
It's mostly just a case of NIMBY from people that will stay in a vacation rental home when they travel. They don't think it's the same thing in their backyard as when they stay in a cabin in the mountains. I point that out to the people that I talk to. There are a lot of people in Clearwater/Pinellas that go up to the mountains in the summer then complain about all the visitors here on the beaches when they come back home!
- Real Estate Investor · Saint Paul, MN · Member since 2017 · 543 posts · 474 votes4y
@Giani Brussich Would you want different people coming and going in the house next to yours every week? Many who are just fine but also the occasional partier, parking multiple cars in the street in front of your house and staying up late creating noise? People have no connection or interest in the neighborhood but are just there for a brief stay? Maybe you would but I sure wouldn’t. I own a number of vacation rentals in several markets, so I am not against short term rentals at all. But I am against them in residential neighborhoods where owners make their permanent home and raise their families. Areas with exceptionally large lots might be the exception, but otherwise there is a time and place for everything.
- 4yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
My neighbors complained about a STR.
They had small kids and felt unsafe with random people coming and going. They said the renters could be convicted child molesters or worse.
People would be hooting and hollering at 2AM when their Uber dropped them off.
Our HOA forbids commercial business and a STR is required to get commercial insurance for a reason.
They generally felt unsafe and got a security system.
- Realtor · Baltimore, MD · Member since 2020 · 255 posts · 182 votes4y
Depends on the market, but in a lot of high cost markets the airbnb investors are overbidding massively on homes because their margins can take it.This drives up home prices. An increase in home prices eventually drives more locals out (either out of the state or onto the street), but youre right -- STR is only a piece of this. There are many other factors causing these waves, STR is just easy to blame. Plus --on the edited, filtered pages of social media - STR investors are making a killing right now, which tends to frustrate people who are not.
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Giani Brussich:
Recently, I have seen a lot of threads/posts come up on social media (I know, not very reliable or the truth)You do realize that social media (particulary FB) is dominated by (deleted) and idiots?
They have zero knowledge of the reality of the situation.....
- 4yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes
All of my rentals are STRs so I have no reason to dump on them, but I don't really understand why you touched on and seemed to understand many of the issues people have with them, and then just shrugged them off.
I am active in my local community which is a moderate but growing STR market and in the communities of one of my STR locations which is a ruralish area where STRs have become popular (near National Parks). Trust me when I say the vitriol the locals have for STR is not just made up. They HATE it. That's not just a story. It's very real.
It differs by community, but for instance in the rural town near National Parks the main reason is the lack of affordable housing/rents. That's a big reason here locally as well (ski destination). It just doesn't make sense for anyone to use their place as LTR at traditional LTR rates when they can make literally 5x as much operating as an STR even if they pay a property manager. There's nowhere for the restaurant workers, retail cashiers, etc to live.
In the rural town there are literally ZERO places available to rent as LTRs with occupancy. The local FB groups people will post that they're looking for a place to rent and the response is just 100 people replying that everything in town is an STR now because of greedy owners, etc. The hate is real.
The free market just doesn't have any answer for it. Logically we should think that there is a dearth of affordable long term rental housing then someone will step in and fill that void to make that money. But the problem is there is no scenario where the money spent on that will bring in more profit than spending the same many on an STR in these vacation destinations. You could build some giant apartment complex with $700/mo 1br apartments and they'd be booked up to capacity on day 1 so that sounds great. But that place costs $10M to build and for $10M you could build some insanely awesome short term rentals that would make 5x as much.
That's not even to mention that the loan terms are going to be massively better on the STRs since you can buy them without an investment loan.
Granted all of this is less of an issue in urban centers like NYC where there is still plenty of long term housing, but in these vacation destinations the only reason for a LTR to even exist is if the owner is lazy, the owner hates money, or regulation deems that's the only type of rental they can have there. Otherwise why would anyone just except 1/5th of the returns for an asset class that isn't really any safer, and can always be used as a fall-back in a worst case scenario?
This is all why I've always said that as STR becomes an accepted asset class (as it is very well on its way to being) regulation is going to massively rise. That's why the best and the brightest on this forum have always said from the beginning to focus on areas where STRs are ALREADY a regulated part of the economy, because this is something that every town in the world is going to have to deal with eventually.
Cosmic Vacations4.9174 Reviews - 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
@Ryan Moyer Let the market figure this out. It always does. And these low income service workers don't get to live in the cool desirable markets that attract tourists, they get to live outside of town, just like they always have. That is, until they can make enough money to afford the hot places....
- Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes4y
@Giani Brussich I think driving up housing prices are a big drawback especially in non-vacation destination markets. In my market a house could be worth 500k I could offer 650k as a STR and still make way more than a 500k LTR. It ends up pricing ordinary people out of the market. I believe that in the next 10 years the majority of cities and suburbs will have STR regulations in place. (I own 1 STR in the Smokies and 1 in Austin that I'll convert to STR when I move out)
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes4yMy STR tenants generally don't like their neighbors. The neighbors use drugs and listen to loud music. My tenants just want a place to cook food, do laundry and sleep.
- 4yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
There is always going to be a group that is mad about something. For short term rentals, they remove housing from the local rental pool and as others said, you have different people in and out every week and they can cause problems.
- Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes4y
Quote from @Giani Brussich:
If this is the wrong place for this, please remove it.
Recently, I have seen a lot of threads/posts come up on social media (I know, not very reliable or the truth) about how bad/hated STR is for local neighborhoods. With reasons such as taking away housing supply, greed, lack of interest in the local politics, taking away long term rentals, increasing overall home prices, rowdy guests, regular turnover, taking away opportunities/money from locals etc… What was most surprising is how many people agreed. In my opinion, It doesn't make sense. The arguments seem to be half thought out and I don't understand how most of the complaints are solely due to STR or even applicable except with some like high traffic/turnover or rowdy guests. I always try to be empathetic and understand the other points of views but still.
Am I missing something? Please help me understand if I am. Thank you
I recently bought a property and every time I was out a neighbor would come over to greet me and asked that I would not make it into an Airbnb. I thought that was kind of odd. They said that someone bought the house next to the one I just purchased and made it into an Airbnb. They said it was bothering the neighborhood and it was very rowdy. My wife and I lived there for a few months and we didn’t notice anything. I think it is just preference.
- 4yRyan MoyerBusiness MemberProperty Manager · Orlando Kissimmee Davenport Salt Lake City, Park City · Member since 2019 · 991 posts · 1k+ votes
Quote from @Bruce Woodruff:
@Ryan Moyer Let the market figure this out. It always does. And these low income service workers don't get to live in the cool desirable markets that attract tourists, they get to live outside of town, just like they always have. That is, until they can make enough money to afford the hot places....
But the market doesn't always figure it out. That's why we have zoning laws. Because you don't want Zeeco Metals to buy out the 5 houses next door, bulldoze them, and build their new steel plant right next to you.
But that's essentially what we're doing. We're operating commercial businesses in residential neighborhoods with residential regulations and residential loan products because legislators have been slow to adjust to the fact that Airbnb isn't just people letting someone crash on their couch anymore. All of that will change with time. 30 years from now we'll be operating our commercial businesses (which is 100% what most of us are operating) in commercially zoned areas with commercial regulation and commercial loan products. The best thing we can do is enjoy the ride while it lasts, and make sure we don't put ourselves in a bad position in front of those changes.
We are essentially operating hotels. It's a loophole that we can do that in a residential neighborhood next door to a family with a small child that had no intent of living next door to a hotel when they bought in a residentially zoned neighborhood. That loophole won't last forever.
Cosmic Vacations4.9174 Reviews - Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes4y
@Ryan Moyer you made great points, though the biggest problem is the towns won’t let them build that big apartment complex either. Zoning laws and opposition every step of the way. People only want affordability on their terms.
- Investor · Greenville, SC · Member since 2012 · 269 posts · 187 votes4y
I mean, I don't love STRs in my neighborhood. I live right across the street from one, and it kinda eliminates part of the point of living in a neighborhood in my opinion. Everyone else in my cul-de-sac has been there for decades and we are all good friends. The STR, meanwhile, isn't adding anything to the neighborhood.
Am I saying that STRs are evil because I don't like one that is next door to me? Not at all. STRs have their place, but I don't think that place is residential neighborhoods. I guess that's what zoning is for, though.
- Helen, GA · Member since 2015 · 96 posts · 68 votes4y
The Anti-STR wave goes along with anything anti-investor/anyone who is successful. Nothing new.
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votesThe market includes the citizens/public who demand and get zoning laws form their Govt. A City Council doesn't always just decide one day to make a certain neighborhood R1 vs R4, it is subject to change based on the public demand.
Quote from @Ryan Moyer:
But that's essentially what we're doing. We're operating commercial businesses in residential neighborhoods with residential regulations and residential loan products because legislators have been slow to adjust to the fact that Airbnb isn't just people letting someone crash on their couch anymore. All of that will change with time. 30 years from now we'll be operating our commercial businesses (which is 100% what most of us are operating) in commercially zoned areas with commercial regulation and commercial loan products. The best thing we can do is enjoy the ride while it lasts, and make sure we don't put ourselves in a bad position in front of those changes.
We are essentially operating hotels. It's a loophole that we can do that in a residential neighborhood next door to a family with a small child that had no intent of living next door to a hotel when they bought in a residentially zoned neighborhood. That loophole won't last forever.
And we are not operating hotels. I defy you to show me a STR that looks or operates like a hotel...other than the fact that we charge a fee to stay there. Most STRs bring a neighborhood up, not down....
I operate one STR in a neighborhood that finds them to be an asset. It was an older neighborhood that is in a 'Gentrifying' process. When I bought the run down property, I had several neighbors walk over and ask what I was going to do with the place. When I replied vacation rental, they were overjoyed because they had seen what had happened with other houses in the area that had been converted to STRs. Cute, quaint and uber-clean homes replaced the old run down wrecks. The neighborhood is better, the City is better because of increased revenue, tourists win because they have a really nice place to stay that has character and a kitchen.
I don't see this changing anytime soon if ever.... - 4yKenneth RolfePro MemberBoise, ID · Member since 2018 · 57 posts · 39 votes
I can see both sides on this discussion. There are valid concerns out there that can and likely will be addressed, but I don’t think it is as extremely detrimental as it is often made out to be. @Bruce Woodruff my experience in launching our first STR a couple weeks ago was the same with the neighbors. I was worried how they would respond, but they were actually happy we would be setting it up as a vacation rental with the point they made being that they knew it would be well kept on a regular basis. And I agree there is a major difference between an STR and a hotel, which is actually why a lot of people choose them over the hotel. They're looking for a nice place to stay that feels more like home.
I think the issue is when you get those few bad eggs. But just like not every landlord is a slumlord… not every STR is the problem some people expect it to be. - New to Real Estate · Bedford, NY · Member since 2018 · 22 posts · 10 votes4y
Quote from @Dan Maciejewski:
Nope, you've got the gist of it. Direct neighbors will often complain about the STR next door if the owner keeps booking parties. Honestly, even one loud party can leave a bad taste in people's mouths.
You will often hear people say that investors are coming in and driving prices up. Which is odd because it's usually the investors that have a driving need to keep purchase prices as low as possible. It's the people that treat mortgages as free money that muddy the waters and bid up houses hoping that an appraisal will bring the price down. Not so much in the past 2 years, but that's a big strategy when it can work. And there are still Realtors that think that's going to work so they tell the buyers to do that. So the investors now have to outbid the owner occupants that didn't really intend to pay what they bid.
It's mostly just a case of NIMBY from people that will stay in a vacation rental home when they travel. They don't think it's the same thing in their backyard as when they stay in a cabin in the mountains. I point that out to the people that I talk to. There are a lot of people in Clearwater/Pinellas that go up to the mountains in the summer then complain about all the visitors here on the beaches when they come back home!
Thank you for your reply. The parties and bothersome guests I understand being upset about as well as it is mostly likely from STRs. However, majority blame on STR investors for difficult economic real estate environments is what i don't get. I find it odd but I guess it is one those things were one bad experience is enough to generalize for the whole industry.
- New to Real Estate · Bedford, NY · Member since 2018 · 22 posts · 10 votes4yI agree about not wanting them in mainly residential areas. I was mainly referring to mass blame for overall economic situations in real estate. In any case, thank you for your response and I agree with your points.
Quote from @Mark S.:
@Giani Brussich Would you want different people coming and going in the house next to yours every week? Many who are just fine but also the occasional partier, parking multiple cars in the street in front of your house and staying up late creating noise? People have no connection or interest in the neighborhood but are just there for a brief stay? Maybe you would but I sure wouldn’t. I own a number of vacation rentals in several markets, so I am not against short term rentals at all. But I am against them in residential neighborhoods where owners make their permanent home and raise their families. Areas with exceptionally large lots might be the exception, but otherwise there is a time and place for everything.
- New to Real Estate · Bedford, NY · Member since 2018 · 22 posts · 10 votes4yThank you to everyone who commented! This is exactly what I was looking for and many great points by all of you! I appreciate everyone's comments and this has definitely broadened my outlook towards STR.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes4y
Yes, most of the complaints are coming from people with no first-hand experience or knowledge.
The biggest complaints are noise and safety. I certainly agree with the noise because people on vacation are more likely to party, stay up late, and care less about the neighbors. Safety is probably no more a problem than with your neighbor that lives next to you for 20 years.
The DIY Landlord Book4.7248 Reviews - 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Kenneth Rolfe:
I think the issue is when you get those few bad eggs. But just like not every landlord is a slumlord… not every STR is the problem some people expect it to be.
This says it well. I'd bet that nationwide, maybe less than 5% of all STRs have any issues (just a wild guess) - Member since 2019 · 7k+ posts · 4k+ votes4y
my Airbnb tenant is smoking marijuana in front of my house and then bringing girls to her rooms hahaha :) not just I got trouble from the neighbor but also another tenant, HOA and my wife.
I fully respect the city's decision to qualify some zoned property only as STR-allowed, otherwise, it could be chaos really....also that city decision actually will rise the price of the neighborhood. - 4yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Ryan Moyer:
Quote from @Bruce Woodruff:
@Ryan Moyer Let the market figure this out. It always does. And these low income service workers don't get to live in the cool desirable markets that attract tourists, they get to live outside of town, just like they always have. That is, until they can make enough money to afford the hot places....
But the market doesn't always figure it out. That's why we have zoning laws. Because you don't want Zeeco Metals to buy out the 5 houses next door, bulldoze them, and build their new steel plant right next to you.
But that's essentially what we're doing. We're operating commercial businesses in residential neighborhoods with residential regulations and residential loan products because legislators have been slow to adjust to the fact that Airbnb isn't just people letting someone crash on their couch anymore. All of that will change with time. 30 years from now we'll be operating our commercial businesses (which is 100% what most of us are operating) in commercially zoned areas with commercial regulation and commercial loan products. The best thing we can do is enjoy the ride while it lasts, and make sure we don't put ourselves in a bad position in front of those changes.
We are essentially operating hotels. It's a loophole that we can do that in a residential neighborhood next door to a family with a small child that had no intent of living next door to a hotel when they bought in a residentially zoned neighborhood. That loophole won't last forever.
how are you getting a residential loan on a STR ? calling it a second home then renting it out.. or calling it owner occ but really renting it out? second home and investment loan pricing is almost equal right now I was looking at it today. - Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes4y
Quote from @Giani Brussich:
If this is the wrong place for this, please remove it.
Recently, I have seen a lot of threads/posts come up on social media (I know, not very reliable or the truth) about how bad/hated STR is for local neighborhoods. With reasons such as taking away housing supply, greed, lack of interest in the local politics, taking away long term rentals, increasing overall home prices, rowdy guests, regular turnover, taking away opportunities/money from locals etc… What was most surprising is how many people agreed. In my opinion, It doesn't make sense. The arguments seem to be half thought out and I don't understand how most of the complaints are solely due to STR or even applicable except with some like high traffic/turnover or rowdy guests. I always try to be empathetic and understand the other points of views but still.
Am I missing something? Please help me understand if I am. Thank you
Just curious, in a respectful and sincere way ;-)
I always think of STRs as being in destination locations like Pigeon Forge, 30a in FL, Myrtle Beach and so on.
What drives traffic in locations like Greer SC, St Paul MN, Baltimore, etc? I understand the draw for "The worst town to live in, KS" is all the hootin' & hoolerin' and bullets shot into the refrigerator, the mud, the blood & the beer but what about other less lively places?
What drives traffic in small friendly less exciting towns and big tough towns like Baltimore?
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