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.
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63 Replies
- Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 654 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
This is probably gonna be a unpopular opinion but I’ve been doing this for a while and pre pandemic the real estate market functioned pretty normally there was enough houses for regular people, enough for landlords, enough for most renters (at least middle class) , enough for flippers etc. Since 2020 fueled by yes a real housing shortage, but als low interest rates and rampant speculators, investors priced out most normal people with a level of overpayment and risk that happens in a bubble (it’s not clear to me all these Airbnb’s were necessary good investments.) When a 27 year old has 10 properties at inflated priced and normal people are priced out people get mad. I actually hope some of these rate hikes slow the speculation, I think it will a healthy thing for home buyers, society and even investors with a normal level of risk tolerance.
- Lender · CO CA TX WA ID OR · Member since 2020 · 419 posts · 542 votes4y
@Giani Brussich first want to tell you that I'm a Short Term Rental (STR) host and have a decent property that I rent out in the Phoenix area.
Here's the thing - STR owners are a disorganized and greedy bunch that capitalized on the opportunity to make substantial returns with full disregard of the neighborhood and the peace.
With that being their only goal, communities suffered as a result. Golf bros screaming in the middle of the night, hosts accepting shady characters, and bachelorette parties… oh, those bachelorette parties.
Because of the abuse, neighbors fought back - and they are exceptionally organized, especially the older folks, and have a mission to make “homes, not hotels.”
With these highly organized groups of neighbors that petition to their local governments, STR owners have earned a bad name.
Of course not all of us are abusing the system, but the offenders among us have ruined the opportunity (in some markets) because of their greed and disregard for the community.
Again, I'm a STR owner and I love the income. It will be a shame when it ends
- Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes4y
@Giani Brussich - I’ve owned my first house (which is now a long term rental) for the past 13 years. I can tell you every story about what’s gone on in my block in the past 13 years from the time the neighbor’s roommate was selling drugs, to the time the thief was caught breaking into cars to steal GPS, to which old folks died and their homes were bought by investors and flipped (usually to young families).
It doesn’t take a lot of crazy parties or bizarre events to really disturb the neighborhood psyche. One of the main benefits of having neighbors or even annual renters is that everyone tends to follow a routine such as parking in “their spots” on the street when there is limited (unassigned) parking.
I had a complaint against my rental after one of my tenants went crazy against someone else in the house and the police, ambulance etc were called. This is why we try to screen for nice people, so we can maintain a nice neighborhood.
If I Airbnbed my whole house, it would probably be 30-50% vacant but then anytime I did rent it, it would probably have 2-4 surplus cars that don’t really fit on the little residential street without messing up other people’s “standard” parking. They’d probably make a lot of noise at night between arriving and going at all hours. Shrugs. I’m all for people being able to do what they want with their property, and I certainly like the returns I get on my Airbnb, but I don’t like if anyone is incentivized to mess up my quiet enjoyment of my personal home. And yes, most Airbnb stays won’t mess the neighbors up, but it only takes a couple strongly negative experiences for someone to have a strongly negative gut reaction. How many times does a restaurant have to screw up before you’ll vehemently avoid it and tell other people your bad experience? Once? Twice? It’s the same.
- Member since 2018 · 9 posts · 5 votes4y
On a separate note, my wife and I own LTR's in AZ and we are considering renting one to a ABNB operator. Does anyone have experience renting a SF to an operator, ie- what insurances are adequate, what special provisions would you recommend be in the lease ? We are concerned about the rental taxes and who owes them if the operator decides not to pay the city or state. We were told by the state that any sales tax liens would be levied against the home not the operator who would be an LLC (doesn't make sence to me). Any input or opinions or experiences would be appreciated .
- Lender · Asheville NC · Member since 2016 · 469 posts · 317 votes4y
Good luck changing the majority view's mind! :) And I don't disagree with all of their points. Really, I believe the best antidote to this is vacation markets instead of metro markets. Save your energy for scaling your business.
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Sounds like a lot of STR owners are trying to cram a lot of people into their places, the old 'heads-in-beds' concept. That's just greed at it's finest..... and don't allow less than 2-3 day stays, no last minute check-ins, etc, you're literally begging for a party.
Too bad a few greedy, not very smart owners have to ruin it for everyone....human nature I suppose.....
- Queen Creek, AZ · Member since 2014 · 2k+ posts · 1k+ votes4y
@Giani Brussich I live in phoenix and this came up at our last HOA meeting. Someone mentioned that a house near them was being used as a VR and every few days you had carloads of people rolling in with excited kids running around the yard screaming and cannon balling into the pool, or loud parties. Every week, week after week.
It's one thing when your neighbor puts in a pool and they are enjoying the pool on the weekend or their kids have a birthday or graduation party but when its people you don't know and its every week it gets old fast.
- PA · Member since 2010 · 339 posts · 168 votes4yhttps://www.dailymail.co.uk/vi...
Quote from @Account Closed:
Here’s one reason
https://www.washingtonpost.com... - Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes4y
The bottom line is that when you buy a house as your primary, you set out criteria and try to find the best house based on that criteria - price, number of bedrooms/bathrooms, house style, etc. For most people, location is a key part of that criteria - 50%? 75%? Who knows - but it's a primary concern. If you buy a home in the middle of a downtown, you go in (or should go in) with the expectation that you're going to hear the typical noises of a city - traffic, police sirens - and that you're going to enjoy some of the perks (walkable neighborhoods) and suffer some of the aggravation (parking a mile from your house, dealing with panhandlers). If you buy a home in a quiet suburban zoned neighborhood, you are expecting to live with some of the aggravation - having to drive everywhere, lack of some urban services - and expecting to enjoy the perks - stable neighborhoods, general peace and quiet, neighbors abstaining from burning tires or slaughtering animals, etc. Now your neighbor suddenly turns his/her home into a short-term rental because there's no specific zoning law that prohibited it since it wasn't "a thing" before 10-15 years ago, and most zoning laws are a century old or so, and you are expected to live with the aggravation while your former neighbor profits.
It's changing the rules mid-game by exploiting a loophole, and it's the reason so many people are up in arms about it (forget about the property cost rising). They didn't sign up to live in a commercial district but they're having to put up with a lot of the aggravation that comes with a commercial district. I'm not anti STR at all, it just needs to be done in a reasonable fashion that takes into account other considerations besides the property owner's profit. Certain areas of the country *need* STRs - vacation areas and rural areas without good options for hotels are just two examples - but like everything else it doesn't have to be an either/or proposition. Create permissible zoning with the input of the people that live in those areas, and have it above board so if you're buying into a community you already know what you're getting into.
Skyline Properties - Realtor · Gatlinburg, TN · Member since 2018 · 261 posts · 155 votes4y
key words in your post... "local neighborhoods"
I work exclusively with STRs.
If it's a vacation market, people usually like them b/c everything around the STR is probably an STR as well, and all the rules/regulations are grandfathered in from many decades of STR use.
Conversely, if you buy a home in an owner occupied neighborhood and your guests are causing problems, even if it's 100% legal and zoned properly and you're following every rule to the letter, you're still going to get hate mail, owners harassing guests, calling the cops for every little infraction, etc, etc.
Not to mention you're a big bad evil investor pushing out owner occupants and driving up the cost of housing by taking away homes from young adults who grew up on the internet and know how to get noticed on social media.
- Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes4y
The biggest complaint I hear from STR is the rowdiness in the middle of the week.
When my wife and I travel to Peru, we stay in an Airbnb. Although we are quiet, sometimes are flights come in late and we stay in a condo. That means in the middle of the night we are walking down the hallways with our rolling suitcases. I could see how that might upset permanent residences.
We had a listing next to an Airbnb. It was awful and part of the reason why buyers passed on our house. It wasn't because of the noise because we would show the house during the day. The issue was the trash left outside. The garbage cans were overflowing.
However, a lot of this stems down to poor management. The owner could have someone organize the trash more efficiently or tell guests to keep everything in bags.
When we stayed in the condo, the owner could say to please check in prior to a certain time.
It does contribute to lower housing availability for permanent residences, regardless of locations. With that said, you have property rights and your have the right to do what you want and when you want with your property (pending HOA/City rules).
- Property Manager · Kissimmee, FL · Member since 2019 · 445 posts · 266 votes4y
@Matt Castle - agree! We live in Orlando, and recently wanted to buy a second small home in Miami (the plan was for my son to live there and we would stay there when we visit).
Aside from the outrageous home prices even in moderate to low income residential neighborhoods, we were shocked to see how many were marketed as "suitable for Airbnb" or "great Airbnb property". Obviously, residents and long term renters ARE being displaced.
As a property manager in Orlando, I like the idea that most of our homes were purpose-built as vacation rentals in vacation communities. The zoning will always stay STR friendly, and no-one is being displaced. The neighbors will always be other vacationers (who may also be annoyed by unruly behavior, but the problem guests will move on.)
- Rental Property Investor · FL · Member since 2016 · 271 posts · 92 votes4y
For those individual hating on it, The only solutions is....for you to become STR owner and enjoy your hard work rewards. That way you stop hating on STR. I moved into a new development, already in the past 4 months had 3 different couples on our same street call the cops on their spouses, people parking on the streets, and many residents leaving their trash bins out side for days, etc. yada yada. IDGAF as long as my safety is not compromise. I can lean on the negatives and breath heavy or just let it go and focus on the margins of this lovely symbol "$$$" , make memories and on to the next property. Always something for somebody to make it personal. So lets call out the the universe and lets make it rain good vibes, and focus on the Benjamin's. As for this question, just in case you are researching to see if is worth it, I say do it, go get them STR and deal with the later things, later. For every one sharing their knowledge and experiences on BP , thank you always.
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Erik Browning:
Here's the thing - STR owners are a disorganized and greedy bunch that capitalized on the opportunity to make substantial returns with full disregard of the neighborhood and the peace.
Exaggerate much? Let me reword that sentence for you so that it is at least somewhat accurate....
"A very small number of STR owners have tried to get the best return on their investment, and thus have sometimes disregarded common sense and annoyed their neighbors"
- 4yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
A few random thoughts, in no particular order:
1. STRs are businesses. More specifically, they are hotels. I don’t want a hotel next door to me, and for a number of reasons that have been discussed.
2. Zoning ordinances exist for a reason. For residential areas, they exist to preserve the integrity of the neighborhood and provide for the quiet enjoyment thereof.
3. Violating zoning ordinances so that you can make a buck is slimy. You don’t want a hotel opening up next to your house any more than the neighbors you are doing this to.Neither would it be very nice to open up a whore house, crack house, or your own shade tree car mechanic business with 8 cars scattered on the front lawn.
Let's get real here and quit acting like this shouldn't be a big deal to neighbors. It is. If you want to own a STR investment, have some consideration of others and do things the right way.
It’s not just about you.
- Property Manager · Nova Scotia · Member since 2021 · 78 posts · 52 votes4y
@Ryan Moyer is right, you've listed the reason people don't like them. That's the answer.
Are they wrong/misunderstanding the issue? Probably. Keep in mind that they also don't get to make as much money as you're making off of STR success. Even the local cafe that all your guests or tenants go to...they don't get the same value out of that one person as you do.
In real estate investing in general you run the risk of being made to look like the bad guy for any number of reasons (most connected to the independent frustrations and insecurities of those complaining). Just don't give in and become the bad guy (failing to understand the other side of things is really risky, so it's good that you're asking the question).
If they hold a town hall to run you out of town, attend. If they pass a new law that ruins your business model, move the business or change it.
We had 12 high-volume STRs come under fire when Covid set in because the Condo boards complained about safety (and to a certain extent the concern is understandable). We fought it as much as reasonably possible, then packed up and doubled down on the rest of our portfolio. Didn't lose any sleep and now we know the local condo market isn't the right place for our STR investment.
People are always going to complain about landlords. Just don't give them any real reasons, and you can continue to lead a happy and productive life.
- Investor · Golden, CO · Member since 2017 · 56 posts · 57 votes4y
I own a short term rental in Joshua Tree California and there is a lot of blowback from the locals on this. In fact, a moratorium on new licenses was imposed just recently. Even locals who are employed by short term rentals in this area seem to have sour feelings about the owners of short term rentals. Interestingly, owners of short term rentals in the area who have been locals for a long time are bitter about outside investors coming in and operating their own short term rentals remotely.
What I'm getting at is that there is a lot of animosity for short term rental owners in one of the areas I operate in.
I think this stems from several things but mainly it is an attitude that anyone who is making money while you are not is greedy. It is a recognition that you are not doing enough to get in on the profits, with a side of hatred for those who are receiving profits.
It is a touch of the human nature of jealousy.
But, it is also a real thing that people are experiencing an increase in cost of living that they are not able to keep up with. It is easy to blame short term rentals because it seems like an obvious correlation.
We need to be compassionate to those who are struggling while also understanding that this is the ebb and flow of all real estate locations. I'm from New York and this is what we call gentrification. It happens everywhere and the pain it causes is almost always the same. People get priced out of neighborhoods they have roots in. But, that doesn't mean the ebb and flow of neighborhood desirability and improvement will ever stop. We simply are on the side of it where we engage in benefits instead of being upset about its existence.
That being said, there are ways to give back especially when operating a short term rental.
- Are you hiring local people to clean, maintain and design your properties reinvesting a portion of the earnings back in the community?
- Are your amenities from local vendors?
- Do you recommend local attractions and restaurants to your guests in your welcome materials?
- Do you yourself support the local vendors when you happen to travel to your property?
These are four ways in which you can give back to the community.
Bonus suggestions:
- Purchase property in the community that you then rent out at affordable rates for the locals in your area.
Thanks for reading!
Patricia Berman
- Rental Property Investor · FL · Member since 2016 · 271 posts · 92 votes4y
Quote from @Patricia Berman:
I own a short term rental in Joshua Tree California and there is a lot of blowback from the locals on this. In fact, a moratorium on new licenses was imposed just recently. Even locals who are employed by short term rentals in this area seem to have sour feelings about the owners of short term rentals. Interestingly, owners of short term rentals in the area who have been locals for a long time are bitter about outside investors coming in and operating their own short term rentals remotely.
What I'm getting at is that there is a lot of animosity for short term rental owners in one of the areas I operate in.
I think this stems from several things but mainly it is an attitude that anyone who is making money while you are not is greedy. It is a recognition that you are not doing enough to get in on the profits, with a side of hatred for those who are receiving profits.
It is a touch of the human nature of jealousy.
But, it is also a real thing that people are experiencing an increase in cost of living that they are not able to keep up with. It is easy to blame short term rentals because it seems like an obvious correlation.
We need to be compassionate to those who are struggling while also understanding that this is the ebb and flow of all real estate locations. I'm from New York and this is what we call gentrification. It happens everywhere and the pain it causes is almost always the same. People get priced out of neighborhoods they have roots in. But, that doesn't mean the ebb and flow of neighborhood desirability and improvement will ever stop. We simply are on the side of it where we engage in benefits instead of being upset about its existence.
That being said, there are ways to give back especially when operating a short term rental.
- Are you hiring local people to clean, maintain and design your properties reinvesting a portion of the earnings back in the community?
- Are your amenities from local vendors?
- Do you recommend local attractions and restaurants to your guests in your welcome materials?
- Do you yourself support the local vendors when you happen to travel to your property?
These are four ways in which you can give back to the community.
Bonus suggestions:
- Purchase property in the community that you then rent out at affordable rates for the locals in your area.
Thanks for reading!
Patricia Berman
💯
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
@Patricia Berman Those are great concepts and ideas.....I would add that STRs have a built-in benefit to any community - they attract tourists, who are more likely than a single local family to go out every night they are there, dine at the local establishments, shop at the local shops, visit museums and generally spend a TON of money in the community over a period of a couple days. This alone benefits the community. Then add in the TOT taxes, which go to the State and City and will build roads, schools, etc.
Anyone opposed to STRs is clearly not thinking it through....
- Investor · Golden, CO · Member since 2017 · 56 posts · 57 votes4yAgreed Bruce. That doesn't mean that presenting it to them will change their minds. Sometimes when people are on the wrong side of the poverty line, it is difficult to process and synthesize new information. Heck, sometimes people who are wealthy have a hard time admitting a change in landscape. When food and shelter feel out of reach it is easy to blame those that don't share your struggle.
Quote from @Bruce Woodruff:
@Patricia Berman Those are great concepts and ideas.....I would add that STRs have a built-in benefit to any community - they attract tourists, who are more likely than a single local family to go out every night they are there, dine at the local establishments, shop at the local shops, visit museums and generally spend a TON of money in the community over a period of a couple days. This alone benefits the community. Then add in the TOT taxes, which go to the State and City and will build roads, schools, etc.
Anyone opposed to STRs is clearly not thinking it through....
That being said, I agree with you that typically bringing tourism and industry to any location is a plus. - Property Manager · Georgia/Florida · Member since 2022 · 3 posts · 2 votes4y
Let me share another prospective. In some states, like Hawaii, it is the hotels AND the locals that are pressuring the local government to limit STRs. The hotels have a little leverage because they pay to be a member of the tourism board, an entity funded by the State. For the hotels, the main argument is around taxes and that the AirBnBs/VRBOs should be held to a certain tax standard as are the hotels. As for the locals, it really is a matter sustainability and protecting the natural resources of the Islands. I've heard it said that the locals feel that some visitors that stay in STRs do not respect sacred landmarks and other cultural nuances. Locals feel that STR hosts should take more responsibility in educating their guest. (Now don't kill the messenger, I'm just sharing the insight I've learned in working on the hospitality side.)
- Property Manager · Georgia/Florida · Member since 2022 · 3 posts · 2 votes4y
And let me clarify my last statement - when I say "AirBnBs/VRBOs", I mean the hotels feel like the the STR investors utilizing the AirBnBs and VRBO are not paying their fair share of taxes.
- 4yCollin HaysBusiness MemberProperty Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
Quote from @Bruce Woodruff:
@Patricia Berman Those are great concepts and ideas.....I would add that STRs have a built-in benefit to any community - they attract tourists, who are more likely than a single local family to go out every night they are there, dine at the local establishments, shop at the local shops, visit museums and generally spend a TON of money in the community over a period of a couple days. This alone benefits the community. Then add in the TOT taxes, which go to the State and City and will build roads, schools, etc.
Anyone opposed to STRs is clearly not thinking it through....
I don't think it's opposition to STRs per se, any more than opposition to McDonald's, a tanning salon, or a beef packing plant. But residential areas zoned R-1 are typically off limits for commercial enterprises of any kind. And when you start making exceptions, your residential neighborhood goes to pot.
I have a guy down the street from me running a landscape business from his house. It's against code but he's been doing it for years. This is in an upscale development. His house is surrounded by tree trimming trucks and equipment. Now his neighbor, an apartment landlord, is beginning to keep all of his stuff out in front too - trailers full of old appliances, etc.
It is OK to have a business. It's not OK to violate code and impose it on others who didn't sign up to be neighbors with it.
Respect.
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Collin Hays:
I agree. But most all STRs are allowed by current codes and zoning. If people don't like it, they can change the laws/code/zoning... Otherwise they can go F themselves. Tired of whiners....
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