Phoenix & Scottsdale STR Occupancy Rates

[Mike Hern]

I just bought a nice 5 bed 4 bath with pool and mountain views in North Phoenix 85032 that I might make into a STR.

I went to an STR analytics site which says that the zip code has 794 STR homes with a 44% occupancy average over the course of the last 12 months. A mile a way is North Scottsdale which has about the same number of STRS and a 43% occupancy rate over the last 12 months.

Is 43% - 44% occupancy to be expected in nicer destination cities? 

Granted it gets a wee hot in the summer months and STRs grind to a halt, but over the course of 12 months I would have expected 60% to 70% occupancy from what other are posting.

Is the website off on it's numbers?

[Mike Eichler]

One thing I can suggest is to be super picky with which house data you look at... What I mean by this is go in and look at each house to determine if the data is fair to use when comparing it to your subject property. If you are looking at a currently performing STR that is way nicer than yours, then you should not use data from that home; similarly, if the home is way worse, you should not use that data either. When I am comparing properties and analyzing how much they should expect to pull in as far as nightly rates and occupancy, I comb through each property nearby and pick the best 5 that are the most similar and use the averages of those numbers to determine the revenue.

Hope this helps a little bit. Let me know if you have any more questions.

[Mike Hern]

Quote from @Mike Eichler:

One thing I can suggest is to be super picky with which house data you look at... What I mean by this is go in and look at each house to determine if the data is fair to use when comparing it to your subject property. If you are looking at a currently performing STR that is way nicer than yours, then you should not use data from that home; similarly, if the home is way worse, you should not use that data either. When I am comparing properties and analyzing how much they should expect to pull in as far as nightly rates and occupancy, I comb through each property nearby and pick the best 5 that are the most similar and use the averages of those numbers to determine the revenue.

Hope this helps a little bit. Let me know if you have any more questions.

@Mike Eichler: I like your point.

I'm curious if you know off hand what percentage of occupancy you average over a 12 month period and if that number has gone up or down in the last year?

Several posts here have said their bookings are down because AirBNB and/or VRBO changed their algorithm. Others have said they haven't seem any change. 

So, if bookings are low and if they are going lower, I want to run my calculations using the lower numbers to see if it makes sense to STR.

However, If the last 12 month's bookings were still strong in Scottsdale, that's helpful to know.

[John Underwood]

The best way is look at actual similar properties to yours on Vrbo and Airbnb to get the best data possible. 

These numbers seem low and you can usually find ways to outperform the competition by buying a great property in a great location and offering better amenities. 

[Mike Hern]

Quote from @John Underwood:

The best way is look at actual similar properties to yours on Vrbo and Airbnb to get the best data possible. 

These numbers seem low and you can usually find ways to outperform the competition by buying a great property in a great location and offering better amenities. 

@John Underwood: Your comment: "These numbers seem low" is helpful
I spent some time tracking down comps on AirBNB and the numbers are all over the board. I think there are a lot of new STRs entering the market here and they have reduced prices to get established.

What would be a good number to use for costs per month for things like supplies, replacing missing items, soap, shampoo, paper towels, toilet paper, garbage bags, lawn care, pool care, etc, etc, etc. Not counting normal between tenant cleaning costs?

(I just asked this of the wrong guy by mistake who doesn't do STR, which was pretty funny. He was good about it though.) 

[Michael Baum]

Hey @Mike Hern, that does seem low to me as well considering the area. I would have expected in the 60s somewhere.

Regarding costs, it will depend. The higher end the rental, the lower the chances of someone walking off with stuff. Breakage is always a factor. For example I need to go buy more tall glasses. I had 16, now I have 8. No one ever lets me know of course. :)

So for our place, which is a bit smaller at 4/3 that sleeps 10, I would guess that we spend about $1200 a year on consumables. That is rough as I don't have my spreadsheet in front of me. It could be more.

I am a fiend for deals so I don't pay market rates. I never pay more than 15 cents for a Keurig coffee pod. I buy small soaps and shampoo's when they have a coupon on Amazon in bulk. Most of the paper products are from Costco. Hard to beat for the quality. You can save some with commercial products, but people know and trust things like Costco toilet paper. You really can't use it to sand pine wood. :)

Pool care and lawn care is out of my reach as I have neither.

Our house is very well stocked. Guests don't need to bring paper towels, toilet paper, laundry detergent, etc etc. I have only had one complaint about the amount of TP and they just didn't realize where the extras were. Some guests never open up a cabinet.

[Mike Hern]

Quote from @Michael Baum:

Hey @Mike Hern, that does seem low to me as well considering the area. I would have expected in the 60s somewhere.

Regarding costs, it will depend. The higher end the rental, the lower the chances of someone walking off with stuff. Breakage is always a factor. For example I need to go buy more tall glasses. I had 16, now I have 8. No one ever lets me know of course. :)

So for our place, which is a bit smaller at 4/3 that sleeps 10, I would guess that we spend about $1200 a year on consumables. That is rough as I don't have my spreadsheet in front of me. It could be more.

I am a fiend for deals so I don't pay market rates. I never pay more than 15 cents for a Keurig coffee pod. I buy small soaps and shampoo's when they have a coupon on Amazon in bulk. Most of the paper products are from Costco. Hard to beat for the quality. You can save some with commercial products, but people know and trust things like Costco toilet paper. You really can't use it to sand pine wood. :)

Pool care and lawn care is out of my reach as I have neither.

Our house is very well stocked. Guests don't need to bring paper towels, toilet paper, laundry detergent, etc etc. I have only had one complaint about the amount of TP and they just didn't realize where the extras were. Some guests never open up a cabinet.

@Michael Baum: Your Comment "about $1200 a year on consumables" is what I was looking for, thanks.

I just got off the phone with a local STR property manager who says for my address her number is 63% occupancy at $511 a night. They don't take care of pool/lawn so I guess I'll have to have that done by outside help.

I like the idea of keeping things well stocked. We were at a "more expensive" STR in a vacation spot that had no spatula. I had to innovate to flip my eggs.

[Michael Baum]

Tell me about it @Mike Hern, it is amazing to me how many owners don't outfit their rental properly. Not enough of anything. Cups, plates, bowls, knives etc. I hit them hard with 3 star reviews if there isn't the basics. I am not saying it needs to be like ours, but if there isn't a sharp knife to cut anything, bam, 3 stars at the best!

I will start going through my spreadsheet and see if I can get you a more accurate number for this year. Also, some things last a long time, like dryer sheets. You spend 10 bucks at Costco for 750 sheets or whatever. I just bought my 2nd set with the first one lasting 5 seasons. You burn through TP, paper towels, trash bags etc.

I buy small 1oz soaps and 1.5oz shampoos and don't do bulk. Most people bring their own so I have bought 100 count boxes of those 2x now for 5 years. 

[Mike Dymski]

I just got off the phone with a local STR property manager who says for my address her number is 63% occupancy at $511 a night.

That's $10k per month gross.  Nice!  I don't think you have to worry too much about supplies.

[Mike Hern]

Quote from @Mike Dymski:

I just got off the phone with a local STR property manager who says for my address her number is 63% occupancy at $511 a night.

That's $10k per month gross.  Nice!  I don't think you have to worry too much about supplies.

Lol,  It's the accuracy of the numbers I'm concerned about. I can calculate a Subject To or Lease Option in my head while wiring a three way light switch, because I've done both for so long. But having to rely on numbers I haven't personally vetted for STR is a bit of a change. One source said to expect $250 at 43% occupancy. Someone is clearly way off. ;-)

[Mike Hern]

Quote from @Michael Baum:

Tell me about it @Mike Hern, it is amazing to me how many owners don't outfit their rental properly. Not enough of anything. Cups, plates, bowls, knives etc. I hit them hard with 3 star reviews if there isn't the basics. I am not saying it needs to be like ours, but if there isn't a sharp knife to cut anything, bam, 3 stars at the best!

I will start going through my spreadsheet and see if I can get you a more accurate number for this year. Also, some things last a long time, like dryer sheets. You spend 10 bucks at Costco for 750 sheets or whatever. I just bought my 2nd set with the first one lasting 5 seasons. You burn through TP, paper towels, trash bags etc.

I buy small 1oz soaps and 1.5oz shampoos and don't do bulk. Most people bring their own so I have bought 100 count boxes of those 2x now for 5 years. 

Good advice.

[Mike Dymski]

Check out the enemy method from the short term shop to get a feel for rates and occupancy.  It may not work though based on the cyclical nature of PHX.

@scott e may be able to help. Can't seem to tag him.