STR Woes... am i panicking or is there a solution?
Member since 2021 · 28 posts · 8 votes
STR Woes... am i panicking or is there a solution?
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votesOnce you start selling cheap, you get cheap guests. They end up destroying your place, trying to get refunds for nothing and complain about everything.
I don't agree with it being mostly about undercutting the competition. It is more about creating a great space with great amenities and building a great reputation.
37 Replies
- 3yLuke CarlPro MemberRental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
I think the bigger problem is not knowing the seasonality of the market, my guess is this is just a dead month as it is for most of us. This could very well be a “dang I wish I would have taken a breather in January when I had the chance because now I’m busy again”
check your enemies for march and April prices. I bet they’re much higher than they are right now. although I don’t like hearing the over leverage 21/22 stories they are all too common.
I wish you the best! - Member since 2022 · 1k+ posts · 1k+ votes3y
If you were well booked in December, then I doubt that there was some sudden flood of new units or other market changing event that would be to blame for the slow January. Seems that this is quite common in most markets where winter is the slow season. There is always a collective "belt tightening" in January as people come out of the holidays, check their credit card statements, and promise to spend less, only to go back to their old behaviors a few months later. Plus, most people take time off in the Thanksgiving through New Years stretch because that is what we are accustomed to culturally and we already have some free days off to combine. Plus employers expect us to return to work raring to go in January, so people tend to travel less now anyway.
Either way I would recommend squirreling away money into a separate reserve account and be sure to put at least some of the profits during the better months into this as well. Even better, consider using any extra cash to pay down your principal so that you can chip away at your monthly. Every bit helps, good luck.
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
We are pretty slow in January, but were booked pretty good in December and slammed full in November. Before you panic, just wait another month or two....
And check your competition. like @Luke Carl said....
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Hey @Tamera Muniz. Like everyone else, Jan is a slow month for us. Like zero bookings, but that is normal for us as we are a May-Oct lake house.
This is your first year? They are always thin. You need time to build up the rep and reviews. Then bookings should come fast and furious.
Post a link to the listing so we can take a look. Maybe there are some things that can be done to improve the look.
Greeley is too far from skiing right? What other winter activities are there?
I don't see a way to lower the payments without something drastic that wouldn't do anything anyways.
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
A quick look on VRBO shows a lot of sterile, generic places. There is also some kind arbitrage company called Vector Travel who seems to have made deals with some apartment complexes. They are the worst photos. They are all the same regardless of the unit they are renting.
There is almost zero decor. Easily the worst places I have seen. No personality at all. A turd in the yard. An old turd...
STRs are largely based off undercutting the competition price wise. Look for similarly sized STRs in that region and take about 30% off your listing. Think volume! Being booked 20 days a month at 100/night is better than being booked 5 days a month at 130/night. These aren't hard numbers but more of an example for you to experiment with. Good luck.
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Once you start selling cheap, you get cheap guests. They end up destroying your place, trying to get refunds for nothing and complain about everything.
I don't agree with it being mostly about undercutting the competition. It is more about creating a great space with great amenities and building a great reputation.
- I agree, you don't want to have a S***hole rental. You have to make it amazing in every way. But pricing is HUGE. Keep your prices too high and you'll suffer. I know by saying trust me it means nothing.... but trust me..lol
Quote from @Michael Baum:
Once you start selling cheap, you get cheap guests. They end up destroying your place, trying to get refunds for nothing and complain about everything.
I don't agree with it being mostly about undercutting the competition. It is more about creating a great space with great amenities and building a great reputation.
- House Hacking Specialist · Denver, CO · Member since 2016 · 411 posts · 396 votes3y
@Tamera Muniz so sorry to hear about the HELOC. Keep in mind that this is a long term investment and we are in the slower months. Since 12/31 have you done anything different with your listing? Move some photos around, change listing name, adjust pricing (not undercut competition, just drop it down a few), offer any "new listing discounts"?
Doing some of these things could help trigger some of Airbnb's algorithm and push you listing up to the top to get some more view.On the other hand, I have heard from many newer guests that their first month or 2 was slammed then dead which makes me to believe that airbnb will favor you for a month or two to hook you and get your bough it. After that time period, you are on your own. I could be off in left field though.Best of luck.
It sounds like you didn't do your research or you would have forseen this coming (airbnb is extremely month to month, and december is known for high traffic since its a holiday month for many people)
I'd recommend you 1. do some actual research on your market, see which months do better than others so you have better expectations.
2. post your listing here so we can offer tailored, targeted advice
3. Lower your prices so you begin getting booked out.
4. Look at your competitors and see if they're A. simply better than you B. not booked either or C. cheaper than you.- Lender · Member since 2020 · 331 posts · 209 votes3y
What rental income #s did you use to underwrite your deal before purchasing? Is $2400 per month or $28,800 per year feasible based on your research? If so it’s probably seasonality. Also with all of our STRs, we’ve noticed a ramp up period. The first 6-9 months you’re building reviews. Like someone else said, it’s a long term investment and you’ll start to build momentum with time!
- 3yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Michael Baum:
Once you start selling cheap, you get cheap guests. They end up destroying your place, trying to get refunds for nothing and complain about everything.
I don't agree with it being mostly about undercutting the competition. It is more about creating a great space with great amenities and building a great reputation.
Agreed. I would much rather have my places sit empty than have even slightly bad guests....
- Investor · Nortnern Colorado · Member since 2020 · 170 posts · 131 votes3y
@Tamera Muniz I'm in Greeley too. Own multiple STRs (but not here). I've been in the area many years. Momentary cashflow may not be the only issue here. If I can help, DM me.
- Member since 2021 · 28 posts · 8 votes3y
Quote from @Luke Carl:
I think the bigger problem is not knowing the seasonality of the market, my guess is this is just a dead month as it is for most of us. This could very well be a “dang I wish I would have taken a breather in January when I had the chance because now I’m busy again”
check your enemies for march and April prices. I bet they’re much higher than they are right now. although I don’t like hearing the over leverage 21/22 stories they are all too common.
I wish you the best!This makes me feel much better - thank you for the reminder. I will have to check the competition for those months, luckily my city doesn't have much.
- Member since 2021 · 28 posts · 8 votes3y
Quote from @Jon Martin:
If you were well booked in December, then I doubt that there was some sudden flood of new units or other market changing event that would be to blame for the slow January. Seems that this is quite common in most markets where winter is the slow season. There is always a collective "belt tightening" in January as people come out of the holidays, check their credit card statements, and promise to spend less, only to go back to their old behaviors a few months later. Plus, most people take time off in the Thanksgiving through New Years stretch because that is what we are accustomed to culturally and we already have some free days off to combine. Plus employers expect us to return to work raring to go in January, so people tend to travel less now anyway.
Either way I would recommend squirreling away money into a separate reserve account and be sure to put at least some of the profits during the better months into this as well. Even better, consider using any extra cash to pay down your principal so that you can chip away at your monthly. Every bit helps, good luck.
This makes total sense. I figured it was just terrible timing on my part to start the STR game. I will definitely be putting away some money once it gets busier to even it out. Thank you for your insight!
- Member since 2021 · 28 posts · 8 votes3y
Quote from @Michael Baum:
Hey @Tamera Muniz. Like everyone else, Jan is a slow month for us. Like zero bookings, but that is normal for us as we are a May-Oct lake house.
This is your first year? They are always thin. You need time to build up the rep and reviews. Then bookings should come fast and furious.
Post a link to the listing so we can take a look. Maybe there are some things that can be done to improve the look.
Greeley is too far from skiing right? What other winter activities are there?
I don't see a way to lower the payments without something drastic that wouldn't do anything anyways.
Thank you for commenting. It's this that makes me feel better about the situation knowing at least it's not just my property and I'm doing something wrong. This is our first year, in fact our first few months as we just launched mid December. Greeley is a college town mostly and also has two hospitals, nothing too exciting but we wanted to start in our hometown to get a feel for it all. Not many winter activities necessarily but about an hour from a lot of them.
Due to my panicking, I decided to get help from a management/advertising company named Evolve so they redid the listing and reposted it. This listing doesn't have any reviews yet since changing management where my original listing had 5 reviews. Here is the link for our listing:https://www.airbnb.com/rooms/8...
Any insight is of course helpful despite using them. Thank you again for your response.
- Member since 2021 · 28 posts · 8 votes3y
Quote from @Ben Einspahr:
@Tamera Muniz so sorry to hear about the HELOC. Keep in mind that this is a long term investment and we are in the slower months. Since 12/31 have you done anything different with your listing? Move some photos around, change listing name, adjust pricing (not undercut competition, just drop it down a few), offer any "new listing discounts"?
Doing some of these things could help trigger some of Airbnb's algorithm and push you listing up to the top to get some more view.On the other hand, I have heard from many newer guests that their first month or 2 was slammed then dead which makes me to believe that airbnb will favor you for a month or two to hook you and get your bough it. After that time period, you are on your own. I could be off in left field though.Best of luck.
Hi Ben, thank you for your response and input. Since December I decided to use a management company named Evolve to help us get the listing out there so they took new photos and redid the listing. It is here: https://www.airbnb.com/rooms/8...
I really think you're correct in Airbnb's algorithm in the first few months, it was definitely booked solid initially and now nothing. But again, could just be a slow month.
- Member since 2021 · 28 posts · 8 votes3y
Quote from @Scott K.:
It sounds like you didn't do your research or you would have forseen this coming (airbnb is extremely month to month, and december is known for high traffic since its a holiday month for many people)
I'd recommend you 1. do some actual research on your market, see which months do better than others so you have better expectations.
2. post your listing here so we can offer tailored, targeted advice
3. Lower your prices so you begin getting booked out.
4. Look at your competitors and see if they're A. simply better than you B. not booked either or C. cheaper than you.Thank you Scott for the input. As a new investor, I thought I did enough research and didn't want to get stuck in "analysis paralsis" so I made the move. Likely you are right though, there is definitely more I could of done in order to prepare myself. I will look more into my competitors to see what they offer.
Here is my listing under new management: https://www.airbnb.com/rooms/8...
Please give me your thoughts
- Member since 2021 · 28 posts · 8 votes3y
Quote from @Lyndsay Zwirlein:
What rental income #s did you use to underwrite your deal before purchasing? Is $2400 per month or $28,800 per year feasible based on your research? If so it’s probably seasonality. Also with all of our STRs, we’ve noticed a ramp up period. The first 6-9 months you’re building reviews. Like someone else said, it’s a long term investment and you’ll start to build momentum with time!
They used $2100 as the rental income to underwrite the deal. The $2400 is feasible but going to be tight. I think it's definitely seasonality and it's causing me to panic quite a bit - we just have to make it through and with this being one of the first months, it's causing some concern. Thank you for the positivity though I believe you are right, eventually we will get there.
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Arrrghhh @Tamera Muniz. Evolve is a bad choice. They take your money, charge more to the guests and you get very little in return. I am so sorry you went that way. You will end up dropping them in the end like most do. Unfortunately they own that listing and the photos.
I am not trying to beat you down or freak you out. It is never a good idea to make major decisions while under duress.
The place itself is pretty cute! I like the look overall. The proximity of the stove to the fridge is a bummer but usable. I would also change out that shower curtain. It is sooo bulky. Looks like a comforter hanging up there. :)
Anyways, please check in with the forum before making any drastic changes like moving to Evolve. We can help and that is why we are here.
I PM'd you.
- 3yJared HottleBusiness MemberReal Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes
It sounds like you may be in a difficult financial position due to the high payments on your HELOC and mortgage. However, there are a few options that may be able to help lower your monthly payments and make them more manageable.
- Refinance: You may be able to refinance your mortgage and HELOC to secure a lower interest rate and potentially lower your monthly payments.
- Change your loan terms: You may be able to negotiate with your lender to change the terms of your loan, such as switching from a fully amortizing loan to an interest-only loan.
- Rent to a long-term tenant: Renting your property to a long-term tenant may provide more consistent and reliable income than using it as an short-term rental.
- Look for additional revenue streams: You could try to find additional revenue streams for your property, such as renting out storage space, offering laundry service, or charging for parking.
- Renting out a room in the property : You could rent out a room in the property to a long-term tenant, this way you can make more money and help with the mortgage payments.
It's important to keep in mind that these options may not be feasible in all situations, and it may take some time to implement them. In the meantime, it may be beneficial to speak with a financial advisor to help you assess your options and create a plan to address your financial concerns.
It's also important to keep in mind that the situation with the bookings on your STR is not necessarily a long-term issue, it could be a seasonal fluctuation and it's possible to bounce back in the future. It's a good idea to track your occupancy rate, revenue, and expenses over time so you can make informed decisions about your property in the future.
Jared Hottle Real Estate59 Reviews - 3yCliff H.Pro MemberRental Property Investor · Nashua, NH · Member since 2014 · 598 posts · 477 votes
Every single December before the winter rush we have here in New England the hair on the back of my neck stands up worrying about mass vacancy in one of the busiest seasons of year. This January being one of the warmest on record made that situation even worse.
Now we’re almost completely booked up and all that happened within a period of 2-3 weeks time once the temps dropped and snow fell. You don’t have to be renting to skiers to understand the lesson here: everyone has a seasonality curve and macroeconomic factors beyond your listing can and will impact your bookings more than you know.
Track your seasonality, learn the macros, & use the pricing dashboards not just for pricing, but for demand tracking as well. - 3yBen RhodinBusiness MemberRealtor · Denver, CO · Member since 2020 · 338 posts · 331 votes
Hey @Tamera Muniz! As most people have pointed out already January and February are usually the slowest months in terms of STRs here in Colorado, and in general. So I wouldn't be too worried yet, but it is something to keep in mind for next year.
I agree with @Ben Einspahr that new Airbnbs get pushed the first month or two and then get pushed to the sidelines. It is a process to get an STR fully operational, and I usually tell clients to count on 4 months until they are stable. It is also important to remember that an STR is an annual business, not month-to-month. You go off of annual revenue as some months are dead, and some months you are fully booked. So always have reserves and keep money in the bank to cover those slow months, or if something happens and you have to take it down for some time, otherwise you will be in trouble.
I don't know your property specifically, but you may want to look into other strategies for the winter months, or in general. Greeley does have a large medical campus, a large university with a nursing school, and a large contract-based workforce. I have clients utilizing MTRs up there and are getting solid returns due to the poor competition. It may be worth looking into if your property is suitable for it.
Not to throw shade either, but I am assuming that your realtor wasn't much help here, in educating you or assisting you in the process. They should have laid out the seasonality, and what to expect and given you realistic numbers on the property. As well as make sure you had backup strategies in case. Sounds like a realtor just wants the commission :( I've had a few clients forced to sell in Greeley, or bring me in to assist them in repositioning due to this. Not knowing the property $2100 sounds pretty conservative for an STR, I have a client with a 2/1 duplex in Greely and he is doing that as an MTR, so STR should be getting higher. Possibly if that was averaged over the year.
I would also agree that it is a bad choice to go with a management company, STR companies charge way to much and do very little. If you are already tight on the margins, the company won't help with that. I would get your systems in order, and handle it yourself. Happy to help there, and it can be very little time needed. - 3yRyan ThomsonBusiness MemberReal Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
@Tamera Muniz don't panic yet. January and February are two of the WORST months for STRs in the front range. Lots of people have entered the STR market and you have to stand out now in order to get booked. Here a couple tips to try before panicking:
1. Set up smart dynamic pricing with smartlabs or wheelhouse. It will make your pricing competitive and help you get booked.
2. Take REALLY good photos.
3. Spend some money and decorate really well. Get as many of the amenities that you can filter for on the airbnb site as possible.
The Assumable Guy544 Reviews
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