Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
Of course your individual results can vary. There are people fighting this post too. What are you seeing in your market?
Reposted from Twitter....
Nick Gerli@nickgerli1 The Airbnb collapse is real.
Revenues are down nearly 50% in cities like Phoenix and Austin.
Watch out for a wave of forced selling from Airbnb owners later this year in the areas hit hardest by the revenue collapse.
I am in Orlando and I think the collapse is even bigger than the figures hear. My STR management partners are anecdotally telling me that the figure is nearer 40% down but that this is beacsue tour operators have choked back their forward bookings as they got over enthusiastic last year and got burned. If anyone is looking for long term property management I just got a great deal on fees from a very experienced company here in Florida.
I am in Orlando and I think the collapse is even bigger than the figures hear. My STR management partners are anecdotally telling me that the figure is nearer 40% down but that this is beacsue tour operators have choked back their forward bookings as they got over enthusiastic last year and got burned. If anyone is looking for long term property management I just got a great deal on fees from a very experienced company here in Florida.
I don't have any STR, but am intrigued. I don't know the %, but here in Dallas rates have fallen dramatically and I see lots of vacancy. Daily rates are often at LTR rates, with lots of vacancy which means there are a lot of people loosing money.
Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
3y
I am at STR Forum in Austin and this morning Bram Gallagher, an economist from AirDNA said they do not know where this report came from. Airbnb also put out a statement today to the same effect. I have the video on Instagram if anyone is interested. I don't know how to repost it here.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
3y
I think this is like when your friends go to Vegas. No one tells you they lost their shirt and pawned their Rolex. Everyone comes back a winner. However, they didn't build all those 4000-5000 room hotels by giving everyone who walks in $1000, probably the reverse of that.
I always look at booking calendars when people tell me they're killing it.
Randomly I chose a pretty nice looking "cabin" 5 bedroom in Sevierville....which I've probably never been to or remember anything about. I don't think I'd even heard about it before today. Picked random week a couple of weeks from now. It was called Sevierville Home w/ Mountain & Lake Views! Rate is crossed out from $447 and now $337 per night. For July as of today they have 13/30 nights booked. August 6/31 nights. Obviously they still have time to pick up bookings....but that looks like ghost town to me. Rough value of the home $610,000. Not sure about furnishings. Would it take $50,000 to furnish nice 5 bedroom? They have hot tub and to me the furnishing don't look cheap.
Is this peak season for the area? Out of $337/night what drops to bottom line after utilities, booking fees, management fees. Does everyone book last minute vacations on airbnb?
I see a lot of places for 1/2 this rate.....I can imagine a year or two ago they were double the price, but maybe I'm way off. So I don't know if this guy who came up with the chart is right or not, or if it is just click bait, but seems plausable.
Investor · Orlando, FL · Member since 2021 · 57 posts · 22 votes
3y
Based on some of the replies here, it may be that there is oversaturation of certain types of products in certain markets. For example, if you have a nice yet unoriginal property in Austin TX then that product in that market is probably experiencing declines in revenues. Increases in supply of particular products in any market accompanied with any of the following will create a new equilibrium price below previous levels: decline in demand, no change in demand, a smaller increase in demand than supply. With regard to your target market, how many substitute goods are there? Does your customer just need a decent place to stay for the night? If so, then in many markets there are a surplus of options that will result in similar satisfaction for the consumer, including hotels. If, however, you have a truly unique property with very little substitute goods, the price may be stickier. You have a scarce product in the market. Then again, these more unique, generally more expensive, products are still equally susceptible to broader macroeconomic trends that can change the demand for particular high-ticket listings.
The important distinction is probably not between airbnb and vacation homes so much as the particular supply and demand curves in a given market, number and quality of substitute goods, and the broader economic trends.
Lender · Venice, CA · Member since 2021 · 189 posts · 132 votes
3y
This topic is getting a lot of attention lately. I first learned about it from a youtube real estate channel. I did a quick search and discovered that AllTheRooms, the source behind the story, is data analytics company that studies the short term rental market. No comment on the accuracy or reputation. Here's a link to their website https://alltherooms.com/
I am at STR Forum in Austin and this morning Bram Gallagher, an economist from AirDNA said they do not know where this report came from. Airbnb also put out a statement today to the same effect. I have the video on Instagram if anyone is interested. I don't know how to repost it here.
Bear in mind though that of course they would say this.
I am at STR Forum in Austin and this morning Bram Gallagher, an economist from AirDNA said they do not know where this report came from. Airbnb also put out a statement today to the same effect. I have the video on Instagram if anyone is interested. I don't know how to repost it here.
Bear in mind though that of course they would say this.
They’ve indicated that they cannot replicate the data. Instead of 46% decline they were able to calculate 7.2%. Personally, I have never heard of Alltherooms. I’d tend to believe AirDNA and Airbnb and not a company I’ve never heard of. I also don’t know who the original tweet came from. Was that someone reputable? I tend to not believe everything I see or read on the internet.
In my market, some units are down by 15% this summer. Not 47%.
Yeah, how many times is this going to get posted. We know....everything sucks....we are all going to hell in a handbasket.
As a new STR player myself all I can say is we have 24 nights booked out of 31 days in July and our place has only been listed for a month. We are pleasantly surprised and have three 5 star reviews already.
Yeah, how many times is this going to get posted. We know....everything sucks....we are all going to hell in a handbasket.
As a new STR player myself all I can say is we have 24 nights booked out of 31 days in July and our place has only been listed for a month. We are pleasantly surprised and have three 5 star reviews already.
Congrats Kristi! I am new to this space and currently scoping out a market-- may I ask which market you are in?
We are located about 10 miles from Schlitterbahn which is in New Braunfels Texas and we just have a small cabin on the river. So the draw here is all about the river, tubing, kayaking, Schlitterbahn etc… We didn’t buy to get into the STR business, it’s just our family cabin and we spend a lot of time at the coast and figured why not share it and help pay for our coast trips.
Yeah, how many times is this going to get posted. We know....everything sucks....we are all going to hell in a handbasket.
As a new STR player myself all I can say is we have 24 nights booked out of 31 days in July and our place has only been listed for a month. We are pleasantly surprised and have three 5 star reviews already.
Heck yeah, Kristi! Congrats. This data was I am pretty sure disproved by multiple reputable players in this space, including data specialty firm, STR Insights.
We are located about 10 miles from Schlitterbahn which is in New Braunfels Texas and we just have a small cabin on the river. So the draw here is all about the river, tubing, kayaking, Schlitterbahn etc… We didn’t buy to get into the STR business, it’s just our family cabin and we spend a lot of time at the coast and figured why not share it and help pay for our coast trips.
That is wonderful! Do you find that your market has less competition overall which may contribute to why there is such high occupancy?
Investor · Orange County, CA · Member since 2014 · 363 posts · 408 votes
3y
1. It's a simple supply and demand issue.
Many markets became "Known" for purchasing an Airbnb (Florida, Rocky Mountains, etc.). because of that many people went out and purchased homes and put them on Airbnb (hell I even had a condo in Florida under contract to do this, luckily it fell through).
Too many people doing this means travelers had more options, means occupancy rate goes down.
2. This is clearly very market specific. Some markets are seeing a strong decline others aren't. Some markets saw a flood of Airbnb listings go up in the last 24 months, others didn't
There's absolutely a decrease. Whether it's as drastic as this data says, I don't think so.
Rental Property Investor · New Braunfels, TX · Member since 2022 · 408 posts · 408 votes
3y
There is a lot of STR competition around us. We just have a better product:) And we aren't doing this to earn a living, this is play money for us so we might be charging a little less than others...
Realtor · Las Vegas, NV · Member since 2014 · 994 posts · 1k+ votes
3y
Hello,
I regularly read that various real estate markets are collapsing. My recommendation is to ignore the “experts” and look at the actual data for a market.
For example, I regularly read where Las Vegas is crashing, inventories rising, and that there are a lot of distressed properties. Below is a chart from the MLS (08/01/2023) which includes all property types and all price ranges. Six months of inventory is considered a balanced market. Currently, inventory is around 2.1 months and falling.
What about single-family home distressed properties:
Bank owned: 16, which is about 0.0029% of all single-family homes
Short sale: 7, which is about 0.0013%
Foreclosure stated: 7, which is about 0.0013%
So, ignore the “experts” with click-bait titles and look at the actual data for the city you are considering.
All the above said, short-term rentals are dependent upon tourism. In most cases, if the economy declines, people will not take as many vacations and you will have more vacancies and lower prices for both hotel rooms and Airbnb's. Also, there are seasonality issues and high operating costs associated with short-term rentals. For these and other reasons, we are implementing a one-stop service for mid-term rentals.
Advantages of Mid-Term Rentals
Short-term rentals are primarily occupied by vacationers. Mid-term rentals are primarily occupied by people for business reasons. For example, traveling nurses have to have a place to live. So mid-term rentals are a rental of necessity. There are also other advantages:
More consistent income: Mid-term rentals provide a more stable and predictable income stream. By securing rental income for several months at a time, you reduce the risk of vacancies and income fluctuations that are common with short-term rentals.
Lower operational costs: Short-term rentals often require landlords to cover additional expenses such as cleaning services, frequent maintenance, and utility costs associated with frequent turnovers. In contrast, mid-term rentals have fewer turnovers, resulting in lower operational costs.
Less legal and regulatory complexity: Some cities have strict regulations regarding short-term rentals, which may necessitate permits, taxes, and compliance with specific rules. Mid-term rentals, on the other hand, encounter fewer legal and regulatory complexities.
Better quality tenants: With short-term rentals, you get people on holiday and wanting to party. They will only be there for a short time, so they are less concerned about taking care of the property. Most mid-term rental tenants tend to take better care of the property because they will be there for an extended time and have a larger security deposit. Also with mid-term rentals, you can do a full screening and not rent to people with a track record of issues.
Cost effect management: Several people have described buying a short-term rental property as equivalent to buying a second job with no boundaries on work hours. In contrast, with our team and processes, mid-term rental properties require little time investment. This enables clients to focus on their primary jobs and do what they do best.
Our Methodology
“The only constant in life is change.”
Our approach to mid-term rentals is to select properties that will be excellent long-term rentals and then use them as mid-term rentals. That way, if the mid-term rental market changes, you have the option to convert it to a long-term rental.
If a property will be a mid-term rental, it changes some of our long-term rental processes. For example, renovations. With long-term rentals, we often install commercial-grade nylon carpets in the bedrooms. However, a mid-term rental will have more frequent tenant turnovers, and it's important to keep turnover costs and time to a minimum. Therefore, we would install LVP throughout the property because it is very durable.
Mid-term rentals may also impact location selection. For example, if the plan is to target traveling nurses, we stay within a 5-mile radius (if possible) of trauma level 1 and 2 hospitals. Below is a map of Las Vegas hospitals with 5-mile travel boundaries.
Summary
Today, mid-term rentals are an excellent investment option due to their more reliable cash flow and higher returns compared to long-term rentals. In my view, mid-term rentals offer the advantages of both short-term rentals and long-term rentals.
I think this is like when your friends go to Vegas. No one tells you they lost their shirt and pawned their Rolex. Everyone comes back a winner. However, they didn't build all those 4000-5000 room hotels by giving everyone who walks in $1000, probably the reverse of that.
I always look at booking calendars when people tell me they're killing it.
Randomly I chose a pretty nice looking "cabin" 5 bedroom in Sevierville....which I've probably never been to or remember anything about. I don't think I'd even heard about it before today. Picked random week a couple of weeks from now. It was called Sevierville Home w/ Mountain & Lake Views! Rate is crossed out from $447 and now $337 per night. For July as of today they have 13/30 nights booked. August 6/31 nights. Obviously they still have time to pick up bookings....but that looks like ghost town to me. Rough value of the home $610,000. Not sure about furnishings. Would it take $50,000 to furnish nice 5 bedroom? They have hot tub and to me the furnishing don't look cheap.
Is this peak season for the area? Out of $337/night what drops to bottom line after utilities, booking fees, management fees. Does everyone book last minute vacations on airbnb?
I see a lot of places for 1/2 this rate.....I can imagine a year or two ago they were double the price, but maybe I'm way off. So I don't know if this guy who came up with the chart is right or not, or if it is just click bait, but seems plausable.
I just watched a BP podcast yesterday with Tony Robinson and Rob Abasolo and one of the topics they discussed was how common last minute bookings on their Joshua Tree and Smoky Mt airbnbs are.
