A few questions as I'm considering transitioning LTRs into STRs

Member since 2020 · 26 posts · 13 votes

1) Would anyone in the Charlotte area be willing to share their STR revenue and occupancy last year? Ideally for a 3 bed 2 bath home. I've reviewed some resources and Airbnb, but it would be hugely helpful to see some anecdotal numbers.

2) Is there an ideal time of the year to be opening your doors to STRs in Charlotte?

3) What is the climate on STR regulation in the area? Based on what I've reviewed, it looks like there were some attempts to regulate over the last couple of years, but it had fizzled out. I've also read the state legislature has a bill attempting to block regulation on STRs completely. As it stands, I believe there's no current regulation in place other than an occupancy tax.

I'm considering opening up my property to short-term and medium-term as well. It would be nice to meet some connections who are doing the same. An ideal scenario for me would be to build a network that can pass on opportunities if, for example, our homes are full.

Looking forward to hearing from you!

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Levi BennettPro Member

Real Estate Broker · Charlotte, NC · Member since 2014 · 285 posts · 248 votes

@Tyler Sherman I think I should chime in. Before I get into it.. I own 5 properties in NC, and have brokered 30+ STRs in NC around Charlotte and Western North Carolina in the last 18 months, and have been doing STR, Multi-family, MTR, and LTR acquisitions and disposition for over 9 years. So I'm not just a random guy chiming in. I have lived in Charlotte most of my life, and specialize in investment acquisition.

First of all, the questions you're asking are really good ones, but you'd be served well to work with someone with experience in LTR, MTR, and STR acquisition so that they can help you sift you through the data and discuss the pros and cons with some actual experience. Nothing against @Eliott Elias but, the truth is, your strategy should align with the goals you have. In some cases that is LTR, other cases that is MTR or STR. There's simply not enough information about you to determine your goals and how best to meet them. Knowing the pros and cons and having PAID data is helplful. I have a full state-wide license to use AirDNA (opinions will differ on this, but here's mine..) and it is, by far, the most accurate. That's coming from experience in comparing my clients performance to actual P&L's that have been sent to me to review. Rabbu is typically low, and inaccurate in certain markets, and Pricelabs have been having issues lately (there's been a bit of an exodus lately into different software platforms). I also pay for Mashvisor, and have spoken to the people at Awning and honestly most of the data just stinks. I can explain why more technically, but basically everyone is scraping the data differently, and weighting things differently.. Also, there is a lot of useless data that is heaped in that isn't helpful and makes the underwriting confusing.

Most importantly, what @Anne Sargeant said about exact location, and TYPE OF HOUSE is going to be massive. Maybe in one zip code 3-bedrooms are completely over-saturated, but 4+ bedrooms are in high demand. Layer that with a unique style house with a unique feature to the property and you get one that will do 180% more revenue. STR is not a passive investment, so looking at overall numbers are always misleading. You can always beat the projection by stacking "value layers".. things like unique architecture, bedrooms per dollar, views, amenities, interior design, availability (mentioned above) will be your drivers of revenue more than actual location.. so, while location is important, in my opinion, it is NOT the MOST important thing when underwriting.

Also, from a legal perspective, you can check out this blog I wrote last year after the Wilmington appeals case was lost: "Short Term Rental Restrictions in North Carolina"
The biggest news that's happened since then is that there is a bill that has been introduced to completely ban regulatory restrictions by local governments on STRs, however, it hasn't been added to the house vote yet, so it remains to be seen.. NC, as a state, has been extremely friendly to STRs historically.. there's a lot of reasons why but it's rooted in private property law interpretation here that's very favorable to the owner. In many cities however, you will find there is a big desire to regulate or restrict STRs due to the affordable housing crisis here, so.. we'll see what happens, but for now, that blog I wrote is still accurate and explains it in more detail.

Finally, since you asked.. here's a few screenshots that might help a little bit.

Just on quick glance, you can see that 1-3 bedrooms are very overcooked and you'll have an uphill battle getting occupancy. You'll have wind in your sails as Airbnb will boost your listing as a new property for the first 12 months, but in the long run, having a 4+ bedroom is going to be much easier to stand out. In general, you can see the steady growth in market cap, which shows a healthy market.

Not to open another can of worms, but another reason to speak with someone local will be to discuss the plethora of exploding areas around the city that are ripe for STR and MTR growth.

A quick note about MTRs.. in the Charlotte-Metro area in 2022, there were 8000 total listings for MTRs and 60,000 applications. Take that for what you will, but the strategy among the most successful investors here is to buy with the intention of multiple exits, including STR, MTR and possible LTR in the future, and listing across multiple platforms, say STR and MTR at the same time, and take the tenants that make the most sense.

There's a lot more to talk about, but I hope some of this is helpful. Feel free to reach out if you have any questions. Good luck!

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Karl McGarvey
Real Estate Agent · Houston, TX · Member since 2019 · 763 posts · 500 votes
3y
For you #1 - Use Pricelabs! They have market data for only $10 that provides an incredible amount of market insight. I use it on every deal that I represent clients on down here in the Houston/Galveston area
2 Reply
Anne Sargeant
Property Manager · NC · Member since 2022 · 17 posts · 23 votes
3y
@Tyler Sherman My company manages STRs & MTRs in the Charlotte area and would be happy to share knowledge.
1) Exact location of the home is going to be a huge factor as well as other factors such as amenities etc.
2) January and February are by far the slowest months in Charlotte across the board. I don't think there is an ideal time to open doors, rather just make sure you're aware that the first 3-4 months post going live are going to be a bit slower revenue wise while you ramp up your guest reviews. Once you have a solid number of reviews, your listing will continue to perform better YOY.
3) There was discussion of adding regulations to the Charlotte area a year + ago, however that was tabled due to a court case in Wilmington. I would imagine this will come back up sometime in the future but wouldn't be too concerned. Most of the regulations proposed were reasonable with the exception of one stating that you couldn't have another STR within 400 ft of another STR. These were still in the proposal stage and I, along with many others, participated in discussions with the city on why this would be harmful to STR owners. The arguments made were pretty powerful in my opinion and I felt confident this one would not make it to the final stage. That being said, there is no guarantee so it's always good to have a backup plan. Currently, there is nothing even in the proposal stage so I don't see regulations being an issue anytime soon.
If you want to connect and share the address of your home, I'd be happy to assist in helping you determine the revenue potential!
3 Reply
Tyler Sherman
OP
Member since 2020 · 26 posts · 13 votes
3y
Quote from @Karl McGarvey:

For you #1 - Use Pricelabs! They have market data for only $10 that provides an incredible amount of market insight. I use it on every deal that I represent clients on down here in the Houston/Galveston area

Hey Karl -- thanks for the suggestion. I just purchased a dashboard for one of the properties on Pricelabs. I tried to do my own comparative analysis to filter down the properties that are most like my own. I noticed that the comp sets are broken down by Airbnb and VRBO. If I were to put my STRs on both platforms, is it sensible to combine the two figures, i.e., the estimated revenue from the VRBO + Airbnb to understand what my revenue could look like?

I find it a bit of a product gap that they don't attempt to give you a total revenue figure. Airdna's free calculator tool did give me a sense at a high level. I just wasn't able to see the data broken down like pricelab has it for each platform.

Thanks for your help!

0 Reply
Karl McGarvey
Real Estate Agent · Houston, TX · Member since 2019 · 763 posts · 500 votes
3y
Quote from @Tyler Sherman:

Quote from @Karl McGarvey:

For you #1 - Use Pricelabs! They have market data for only $10 that provides an incredible amount of market insight. I use it on every deal that I represent clients on down here in the Houston/Galveston area

Hey Karl -- thanks for the suggestion. I just purchased a dashboard for one of the properties on Pricelabs. I tried to do my own comparative analysis to filter down the properties that are most like my own. I noticed that the comp sets are broken down by Airbnb and VRBO. If I were to put my STRs on both platforms, is it sensible to combine the two figures, i.e., the estimated revenue from the VRBO + Airbnb to understand what my revenue could look like?

I find it a bit of a product gap that they don't attempt to give you a total revenue figure. Airdna's free calculator tool did give me a sense at a high level. I just wasn't able to see the data broken down like pricelab has it for each platform.

Thanks for your help!

Pricelabs actually does give you an estimated revenue and occupancy. On the right side of the report where it says "column filters" you can add both of them. Every market is different for which platform performs better for a given listing. What I look at more closely than the averages, are the properties closest to the one I am looking at for my clients. Specifically the numbers they have as well as reviews and the reasons for those reviews. If revenue is low, I am trying to find out if there is a problem that is fixable with new mgmt, or if the property is a dead end from the beginning.
1 Reply
Tyler Sherman
OP
Member since 2020 · 26 posts · 13 votes
3y
Quote from @Karl McGarvey:

Quote from @Tyler Sherman:

Quote from @Karl McGarvey:

For you #1 - Use Pricelabs! They have market data for only
$10 that provides an incredible amount of market insight. I use it on every deal that I represent clients on down here in the Houston/Galveston area

Hey Karl -- thanks for the suggestion. I just purchased a dashboard for one of the properties on Pricelabs. I tried to do my own comparative analysis to filter down the properties that are most like my own. I noticed that the comp sets are broken down by Airbnb and VRBO. If I were to put my STRs on both platforms, is it sensible to combine the two figures, i.e., the estimated revenue from the VRBO + Airbnb to understand what my revenue could look like?

I find it a bit of a product gap that they don't attempt to give you a total revenue figure. Airdna's free calculator tool did give me a sense at a high level. I just wasn't able to see the data broken down like pricelab has it for each platform.

Thanks for your help!

Pricelabs actually does give you an estimated revenue and occupancy. On the right side of the report where it says "column filters" you can add both of them. Every market is different for which platform performs better for a given listing. What I look at more closely than the averages, are the properties closest to the one I am looking at for my clients. Specifically the numbers they have as well as reviews and the reasons for those reviews. If revenue is low, I am trying to find out if there is a problem that is fixable with new mgmt, or if the property is a dead end from the beginning.

Let me know if I'm missing something. In the View comp stats drop down, you can choose from ABB or VRBO data sets not both (screenshot 3). When you click on the data sets it give you different KPIs for estimated revenue per platform (screenshots 2 and 3).
Not sure how the customize filters option you mentioned would help here. (screenshot 1).
Basically, I'm wondering if combining revenues from screenshot 2 and screenshot 3 is the right way to think about estimated revenue based on pricelab data.
Hopefully, I'm not being dense! Thanks again!
0 Reply
KiKi ChaseBusiness Member
Real Estate Agent · Indianapolis, IN · Member since 2022 · 184 posts · 75 votes
3y
Hi @Tyler Sherman! That's awesome, congrats! Best was to learn about most of these questions would be to look at the "competition" in your area, that are similar to your home in size, and updates. Look at home much they're renting for, what their fees look like, and how full their calendars are! It's free to do through Airbnb.
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Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
You could also check out Awning.coms estimator. It is free and it can show you who is doing what around you.
0 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Here’s some advice for getting into short term rentals right now. Don’t. Spare your time and energy into buying more long-term rentals.
0 Reply
Levi BennettPro Member
Real Estate Broker · Charlotte, NC · Member since 2014 · 285 posts · 248 votes
3y
@Tyler Sherman I think I should chime in. Before I get into it.. I own 5 properties in NC, and have brokered 30+ STRs in NC around Charlotte and Western North Carolina in the last 18 months, and have been doing STR, Multi-family, MTR, and LTR acquisitions and disposition for over 9 years. So I'm not just a random guy chiming in. I have lived in Charlotte most of my life, and specialize in investment acquisition.

First of all, the questions you're asking are really good ones, but you'd be served well to work with someone with experience in LTR, MTR, and STR acquisition so that they can help you sift you through the data and discuss the pros and cons with some actual experience. Nothing against @Eliott Elias but, the truth is, your strategy should align with the goals you have. In some cases that is LTR, other cases that is MTR or STR. There's simply not enough information about you to determine your goals and how best to meet them. Knowing the pros and cons and having PAID data is helplful. I have a full state-wide license to use AirDNA (opinions will differ on this, but here's mine..) and it is, by far, the most accurate. That's coming from experience in comparing my clients performance to actual P&L's that have been sent to me to review. Rabbu is typically low, and inaccurate in certain markets, and Pricelabs have been having issues lately (there's been a bit of an exodus lately into different software platforms). I also pay for Mashvisor, and have spoken to the people at Awning and honestly most of the data just stinks. I can explain why more technically, but basically everyone is scraping the data differently, and weighting things differently.. Also, there is a lot of useless data that is heaped in that isn't helpful and makes the underwriting confusing.

Most importantly, what @Anne Sargeant said about exact location, and TYPE OF HOUSE is going to be massive. Maybe in one zip code 3-bedrooms are completely over-saturated, but 4+ bedrooms are in high demand. Layer that with a unique style house with a unique feature to the property and you get one that will do 180% more revenue. STR is not a passive investment, so looking at overall numbers are always misleading. You can always beat the projection by stacking "value layers".. things like unique architecture, bedrooms per dollar, views, amenities, interior design, availability (mentioned above) will be your drivers of revenue more than actual location.. so, while location is important, in my opinion, it is NOT the MOST important thing when underwriting.

Also, from a legal perspective, you can check out this blog I wrote last year after the Wilmington appeals case was lost: "Short Term Rental Restrictions in North Carolina"
The biggest news that's happened since then is that there is a bill that has been introduced to completely ban regulatory restrictions by local governments on STRs, however, it hasn't been added to the house vote yet, so it remains to be seen.. NC, as a state, has been extremely friendly to STRs historically.. there's a lot of reasons why but it's rooted in private property law interpretation here that's very favorable to the owner. In many cities however, you will find there is a big desire to regulate or restrict STRs due to the affordable housing crisis here, so.. we'll see what happens, but for now, that blog I wrote is still accurate and explains it in more detail.

Finally, since you asked.. here's a few screenshots that might help a little bit.

Just on quick glance, you can see that 1-3 bedrooms are very overcooked and you'll have an uphill battle getting occupancy. You'll have wind in your sails as Airbnb will boost your listing as a new property for the first 12 months, but in the long run, having a 4+ bedroom is going to be much easier to stand out. In general, you can see the steady growth in market cap, which shows a healthy market.
Not to open another can of worms, but another reason to speak with someone local will be to discuss the plethora of exploding areas around the city that are ripe for STR and MTR growth.

A quick note about MTRs.. in the Charlotte-Metro area in 2022, there were 8000 total listings for MTRs and 60,000 applications. Take that for what you will, but the strategy among the most successful investors here is to buy with the intention of multiple exits, including STR, MTR and possible LTR in the future, and listing across multiple platforms, say STR and MTR at the same time, and take the tenants that make the most sense.

There's a lot more to talk about, but I hope some of this is helpful. Feel free to reach out if you have any questions. Good luck!
7 Reply
Tyler Sherman
OP
Member since 2020 · 26 posts · 13 votes
3y
Quote from @Eliott Elias:

Here’s some advice for getting into short term rentals right now. Don’t. Spare your time and energy into buying more long-term rentals.

HI Eliott - curious why you have this view.
0 Reply
Tyler Sherman
OP
Member since 2020 · 26 posts · 13 votes
3y
Quote from @Levi Bennett:

@Tyler Sherman I think I should chime in. Before I get into it.. I own 5 properties in NC, and have brokered 30+ STRs in NC around Charlotte and Western North Carolina in the last 18 months, and have been doing STR, Multi-family, MTR, and LTR acquisitions and disposition for over 9 years. So I'm not just a random guy chiming in. I have lived in Charlotte most of my life, and specialize in investment acquisition.

First of all, the questions you're asking are really good ones, but you'd be served well to work with someone with experience in LTR, MTR, and STR acquisition so that they can help you sift you through the data and discuss the pros and cons with some actual experience. Nothing against @Eliott Elias but, the truth is, your strategy should align with the goals you have. In some cases that is LTR, other cases that is MTR or STR. There's simply not enough information about you to determine your goals and how best to meet them. Knowing the pros and cons and having PAID data is helplful. I have a full state-wide license to use AirDNA (opinions will differ on this, but here's mine..) and it is, by far, the most accurate. That's coming from experience in comparing my clients performance to actual P&L's that have been sent to me to review. Rabbu is typically low, and inaccurate in certain markets, and Pricelabs have been having issues lately (there's been a bit of an exodus lately into different software platforms). I also pay for Mashvisor, and have spoken to the people at Awning and honestly most of the data just stinks. I can explain why more technically, but basically everyone is scraping the data differently, and weighting things differently.. Also, there is a lot of useless data that is heaped in that isn't helpful and makes the underwriting confusing.

Most importantly, what @Anne Sargeant said about exact location, and TYPE OF HOUSE is going to be massive. Maybe in one zip code 3-bedrooms are completely over-saturated, but 4+ bedrooms are in high demand. Layer that with a unique style house with a unique feature to the property and you get one that will do 180% more revenue. STR is not a passive investment, so looking at overall numbers are always misleading. You can always beat the projection by stacking "value layers".. things like unique architecture, bedrooms per dollar, views, amenities, interior design, availability (mentioned above) will be your drivers of revenue more than actual location.. so, while location is important, in my opinion, it is NOT the MOST important thing when underwriting.

Also, from a legal perspective, you can check out this blog I wrote last year after the Wilmington appeals case was lost: "Short Term Rental Restrictions in North Carolina"
The biggest news that's happened since then is that there is a bill that has been introduced to completely ban regulatory restrictions by local governments on STRs, however, it hasn't been added to the house vote yet, so it remains to be seen.. NC, as a state, has been extremely friendly to STRs historically.. there's a lot of reasons why but it's rooted in private property law interpretation here that's very favorable to the owner. In many cities however, you will find there is a big desire to regulate or restrict STRs due to the affordable housing crisis here, so.. we'll see what happens, but for now, that blog I wrote is still accurate and explains it in more detail.

Finally, since you asked.. here's a few screenshots that might help a little bit.

Just on quick glance, you can see that 1-3 bedrooms are very overcooked and you'll have an uphill battle getting occupancy. You'll have wind in your sails as Airbnb will boost your listing as a new property for the first 12 months, but in the long run, having a 4+ bedroom is going to be much easier to stand out. In general, you can see the steady growth in market cap, which shows a healthy market.
Not to open another can of worms, but another reason to speak with someone local will be to discuss the plethora of exploding areas around the city that are ripe for STR and MTR growth.

A quick note about MTRs.. in the Charlotte-Metro area in 2022, there were 8000 total listings for MTRs and 60,000 applications. Take that for what you will, but the strategy among the most successful investors here is to buy with the intention of multiple exits, including STR, MTR and possible LTR in the future, and listing across multiple platforms, say STR and MTR at the same time, and take the tenants that make the most sense.

There's a lot more to talk about, but I hope some of this is helpful. Feel free to reach out if you have any questions. Good luck!

This is hugely helpful! Thanks, Levi! I sent you a message.
0 Reply
Matt Miller
Lender · Charlotte, NC · Member since 2023 · 16 posts · 8 votes
3y
Hey @Tyler Sherman! I am a lender here in the Charlotte area but reach out to @Stephanie Walker she runs a MTR company in the area and they are very knowledgeable in this niche! To piggyback off of @Levi Bennett this is a really untapped market in the Charlotte area. I think it is definitely worth exploring!
Also, here to help if you have any financial needs or want to talk strategies!!
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