Rental Property Investor · Boone, NC · Member since 2015 · 291 posts · 88 votes
Hi,
I wanted to know what were the rules associated with Airbnb or Vrbo in the Watauga County in North Carolina, more specifically in areas including Boone, Blowing rock or Banner Elk or other places in the High Country of NC.
Is there a maximum days per month limit that you can rent a place ? Does it have to be your primary residence ? Is there any HOA that might prevent any of this ?
I am really looking to get more local knowledge on this area, any help would be greatly appreciated !
Hi @Christi Mercer, I'm glad @Tristan S. tagged me and I'm happy to connect. I'll also add my two cents for anyone else reading this thread.
I started short-term renting a house outside of Boone town limits back in August. As far as regulations go, I would definitely recommend talking to a local official about it before making any major decisions. I would also recommend reading this article from the Watauga Democrat about STRs in the county and town. https://www.wataugademocrat.co...
The article gave me a much better understanding of the operations of STRs in Boone when I was trying to make decisions. There are quotes from the town attorney about how "short-term rentals are “technically illegal,” but that the town’s planning department has not been enforcing it." Also from Watauga County Tourism Development Authority notes that "online rental companies now account for 30 to 31 percent of occupancy tax revenue". To me that says that the town greatly benefits from "technically illegal" STRs so I would be surprised to see any enforcement made to STRs in town limits. Again, it's ultimately up to you and I would recommend talking to a local lawyer to better understand the risks before making any decisions.
There are a few surprises that I discovered after I started. For one, the county and state taxes account for 12.5% of your rental revenue and I also use a management company (Evolve Vacation Rentals) that takes another 10% and that really eats into my potential income.
Another thing I want to note is that it takes a lot of leg work to make a STR worthwhile compared to a long-term rental. I had a buddy that did STR in Banner Elk and got burned out in just a few months because he took on everything on his own. He communicated with guests, cleaned, maintained, managed the listing, everything. Some people are cut out for that but I personally am not so that's why I use a management company and a cleaner which, again, eats into potential revenue but greatly put my mind to rest. Being on Queen St, you will likely have same-day turnovers and that's a lot of pressure if you try to clean on your own without having the extra hands that a cleaning company has.
On the other hand, since the pandemic, STRs in Watauga have been doing really well and I'm personally very grateful that I started when I did. I read another Watauga Democrat article a few months ago that stated 2020's third quarter (July-Sept.) provided the county with as much occupancy tax as entire years in the past. So obviously STRs around Boone/Blowing Rock are in high demand. I imagine this trend will continue as long as people are trying to find respite from cities during the pandemic.
I also agree with Tristan that you seem to have a solid long-term rental as a backup if STR doesn't work out. I was in a similar situation and decided that it would be easier to pivot from STR to long-term but not so much vise-versa. I say, if you have the opportunity to do STR, then you should try it to see if it is a good fit.
@Tristan S. I've done the math already and I think its a risk worth taking. I just need to jump. Worst case scenario, I convert back to long term rental, which is not so bad.
If so, we have monthly real estate meetings. We meet at Booneshine usually. We just chat about real estate. Share knowledge and motivate each other. We have a small fb group.
Hi @Christi Mercer, I'm glad @Tristan S. tagged me and I'm happy to connect. I'll also add my two cents for anyone else reading this thread.
I started short-term renting a house outside of Boone town limits back in August. As far as regulations go, I would definitely recommend talking to a local official about it before making any major decisions. I would also recommend reading this article from the Watauga Democrat about STRs in the county and town. https://www.wataugademocrat.co...
The article gave me a much better understanding of the operations of STRs in Boone when I was trying to make decisions. There are quotes from the town attorney about how "short-term rentals are “technically illegal,” but that the town’s planning department has not been enforcing it." Also from Watauga County Tourism Development Authority notes that "online rental companies now account for 30 to 31 percent of occupancy tax revenue". To me that says that the town greatly benefits from "technically illegal" STRs so I would be surprised to see any enforcement made to STRs in town limits. Again, it's ultimately up to you and I would recommend talking to a local lawyer to better understand the risks before making any decisions.
There are a few surprises that I discovered after I started. For one, the county and state taxes account for 12.5% of your rental revenue and I also use a management company (Evolve Vacation Rentals) that takes another 10% and that really eats into my potential income.
Another thing I want to note is that it takes a lot of leg work to make a STR worthwhile compared to a long-term rental. I had a buddy that did STR in Banner Elk and got burned out in just a few months because he took on everything on his own. He communicated with guests, cleaned, maintained, managed the listing, everything. Some people are cut out for that but I personally am not so that's why I use a management company and a cleaner which, again, eats into potential revenue but greatly put my mind to rest. Being on Queen St, you will likely have same-day turnovers and that's a lot of pressure if you try to clean on your own without having the extra hands that a cleaning company has.
On the other hand, since the pandemic, STRs in Watauga have been doing really well and I'm personally very grateful that I started when I did. I read another Watauga Democrat article a few months ago that stated 2020's third quarter (July-Sept.) provided the county with as much occupancy tax as entire years in the past. So obviously STRs around Boone/Blowing Rock are in high demand. I imagine this trend will continue as long as people are trying to find respite from cities during the pandemic.
I also agree with Tristan that you seem to have a solid long-term rental as a backup if STR doesn't work out. I was in a similar situation and decided that it would be easier to pivot from STR to long-term but not so much vise-versa. I say, if you have the opportunity to do STR, then you should try it to see if it is a good fit.
@Daniel Jones - great info! I am in the process of setting up an STR outside of town limits - do you have recommendations for a cleaning company? I am from Boone originally and know some folks but honestly would like to hire a business that specializes in turnovers. :)
Hi @Ashley Rummage. I have Lisa Wilkins' cleaning company do the cleaning. Lisa and her team are awesome and well organized. The company is officially called "Peace of Mind Cleaning" (very fitting) and I'll message you her phone number.
I'll mention this for you and anyone else reading No matter who you go with I recommend using a team of cleaners and not just an individual. I had some trouble with the first cleaner I hired that just did things by herself which did not work out since she was not always available and often had multiple same-day turnovers.
Lisa is great and her husband is a handyman which makes for a great time. And if I recall correctly she plans to start her own prop management business in the future!
@Tristan S. Thanks! When are the meetings? Can you also invite me to the FB group.
@Daniel Jones great article. I have read it several times in the past, as I have been trying to navigate what I should / want to do. Earlier in the fall I met with an AirBnb host in the area and she shared a lot of great tips / apps that she uses to manage their STR. Hostfully & SmartBnB were the two that she recommended. Both apps have low fees and basically run the "management" side of the home outside of the cleaning service. She also said they don't allow for same-day turn over because the stress is too much. After looking at everything I think it's the right move. Do you have a local attorney that you recommend? I would like to learn more about the legal ramifications for worst case scenarios. Thank you both for your help!
@Christi Mercer I got mine up and running quickly and I didn't give myself time to research many management options. Hostfully and Smartbnb look like great options and I might switch to those. Thanks for sharing!!
Christi, I purchased 5 acres in Zionville with the intention of placing 3 to 4 structures for AirBB rentals. It has a well, septic and high speed internet lines already. It's an unincorporated area with no Hoa. It's been a nightmare with Watauga County even with a local contractor helping. They say that you can only have 2 structures on the property or else it has to be subdivided and the septic rules are stringent. No one can say what will be permitted and what won't. They say it's up to the State but we have found that this isn't true. I'm debating now whether to just keep the land and look for a new spot.
@Paul Cook that’s very interesting. I thought that the basic limit in watauga was two properties per 1 ac of land. I would assume that you would have been allowed to put 10 structures on 5 acres.
Then the actual physical limit would have probably been dictated by your septic as they require a minimum of 2 bedroom capacity per structure even if it’s a small 200 SF tiny house. So 10 structures would require a 20 bedroom septic capacity which would be unrealistic.
Having said that, I feel that putting 3 or 4 should have been realistic.
What is their logic behind only allowing two ? Is there a rule saying that only a maximum of two structures can be built per plot of land no matter what the size of the land is ?
@Paul Cook that’s very interesting. I thought that the basic limit in watauga was two properties per 1 ac of land. I would assume that you would have been allowed to put 10 structures on 5 acres.
Then the actual physical limit would have probably been dictated by your septic as they require a minimum of 2 bedroom capacity per structure even if it’s a small 200 SF tiny house. So 10 structures would require a 20 bedroom septic capacity which would be unrealistic.
Having said that, I feel that putting 3 or 4 should have been realistic.
What is their logic behind only allowing two ? Is there a rule saying that only a maximum of two structures can be built per plot of land no matter what the size of the land is ?
Thank you
Tristan,
I was told that you can only have 1 residential dwelling per plot and only 2 plots on a plat that is under 5 acres. The only exception would be to split it up by applying to be a residential subdivision. Then you could have more. Watauga County is making it very difficult. So if you want multiple structures, plan on buying greater than 5 acres.
Do you have any idea what the going rate or price per square foot is to build in and around Boone? I have heard around $200-$225 per sq/ft.
@Paul Cook i would not be so sure about the price per square foot to build, that depends vastly on a number of things. How flat is the lot, what kind of finishes...etc
What size structure were you planning on building ? How many bedroom/bathroom ?
Hi @Tristan S. I have a property right on King Street and I'm turning the top floor into a STR this summer. Can you also add me to your FB real estate group?
Hi @Tristan S. Would love to be added to the BP group for the Boone area if you guys are still meeting up! My husband and I are closing on a cabin in Vilas in two weeks and will be using it as a short term rental. I am curious if you have any cleaners you recommend? I have called Peace of Mind Cleaning company, like @Daniel Jones recommended, but have yet to hear back with a quote. I have called them a few times. Anyway, would love to connect with group! Thanks for all the help!
How have you guys done with STR's through the covid?
The wife and myself are currently trying to decide if we want to start with a LTR locally or do a STR somewhere we would like to visit on a regular basis.
@Tristan S.- my wife and I recently purchased a LTR plan plan to convert to a STR when the lease is over. We'd love to be a part of the BP group/ stay connected with fellow investors in the area.
Thanks for the invite but I am not able to make it - a quick update - we started working on a STR but due to complications with driveway work etc and an opportunity at the coast popped up, we tabled it. I am still interested in finding a small cabin up there if anyone knows of anything. Here is the Airbnb we started at Carolina Beach and it has been a lot of fun :)
Hi all you Watauga investors - how is the market doing up there? I have seen a lot of Raleigh area Realtors purchase homes to STR up there and am curious what those who are living in the market are feeling about things. Is it oversaturated? Do you feel that inventory is picking up?
Have a place in Banner Elk. There are no day limits, that I know off. We have a professionally managed, local company that takes care of everything and they have clients that rent their places for 80%+ of the days/year.