Determine how much an STR will make using the ENEMY method
Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votesDetermine how much an STR will make using the ENEMY method
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votesOriginally posted by @Joseph Cacciapaglia:
@Luke Carl I'm curious why you exclude professional managers from your competition. Are you assuming that you can't compete with them, or that they'll be doing a poor job? If it's the latter, I think this is a poor assumption. Our STR team outperforms most self managers in the area by a wide margin. I think it's best to compare yourself to the best competition in your market, regardless of how they are managed.
I know the answer.
Because I , Lucas and many other individuals can out perform any PM.
No one has a bigger incentive than to do the best that can be done than a motivated owner.
Does you PM answer inquiries at 10PM? We do. Does your PM answer inquiries in minutes ahead of all the other properties they manage? We do as we only manage our own properties.
Does your PM answer inquiries on Sunday? We do.
Does your PM constantly monitor competition to be better than everyone else and represent only your best interest? We do
I could go on, but I think your get the idea.
31 Replies
- 6yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Great List!
I would add in addition to square footage and sleeping capacity look at similar amenities.
If everyone in your area has a hot tub , then you need one too. If hardly anyone else has one then you don't have to have it.
In my area there are many houses on the lake. Some don't have a view of the lake from the house. These are no where similar to a house that has a view of the lake as well as being on the lake.
A pet friendly house will rent more and at better rates that a non pet friendly house. Many people travel with the family dog. Pet fees are extra income!
As @Luke Carl says it is important to know your enemy (competition) so that you can out perform them.
- 6yJoseph CacciapagliaBusiness MemberLender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
@Luke Carl I'm curious why you exclude professional managers from your competition. Are you assuming that you can't compete with them, or that they'll be doing a poor job? If it's the latter, I think this is a poor assumption. Our STR team outperforms most self managers in the area by a wide margin. I think it's best to compare yourself to the best competition in your market, regardless of how they are managed.
- 6yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Originally posted by @Joseph Cacciapaglia:
@Luke Carl I'm curious why you exclude professional managers from your competition. Are you assuming that you can't compete with them, or that they'll be doing a poor job? If it's the latter, I think this is a poor assumption. Our STR team outperforms most self managers in the area by a wide margin. I think it's best to compare yourself to the best competition in your market, regardless of how they are managed.
I know the answer.
Because I , Lucas and many other individuals can out perform any PM.
No one has a bigger incentive than to do the best that can be done than a motivated owner.
Does you PM answer inquiries at 10PM? We do. Does your PM answer inquiries in minutes ahead of all the other properties they manage? We do as we only manage our own properties.
Does your PM answer inquiries on Sunday? We do.
Does your PM constantly monitor competition to be better than everyone else and represent only your best interest? We do
I could go on, but I think your get the idea.
- Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes6y
- 6yJoseph CacciapagliaBusiness MemberLender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
Originally posted by @John Underwood:
Originally posted by @Joseph Cacciapaglia:
@Luke Carl I'm curious why you exclude professional managers from your competition. Are you assuming that you can't compete with them, or that they'll be doing a poor job? If it's the latter, I think this is a poor assumption. Our STR team outperforms most self managers in the area by a wide margin. I think it's best to compare yourself to the best competition in your market, regardless of how they are managed.
I know the answer.
Because I , Lucas and many other individuals can out perform any PM.
Know one has a bigger incentive than to do the best that can be done than a motivated owner.
Does you PM answer inquiries at 10PM? We do. Does your PM answer inquiries in minutes ahead of all the other properties they manage? We do as we only manage our own properties.
Does your PM answer inquiries on Sunday? We do.
Does your PM constantly monitor competition to be better than everyone else and represent only your best interest? We do
I could go on, but I think your get the idea.
Yes to all of those questions, and instead of an individual, we have a team committed to doing these things. I realize that there are some wonderful committed owners out there, but there are also some amazing PMs. It may not be all of them, but they exist. There are real benefits to hitting economies of scale when it comes to running STRs. This includes having team members that specialize in each specific part of the process, spotting macro trends quicker, and buying consumables, furniture, and other services in bulk. I'm not saying a great PM will outperform every owner/operator, but from what I've seen they out perform the vast majority in my market.
Don't get me wrong, there are plenty of terrible PMs out there as well. I just think it's a little naive to discount all the properties that are run by PMs. It's best to just look at the best competition as a whole.
- Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes6y
@Joseph Cacciapaglia off topic. Perhaps start a new thread on that subject. :)
- 6yJoseph CacciapagliaBusiness MemberLender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
Originally posted by @Luke Carl:
@Joseph Cacciapaglia off topic. Perhaps start a new thread on that subject. :)
Sorry. I was asking you a specific question about your post, and then just replying to an answer to that question. I'm truly curious your reasoning for rule #1.
- Rental Property Investor · Temecula, CA · Member since 2020 · 128 posts · 55 votes6y
@John Underwood it’s really not always true. I think generally it is though, I’ll give you that. I’ve spoke to Lucas and ended up agreeing that in my particular circumstances - there wouldn’t be enough of a financial increase to outweigh the additional labor (Albeit as small as it would be).
But generally yes, I personally have seen people (just spoke to one today) that took over a property doing 40k with a PM and going to 83k.
- Rental Property Investor · Philadelphia, PA · Member since 2016 · 540 posts · 714 votes6y
Originally posted by @Luke Carl:
YOUR ENEMY: To be found on AirBnB with the following qualifications...
1. MUST be Stelf-Managed. If they're using a PM they are NOT competition. In order to make sure.... click on their picture and open up their profile. If they're managing 47 properties... They are not self managing and they do not qualify as an Enemy. NOTE! Many PMs will use a profile picture from a happy couple to make it look like the property is self managed.
2. Must be close to your property.
Will depend on the market. Could be anything from one block to 100 miles.3. Must have a LOT of reviews.
100+ reviews is ideal. Thats how you know they're good at their job and they've been around for a while.4. Must have same square feet and sleeping capacity.
Number of bedrooms is not as important as sleeping capacityThere is no exception to Rule #1
If necessary, you can make exceptions to rules 2 through 4.Find your Enemy, (2 Enemies would be ideal but not necessary).... go to their listing as if you are a guest... Click around and find out what they're charging. Spend some time obsessing and you can pretty quickly estimate how much money you can make if you manage the property properly.
Your Enemy can also be used for:
Price Per Night
Housekeeping Fee
Minimum night stay
Extra fee per guest over X number of guests
Pet friendly?
House Rules
Etc.The moral of the story is... Find someone who is very good at what you want to be doing, and learn from them.
This is the STR version of seeing what similar properties rent for on ZIllow.
Please click the VOTE button! Thanks for looking :)
Excellent post! This is exactly what I do. I find a few comparable properties on Airbnb in each location I’m prospecting & pay my offshore assistants to track these properties every day for the next few months & record how much $$ they’re making. I trust my assistants way more than i trust mashvisor or airdna!
And if anyone were to ever use my properties as their enemy properties, they’d end up doing quite well. Because I’m stayin fully booked, even with all this mess goin on
- 6yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
Originally posted by @Joseph Cacciapaglia:
Originally posted by @John Underwood:
Originally posted by @Joseph Cacciapaglia:
@Luke Carl I'm curious why you exclude professional managers from your competition. Are you assuming that you can't compete with them, or that they'll be doing a poor job? If it's the latter, I think this is a poor assumption. Our STR team outperforms most self managers in the area by a wide margin. I think it's best to compare yourself to the best competition in your market, regardless of how they are managed.
I know the answer.
Because I , Lucas and many other individuals can out perform any PM.
Know one has a bigger incentive than to do the best that can be done than a motivated owner.
Does you PM answer inquiries at 10PM? We do. Does your PM answer inquiries in minutes ahead of all the other properties they manage? We do as we only manage our own properties.
Does your PM answer inquiries on Sunday? We do.
Does your PM constantly monitor competition to be better than everyone else and represent only your best interest? We do
I could go on, but I think your get the idea.
Yes to all of those questions, and instead of an individual, we have a team committed to doing these things. I realize that there are some wonderful committed owners out there, but there are also some amazing PMs. It may not be all of them, but they exist. There are real benefits to hitting economies of scale when it comes to running STRs. This includes having team members that specialize in each specific part of the process, spotting macro trends quicker, and buying consumables, furniture, and other services in bulk. I'm not saying a great PM will outperform every owner/operator, but from what I've seen they out perform the vast majority in my market.
Don't get me wrong, there are plenty of terrible PMs out there as well. I just think it's a little naive to discount all the properties that are run by PMs. It's best to just look at the best competition as a whole.
I don't doubt what you are saying.
A PM with many properties can't or shouldn't put one property above all others. So when a potential renter comes in and you were managing my property. You wouldn't be able to always book mine first above all other properties.
When I get a call I book my property above all others 100% of the time.
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes6y
Does a PM cash $25,000 worth of tenants paychecks every week? I have.
Does a PM pick up a tenant from work and take them to a doctor for an emergency procedure? I have.
Does a PM check on a tenant that didn't show up for work and find him unconscious and unresponsive and call EMS? I have.
Does a PM give jumpstarts and fix flat tires? I do.
Does a PM invite better tenants to their own house to shoot guns, drink beer and have dinner? I do.
- Rental Property Investor · Member since 2019 · 276 posts · 235 votes6y
This is great @Lucas Carl. We did this with spreadsheets on all the places we made offers on. Now my “enemy” is also my new next door neighbor and friend since we’ve connected via text. Haha.
- Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes6y
@Leora Merrell you did it exactly right!
- Real Estate Broker · Columbus, OH · Member since 2016 · 181 posts · 244 votes6y
Great post @Luke Carl ! This is nearly exactly what I do for my PM company every time any owner calls us to inquire about us managing their property. We typically run a 4 page report that has all data from 3 of the closes comps (ENEMIES), and also larger market data for the neighborhood and then the city as a whole.
The problem we run into is that Airbnb only lets you see so much information when you are looking at another owners listing as a guest.
What would you say about a property that lists on multiple platforms, or takes direct bookings? Do you also search and scrape data from their Vrbo listing, Booking.com listing, and info from their own direct booking site? Or how do you account for all blocked off dates as assuming they are "booked at the same Airbnb rate"?
What do you do to account for dates that the owners have blocked of the calendar for themselves or for their friends to use it? What do you do to your revenue predictions to account for that?
What do you do to revenue predictions to account for the fact that some owners don't set prices high enough to the market rate, or set them to high and don't get booked as much? (do you see that their rates are to low or high, and move on to find another ENEMY?, or do you just make a percentage adjustment to your predictions?
Some Airbnb listings have a setting where the house is blocked off a night or 2 before or after each booking (some hosts do this to help properly prepare the house for the next guests). How do you see if they are using this setting? And how do you account for this possibility? When trying to predict the number of sold nights? this could really throw off your predictions if you counted those as all sold nights when they were not).
Do you make any adjustments up or down if you really bad or really good reviews? Like if a property has a long string of 3 or 4 star reviews mention bad cleaning, do you make any adjustments to assume that they house would make more if it had a better cleaning crew? (or do you move on to find a better ENEMY?).
Thank you for sharing!
- Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes6y
You've got exellent questions... I've got answers.
Originally posted by @Benjamin Vail:Great post @Luke Carl ! This is nearly exactly what I do for my PM company every time any owner calls us to inquire about us managing their property. We typically run a 4 page report that has all data from 3 of the closes comps (ENEMIES), and also larger market data for the neighborhood and then the city as a whole.
The problem we run into is that Airbnb only lets you see so much information when you are looking at another owners listing as a guest.
1. What would you say about a property that lists on multiple platforms, or takes direct bookings? Do you also search and scrape data from their Vrbo listing, Booking.com listing, and info from their own direct booking site? Or how do you account for all blocked off dates as assuming they are "booked at the same Airbnb rate"?
I use Airbnb.com because for me, this is the most user friendly sight. Prices should not be different across multiple platforms and if they are they amount will be negligible.
2. What do you do to account for dates that the owners have blocked of the calendar for themselves or for their friends to use it? What do you do to your revenue predictions to account for that?
An owner that is blocking multiple dates per year will likely not qualify as an enemy due to the number of reviews. This host is likely not too worried about cash flow and since they are owner occupying it will take them much longer to accumulate the 100 reviews we're looking for as an Enemy.
3. What do you do to revenue predictions to account for the fact that some owners don't set prices high enough to the market rate, or set them to high and don't get booked as much? (do you see that their rates are to low or high, and move on to find another ENEMY?, or do you just make a percentage adjustment to your predictions?
I determine this by the amount of blocked off dates on their calendar. For instance... If I were to be looking for an Enemy on today's date (virus aside)... I would want to see a calendar that is fully booked through the end of April, and most certainly a 4th of July that is NOT booked. Based on today's date, I want to see a sweet spot of a Late May booking for the 4th of July. If it books prior to that, price was too low. If it's not booked by then... price is too high; lower it. Much of this statement will vary depending upon your market.
4. Some Airbnb listings have a setting where the house is blocked off a night or 2 before or after each booking (some hosts do this to help properly prepare the house for the next guests). How do you see if they are using this setting? And how do you account for this possibility? When trying to predict the number of sold nights? this could really throw off your predictions if you counted those as all sold nights when they were not).
I have never seen that in my market, which is arguably the number one STR market in the world. I would have to adjust accordingly if I were in a market that does such a thing. But I don't believe I'd want to be in a market that wastes 2-4 nights per booking. That just seems ridiculous. Get yourself a new housekeeper that can prepare the house in hours, not days.
5. Do you make any adjustments up or down if you really bad or really good reviews? Like if a property has a long string of 3 or 4 star reviews mention bad cleaning, do you make any adjustments to assume that they house would make more if it had a better cleaning crew? (or do you move on to find a better ENEMY?).
Excellent question! I suppose I could make an amendment to rule number 3 and say that the Enemy must have a 4.7 ranking or higher. I just assume that anyone operating at a high level with triple digits worth of reviews is GOING to have a high average review. It is difficult to get to triple digits if you're consistently receiving 3 or 4 star reviews.
Thank you for sharing!
In summary... Study ALL of the self managers in your market and you'll quickly figure out who is the most qualified Enemy!
Thanks for the excellent questions bud you really added a lot to the thread! Hope I helped!
- Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes6y
@Lucas Carl or go to AirDNA
- Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes6y
Originally posted by @Karen Margrave:
@Lucas Carl or go to AirDNA
AirDNA Mashvisor the obvious, and helpful. But too broad of a data scrape. Not as reliable or accurate as the above method.
- 6yJoe PrillamanPro MemberRental Property Investor · Carolina Beach, NC · Member since 2017 · 441 posts · 462 votes
@Lucas Carl, such a great post. It amazes me how many people don’t go out and find the top performers in their market and study them! Thanks for sharing.
- Real Estate Investor · Philadephia, PA · Member since 2016 · 214 posts · 36 votes6y
@Luke Carl All valid and good points, just curious of the economics of scale part. In order to provide this outperform service for STR, how many units can you most have to justify your time/effort? In this case, we may need a good PM or build PM system to let other ones to do the real things?
- Property Manager · Aurora, CO · Member since 2014 · 221 posts · 210 votes6y
Originally posted by @Benjamin Vail:
Great post @Luke Carl ! This is nearly exactly what I do for my PM company every time any owner calls us to inquire about us managing their property. We typically run a 4 page report that has all data from 3 of the closes comps (ENEMIES), and also larger market data for the neighborhood and then the city as a whole.
Thanks for the post @Lucas Carl, very interesting read & comments from all.
Benjamin I'm curious about the "competitor" report you mentioned in your post. Can you share an example and how you did the research to compile such a report? Thanks! - Realtor · Pigeon Forge, TN · Member since 2018 · 230 posts · 111 votes6y
Not everyone needs to be so aggressive with their strategies for making the most from their STR and Vacation homes. List Price is very important but so are tons of other factors. I recommend reading Daniel Rusteen's book "Optimize Your BNB" and learn how to be an awesome HOST. Strategies for House Rules, Pet friendly, Housekeeping as well as pricing strategies are all discussed and this book offers sound recommendations.
Also no need to be so hateful toward Property Managers - It's your choice not to use one. Shouldn't try to bully other investors that YOUR WAY is the only way!
My mom @Rhonda Blue has used a PM for her properties in Huntsville Alabama successfully for over 6 years now. She self manages her STR in TN! As do I.
Live your happy life!
- 6yCliff H.Pro MemberRental Property Investor · Nashua, NH · Member since 2014 · 587 posts · 477 votes
Grays post man. I never knew I had enemies until I read this post! So maybe the PM-managed properties are “frenemies?”
Very succinctly summarizes many of the techniques I use myself when evaluating properties, the most critical of which is filtering out those listings of $1k/night from the owner that just rents out their unit 3-5x/year and blocks it off as unavailable the other 300 days/year. Not an enemy! - Rental Property Investor · Stewartsville, NJ · Member since 2016 · 418 posts · 280 votes6y
We do something similar, but have some tweaks for the method that we use.
- Since it can be hard to determine who is using a PM and who isn't, we only focus on properties that are similar (same # of bedrooms, general same square footage, same amenities, same proximity to attractions).
- We list the competitor properties down the rows in a spreadsheet. We list the months across the top.
- We then check out the rates by month for each competitor by month since they can vary so much since some properties have spikes during the summer for beach/lake areas, or winter for ski areas, or October for leaf-peeping, etc.
- We then sum up the 12 months and you quickly end-up with a range of what you can expect to make.
After we make our spreadsheet, we then buy the AirDNA data to see how close it is. With the AIrDNA data and your own data, that should give you some pretty good confidence in at least the revenue side of your spreadsheet forecast for the property.Mike
- Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes5y
I made a video on this topic. Please check it out! The Enemy Method
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes5y
Originally posted by @Luke Carl:
I made a video on this topic. Please check it out! The Enemy Method
You look like a young Ric Ocasek. Do you have anything to do with music?
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