How Long to Ramp Up?

Question

Hello BP Members,

I’m under contract on a 3-unit property in downtown St. Augustine, FL. I’ll be living in one of the units and renting the other two but can’t decide if I should rent the other units short-term or long-term. The numbers pencil out in favor of short-term renting but I’m curious to know how long it typically takes to ramp up a short-term rental. I’m sure we could have the units rented long-term in a matter of days/weeks as they’re in a great location with a strong demand. We don’t want to a long time to eclipse what we could have been doing all along as a long-term rental.

Is there anyone on the forums that could share their experience with getting a new short-term rental off the ground? It would be even better if you have numbers to illustrate your growth over time.

Thanks!

Chris

Chris Mury · Answer

THANK YOU! This is exactly the answer I needed. I’ll definitely shoot you a PM if I hit any roadblocks. Thanks, Benjamin!

Chris Mury · Answer

Thanks, Rachel! We definitely looked at many properties and made many offers before getting this one under contract.

I’m asking more about question #2, how long to ramp up to full revenue, so you’ve given me a great answer! Thank you!

Chris Mury · Answer

Thanks, Paul!

Chris Mury · Answer

Thanks, Mark!

Benjamin Vail · Answer

From the day you make the listing active, if you follow recommendations on settings, and guidelines, you should see these number:

- first 30 days = 50% - 75% of optimum expected revenue

- second 30 day = 75% - 90% of optimum expected revenue.

- by 3rd month you will be at optimal.

At first, only open a month of dates, and set you maximum night stays at like 1 - 3. You want shorter stays to begin with, because you are in a race to get 3 good reviews on your listing. Add the20% discount Airbnb offers, and raise your rates 20% - 30% higher than what you expect. Go out of your way to blow the socks off your first 3 guests with your service. After a few weeks (or after you have 3 good reviews), open the rest of your calendar at normal/high rates. Be sure to set weekend mush higher than weeknights. If you need any help, PM me. - good luck!

Rachel Hughes · Answer

Sounds like you're in an awesome position. I wish I could find a well-located 3-unit property in my market. My husband and I had to fight tooth-and-nail to acquire both of our 2-unit properties.

Not sure if you're asking...

1) How long it takes to set up a STR in terms of getting it furnished/stocked or..

2) How long it takes for a STR to realize it's full revenue potential (given whatever seasonality occurs in your market)

If 1) - It took me about 1 month to setup and furnish each of my 3bed/1bath Airbnbs. This is me working basically all day everyday with little to no help. I also have a 200 sq. ft. studio that only took me about 2 weeks.

If 2) - This is probably very market specific. I am in a metro market and exclusively list on Airbnb. In my experience, my 1st month revenue is about half what it should be. This is mainly due to intial discounts (20% of for first 3 guests), having to cancel reservations because of unexpected repairs, and less bookings since you don't have any reviews. Once a listing has 3 positive reviews it is smooth sailing (on Airbnb, in my market).

Paul Sandhu · Answer

3-4 weeks from when we are given the keys.  About a week for repairs.  2 or 3 Saturdays going to estate auctions for furniture and appliances.  We can give it the turbo treatment if we know someone wants it in a few days.

Mark Futalan · Answer

@Chris Mury

It took me a good 2-3 months to set up my properties (light remodel, paint, furnishing, professional photos etc) but then again, I did this on weekends driving up from LA. You have a good advantage if you living in one of the units. The quicker you can get set up and go live, the better as people tend to plan out their days with the next 1-3 months. The pandemic has changed things a bit but I’ve seen demand pick up heavily in our area.

Chris Mury · Answer

Good advice, Brian, thanks. We’re thinking about doing just that.

Chris Mury · Answer

Thanks, Karl. We’re definitely hitting the tail end of the busy season by the time we close on the property. You’ve given me a few things to think about. I appreciate it.