is AVL outskirts oversaturated with STR's?
Hello,
I'm interested in "boots on the ground" sense of market conditions in AVL outskirts - Black Mountain, Swannanoa, Mars Hill, etc...for STR investment. From afar, I can seed there's been huge growth recently. Is it starting to feel oversaturated or soon to be oversaturated? It's a 9 hour drive for me, so hoping to hear some local insight prior to making the trip. Also would love to connect with local contractor as I generally like to build from scratch. Thank you in advance for any local insights on all of the above!
I feel like that’s definitely a question going around a lot these days. And my honest answer is, I don’t know. (Anyone who tells you they “know” definitely really isn’t being truthful)
I think there is a big caveat here. Homes that are unique (big views, creek side, great backyards & amenities) will continue to rent well. And in an ideal world, those that don’t rent well, will get off Airbnb in the next year or two and the cream will rise to the top. I would definitely stick to either an Uber ride to Asheville (20 minutes or less) or a cabin/unique home with a mountain feel. The generic homes won’t keep cutting it for long as the money is spread across a lot more Airbnb’s than there used to be.
In Short No it’s not.
I feel like this is a question for so many markets and it depends. In comparison to markets like Sevierville and Panama City Beach we are no where near saturated.
The most important thing is to stand out from your competition. This isn’t as easy as build it and they will come. You need good location, decor, amenities, and customer service. That is still very easy here.
I have been telling people lately that yes there is on average a 30% increase in STRs over the US. That’s a lot. But many of these hosts think it’s instant easy money and they don’t put in the effort. Give it time and 20% of those people will quit. You have to be a professional host which isn’t hard.
We have a home we manage in Fairview and Black Mountain and they are the perfect example. Our Fairview house we spent most of our budget on amenities and extras and ran out on the decor so our decor is basic and in some rooms unfinished but our guests never notice. They come and always say we have everything they could want and more and have so much fun.
Our other property the client spent all of the budget on decor and very little on amenities. The house is gorgeous and it definitely draws customers but in the long run they don’t have much to do. It’s a nice house. When I go on vacation I want to be close to a fun area but also have fun at the house. Luckily the client has spent some money on amenities and is improving
There has been an increase in homes, many are just homes with furniture, some are homes with beautiful decor and nothing to do, the ones that perform the best are also the fewest, good location, decor, and amenities. So if you plan on doing it right you don’t have alot of competition. But if you want to just be another basic house yes it’s over saturated.
If you want advise on location, running numbers, a specific property, what amenities to provide, cleaners, contractors, really any questions whatsoever just give us a call. We had some great mentors that helped us get started so we love helping others.
And that is just the outskirts of Asheville. Western NC has so many amazing markets to work in. I wouldn’t sweat it.
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Quote from @Josh Myrick:
In Short No it’s not.
I feel like this is a question for so many markets and it depends. In comparison to markets like Sevierville and Panama City Beach we are no where near saturated.
The most important thing is to stand out from your competition. This isn’t as easy as build it and they will come. You need good location, decor, amenities, and customer service. That is still very easy here.
I have been telling people lately that yes there is on average a 30% increase in STRs over the US. That’s a lot. But many of these hosts think it’s instant easy money and they don’t put in the effort. Give it time and 20% of those people will quit. You have to be a professional host which isn’t hard.We have a home we manage in Fairview and Black Mountain and they are the perfect example. Our Fairview house we spent most of our budget on amenities and extras and ran out on the decor so our decor is basic and in some rooms unfinished but our guests never notice. They come and always say we have everything they could want and more and have so much fun.
Our other property the client spent all of the budget on decor and very little on amenities. The house is gorgeous and it definitely draws customers but in the long run they don’t have much to do. It’s a nice house. When I go on vacation I want to be close to a fun area but also have fun at the house. Luckily the client has spent some money on amenities and is improvingThere has been an increase in homes, many are just homes with furniture, some are homes with beautiful decor and nothing to do, the ones that perform the best are also the fewest, good location, decor, and amenities. So if you plan on doing it right you don’t have alot of competition. But if you want to just be another basic house yes it’s over saturated.
If you want advise on location, running numbers, a specific property, what amenities to provide, cleaners, contractors, really any questions whatsoever just give us a call. We had some great mentors that helped us get started so we love helping others.
Josh, while the Emerald Coast is full of STRs, that is what drives 95% of our economy, and we are STILL five years behind construction here in PCB/Destin/Forgotten Coast. There isn't a wrong time to buy here. I completely agree that you must work towards your business, and your numbers aren't off in this area. If anyone would like to discuss that, hit me up via IM!
In my experience, @Abigail Gibson's recommendation of 20 minutes from downtown Asheville is solid (for the Asheville market). In many ways Maggie Valley / Waynesville is it's own market, but still a good one if that's where you want to invest. Each of the sub-markets around Asheville are unique in terms of attractions and restrictions (there's plenty of discussion on BP regarding the recent restrictions in Woodfin).
I'd be happy to talk more about specific sub-markets, just send me a DM.
Especially if you can build from scratch, go for something unique if you intend it to be an STR for the long-haul. The Asheville market has been a vacation home / second home market for a long time and I wouldn't expect this to change anytime soon. Make sure you are dedicated to operating a top-notch business as well (achieving superhost status, etc.). Investors tend to get caught-up on the acquisition, but I'm convinced that operations is the key to being profitable.
@Bryan H.. What @Abigail Gibson and @Josh Myrick have said above is pretty sage. I totally agree. Our markets here will continue to be amazing for STR, especially when you consider seasonality and such, but increasingly only for those that want to work really hard at it, and keep working at it. If you haven't read Atomic Habits, perhaps take a gander at the opening story about the British Cycling team. They turned the course of history by continuously looking for 1% improvement opportunities. If you'll commit to such an approach, rather than "set it and forget it" or autopilot, you'll likely have a bright future here or in other markets.
That said, because I see how many people's STR's really do (when working on their loans), I'd increase Abby's distance to 45 minutes. You can do really well in Mars Hill, Lake Lure, Brevard, Waynesville, etc. If it was me, I'd still try to be no more than 15 minutes from a small downtown, and a great one, so that guests have a downtown really nearby, for times when they don't want to drive over to Asheville.
Please reach out if you need more feedback.
AND...if you'll be in town on 1/18 or 1/25, we'd love to see you at a BP meetup. Same if you'll be here in early February.
GREAT BOOK! I should be able to go the 18th. Finally found a babysitter for all three kids.
Quote from @Mitch Davidson:
@Bryan H.. What @Abigail Gibson and @Josh Myrick have said above is pretty sage. I totally agree. Our markets here will continue to be amazing for STR, especially when you consider seasonality and such, but increasingly only for those that want to work really hard at it, and keep working at it. If you haven't read Atomic Habits, perhaps take a gander at the opening story about the British Cycling team. They turned the course of history by continuously looking for 1% improvement opportunities. If you'll commit to such an approach, rather than "set it and forget it" or autopilot, you'll likely have a bright future here or in other markets.
That said, because I see how many people's STR's really do (when working on their loans), I'd increase Abby's distance to 45 minutes. You can do really well in Mars Hill, Lake Lure, Brevard, Waynesville, etc. If it was me, I'd still try to be no more than 15 minutes from a small downtown, and a great one, so that guests have a downtown really nearby, for times when they don't want to drive over to Asheville.Please reach out if you need more feedback.
AND...if you'll be in town on 1/18 or 1/25, we'd love to see you at a BP meetup. Same if you'll be here in early February.
@Mitch Davidson @Abigail Gibson @Josh Myrick @Christian Longacre
Thanks all for the very insightful and thorough responses to my question. Sorry for the delay in responding! All very encouraging and exactly in line with what I feel is a pretty narrowly targeted strategy. I'm super cautious by nature and do tons of research before I pull the trigger - to a fault really. Oh the deals I regret letting slip by! My current situation is good, yet I also feel like I can’t really afford to make a mistake. I currently have 3 super unique Airbnb's - two that I designed and built from scratch, and the other one is a super cool 1968 post-and-beam mid century style that I renovated. My goal is to always be in the top 5 Airbnb’s in my market. For me it’s as much about satisfying my creative drive as it is about increasing my income. Recently Condé Nast Traveler picked the “15 Best Airbnb’s in NC”(totally subjective of course) but super thrilled that two of them were mine! Mitch, the 1% improvement quote from Atomic Habits really resonates, and that’s exactly what I do. I’m always looking for ways to improve my Airbnbs compared to the competition, and I spend a lot of time looking at the competitions ideas and calendars and pricing etc… I see you’re a lender, and I’d definitely be interested to chat with you about optimal financing options for this project. Previously a career documentary filmmaker, these airbnb’s and a long term rental in DC (no mortgages) are now my only income.
So…I’ll be stepping out of my comfort zone on this one: a building project far away from home on mountain terrain, and then also managing from afar…
After building my last one, I decided that with all the effort and time that goes into a single unit, it would be just as easy and make more sense to build multiple units near or next to each other. I’ve been sporadically looking at land and houses on Zillow over the past year. I can see that there’s very few already-built houses that would be give me the competitive advantage that I’m looking for. Land-wise, northside outskirts of Swannanoa and Black Mountain seem ideal, but that’s just the only area I have a sense of (having visited), and I’m sure there are other areas I should consider. When I first started looking there were some parcels that may have been ideal, but I wasn’t quite ready. Now I’m not seeing anything! Typical right!
Josh, I don’t know if you’d be willing to share any insight or rough guidance into managing costs, cleaners, etc…on the outskirts of town? I need some kind of number to plug into my analysis spreadsheet, but my current location at the beach is not really comparable.
My best, and thanks again!
Hi @Bryan H.! If you're feeling like you can't afford to make a mistake and talking about taking-on a development project in another market, my first thought is that you've probably backed yourself into a corner unnecessarily. Could you brainstorm 3, 4, or 5 other ways to go about it?
I would be happy to help you run some numbers. Send me a text and we can schedule a phone call.
828-318-3181
@Bryan H.. If it was me, I wouldn't build. Perhaps I'd bring in a modular, but I wouldn't build. In our more local market, a custom build, including land development, will take well over a year. Down near Waynesville, Sylva, Maggie, or Bryson City, it'll take 3 years according to the guy that built my place. That's a ton of lost time. Instead, this Spring you'll likely see some properties that check most of the boxes, that can be made stand-out, etc. In many of the smaller/sub markets in the region you can make top 10 or top 5, having a place that's relatively similar to the top competitors, if you'll simply deliver awesome customer service and experience. I think you'd do better to buy now, start making money, and focus on kicking butt by communication, activities and features you add to the home, cleanliness, etc. Also, as you may have found previously, getting a construction to perm loan for an investment property is tough. Most lenders exited the new build business when Covid started. Some of us are just getting back into it. Most that are offering a new build product, however, are limiting it to primaries and seconds, some only to primaries. Happy to discuss more. Will message you.
Quote from @Christian Longacre:
Hi @Bryan H.! If you're feeling like you can't afford to make a mistake and talking about taking-on a development project in another market, my first thought is that you've probably backed yourself into a corner unnecessarily. Could you brainstorm 3, 4, or 5 other ways to go about it?
Hmmm, well I've arrived at this idea after much brainstorming, but interested to hear any thoughts you have about what you mean by other ways? One of the main reasons is, I need diversification from my local market - not having all my eggs in one basket. So being in another market is pretty much the main parameter. Since my success so far has come from having unique properties that outshine the competition, that almost eliminates the idea of buying a house in your area. Maybe if I keep looking and get really lucky to find something to work with...but seems unlikely. Definitely still open to that idea and if you find anything, please do send my way! Years ago I was fixated on acquiring a small to medium sized multi-unit property - read all the books, did a lot of searching, but I never found one, and honestly these days that seems almost impossible with so many people and pros in the game. But maybe I just have tunnel vision, I don't know...I think you almost have to have tunnel vision to get anything like this done.
