All Forum Posts by: Alex S.

Agree with Ryan and Avery. Buy the house next-door and turn it into an STR...unless this one has a permit that can't be acquired.

In any case, the appraiser will use comps unless it is a commercially zoned bed & breakfast type of situation...which would not be eligible for a residential mortgage.

I would call the city's planning division and talk to a real human about your concerns.  Ordinances are constantly change, every area/zone can be different and the legal speak can be tough to crack.

I have started calling and talking to them before I proceed with a STR purchase.

Hospitable.com has a feature called "Stealth Mode."  It removes your listing during normal government hours and then puts it back on all the sites after 5pm (city enforcers go home for the day and normal people start booking).  I'm just saying...that exists.

STR regulation is in-progress or possible in every single community in America. It is a significant risk, but also not deadly if you buy right. Just turn it into a LTR or sell it.

As to your first question...assuming we are talking about residential houses for STR, the bank doesn't care about that. A commercial loan might.

@Joseph Goode I have a few STRs in the Metro East of St Louis.

You are right that there are broadly TWO STR markets:

1. Vacation Hot-Spots

2. Hotel/Motel market

PCB, Great Smokies, Disney, etc...incredible vacation hot-spots and lots of opportunity for STR, but you will have significant competition and you should be careful about buying too high. I doubt you'll lose your shirt, but you might not see >20% Cash on Cash returns if you aren't careful. Just like any RE investment...run the numbers, put a dollar sign on any concerns and make a decision. Lots of people on here know way more about these markets than me.

An often overlooked STR market (not as sexy) is the hotel/motel market. Any mid-sized (>10-20K people) town in middle America with chain hotels present already (Hilton Garden Inn, Fairfield Inn by Marriott, etc) has significant STR demand. Many times, there is little to no competition...or the competition consists of Uncle Billy renting out a twin mattress on the floor of his bedroom, dark creepy photos, and 3 reviews averaging 2.6 stars.

It'll be super easy to find a place that cash flows, but regulation is a real risk here.

Here's the thing, while risk is certainly present on any REI...I would suggest that it is actually fairly low. Worst case, your STR gets outlawed and you switch to lower returns on LTR/MTR OR you just sell the place.

@Ryan Moyer takes the cake.  Those rooms are incredible!

People are constantly asking on this forum some version of "how much will I make?"  These are great examples of why the answer is always "it depends."  I'd pay a lot more for a Star Wars room with a slide than a nice/normal/clean house when traveling with kids.

Keep the kid/family ideas coming.

To all the STR hosts out there...

What do you do to cater to families and kids?  I found this incredible AirBnB in Scottsdale, AZ from a RE investor that I follow on Twitter:

This is the backyard of a neighborhood 4bd/4ba home...the home is also incredible.  ~$1,000/night + $900 cleaning fee.  This might be over-the-top, but what creative things have you done to attract more families and less drunk adults? :)

I'd love to get rid of the AirBnB cut, but every time I book a guest off-platform it wrecks my systems.  I have automated messaging and guest reminders and booking details, etc, etc.  When I let someone stay via text message, all that stuff is useless and I end up wasting a bunch of time re-inventing the catered experience that I've built through platforms like AirBnB/VRBO.

I think it is a worthy cause to move some of your bookings to your own website, but only after you've built the business systems to handle the shift.

I think the old "it depends" applies here.  Not all 4bd/4ba houses are the same.

I have researched the Park City market a lot lately and, as usual in STR, you should check city zoning first to see if STRs are allowed in that neighborhood. I think Jan/Feb/Mar is bonkers in Park City, but Apr/May and Sep-Nov are very slow and you should expect lower occupancy and lower prices.

Nice!

The book is on the way, thanks guys!

@Jason Stoltzfus to give one data point...what did that lawyer cost for a 3-mbr LLC operating agreement?