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All Forum Posts by: Collin Hays

Collin Hays has started 119 posts and replied 2499 times.

Post: STR- Short term rental investors in Maui Hawaii what’s your plan?

Collin Hays
#2 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,535
  • Votes 3,534

"Pivot" has to be the word of the year!  I hear it everywhere!

Post: Second home purchase

Collin Hays
#2 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,535
  • Votes 3,534

I hate to discourage someone from taking the plunge because they are spending all of their savings. Probably most of us got started that way - taking a massive gamble.  I know I did.  Do your homework and if you think the numbers work comfortably, go for it.  Keep in mind that vacation homes are subject to wild price fluctuation.  I bought a property right before the financial crisis in 2005 and its value dropped 40%.  But I kept renting it and it's paid for itself a couple of times.  Yet if I was in a bind and had to sell it in 2010, I would have taken a huge hit.

So...make sure your gird is sufficient for water to be up to your fetlocks, and you should be fine.

Post: Smokies Advice- Age & BRs

Collin Hays
#2 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,535
  • Votes 3,534
Originally posted by @Justin Anderson:

I can definitely speak to this one...

I own 4 cabins - 2 1BRs, a 7 BR and an 8 BR.  Three of these were bought from @Avery Carl who is awesome and will steer you right.  I hope/expect to buy another couple this year, too.

1. Age of the cabin isn't a huge factor in booking and probably less important than a normal SFH or LTR in your home town. People look for the amenities, the reviews, the location and the price. Age of the cabin isn't on the listing and people won't even know. As with any new construction, you'll have a year of shakeout where you find things that aren't quite right -- a plumbing leak, a window seal, etc. But at the same time you'll have all new big ticket items - AC, water heater, roof, stain, etc. Older cabins will have had time to settle and any foundation issues should be easy to spot which is a bonus. New cabins should have a builder warranty. In my mind it's a bit of a wash, all things being equal. (I'd just be careful getting cabins that can feel really dated like some of the ugly A frames in Gatlinburg, the heart shaped jacuzzi tubs, etc)

2. A real estate mentor of mine told me that I should go for the biggest cabin I could afford, so that's what made me start with a 7BR. That cabin should see upwards of 130k this year and product $3700/m in cash flow, even with the down 6ish weeks of COVID. My 1BR cabins will both see around 45k and throw off is around $1200/m after all expenses. If you factor in big expenses that didn't hit the small ones, the large cabins should have a better COC return over time.

As for bookings...

I average over 90% occupancy year round across all the cabins I own/manage.  Jan/Feb are slow but the rest of the year is generally ok.  During peak COVID I was still up around 75% booked while the area was under 10% booked for over 6 weeks.  (I've written programs to do data analysis of the local cabin mgmt companies as well as airbnb/vrbo so I can data mine it)

I never, ever worry about my small cabins being booked.  Even up to 3 and 4 BR you will book very well for families that want a weekend getaway.  Big cabins tend to book further in advance and definitely felt the downturn more than the small ones.  But it's so nice to get a 9k Christmas week booking in July...

That said, my booty is always puckered on checkout day for the big cabins wondering what sort of mess the guests left. While the smaller cabins can also get messy, a couple or family rarely trashes the place like a group of 5 families sharing a place.    If you're paying a PM it doesn't matter MUCH, but every now and then expect a bill when an oven door gets ripped off (2 months ago) or something similar.


Regarding PMs, I've worked with two local companies that charged 25/30%.  One fired me as a client when I was booking more stays than they were (and not paying their commission, of course).  The other I fired after I purchased because I could do better than the 90k in bookings they already had for the year.

While you can definitely manage yourself, PMs can do a better job for a few things:  on the ground help for guests (removing you from phone calls), setting pricing (maximizing your earnings) and maintaining your investment (keeping it in top shape).  Since this is your investment, be sure to get regular updates and stay on top of it.

Let me share you an example from a client I just brought on board this week.  He has a beautiful new 3BR cabin in Gatlinburg. From Jan 1-May 31 he brought in $8,000 in bookings using Evolve Vacation Rentals.  Both of my 1BR cabins brought in $9,000 in bookings during that same time frame.  Evolve wasn't squeaking out every dollar for FIVE MONTHS of bookings because they're a big company and don't take a personal interest.   Be sure to ask those hard questions should you go the PM route.

Happy to geek out about this stuff if you have questions.  I know Luke is happy to share all the specifics on the self-managed side, too.

Regarding the topic of booking your property yourself in tandem with your PM, we would have fired you, too!  Haha.  "Too many cooks in the kitchen".  It is challenge enough to keep up with our own reservations - guest correspondence, payments, chargebacks, calendars, emails.  Sharing these responsibilities intermittently with the homeowner is a recipe for frustration and embarrassment for all parties.  

If our clients want to micromanage, I steer them to self-manage.  It's not dissimilar to other investments.  In the stock market, if you are an active investor/trader, get yourself a low/no commission account and have at it.  If you want someone else to do the work, hire an investment pro or invest in a good mutual fund. If you hire an investment pro, you can't call him/her every day with your own suggestions on when/what to buy & sell.

My mother decided to buy a couple of STRs in the Smokies for income, and wanted our management co. to run them.  Knowing she is the very definition of micromanager, I told her "Mom, I'll do it, but only on the condition that you don't call me for every expense that you see on your statement.  Consider the investments a mutual fund and enjoy the income."  So far, so good!  :)

Post: Smokies Advice- Age & BRs

Collin Hays
#2 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,535
  • Votes 3,534

I forgot to add, PMs are all over the board. Many will quote you 15%, but rest assured they are completely hosing you in such an arrangement and you won’t even know it.

My best advice on PMs is to ask for a LIST (not one or two stooges) of homeowner client references.  If they can’t supply that, you know all you need to know.

Avoid those requiring some silly “contract”.  Only the poor PMs feel the need to lock you in.  Any reputable business allows customers to do something different at any time, for any reason, or no reason at all.  If I don’t like McDonald’s, I should be able to switch to Wendy’s the next day, just because I want to.

Post: Smokies Advice- Age & BRs

Collin Hays
#2 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,535
  • Votes 3,534

The Carls would be my go-to for a lot of these questions, but...

Yes, a brand new cabin is attractive to many renters.  All other things being equal - view, amenties, location - yes it should rent for more and more often.

Building in the smokies - hmmm.  I did it and it was a nightmare.  I only recommend it if you hire a babysitter for the contractor.  It took me almost 18 months to get a cabin built there and I swore I’d never attempt it again.

That being said, I was in it for $330K furnished and it has done $60 a year since, and it’s easily worth $500K or more now due to its unique location, so I came out ok.

But...you are far better off finding an existing home!

Post: Best Video Cameras for STR

Collin Hays
#2 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,535
  • Votes 3,534

Are you video-ing guests in your house?  I don't think you can do that...

Post: So.... Is "Catfished" The Right Word?

Collin Hays
#2 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,535
  • Votes 3,534

We have had an unusually large volume of these types this year.  Several no-shows claiming credit card fraud etc.  crazy.

Post: Fractional Ownership at the New Jersey Shore

Collin Hays
#2 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,535
  • Votes 3,534

There are always folks eager to sign up for time shares.  Why, I don't know.

Post: Self-Employment Taxes (Medicare and Social Security Taxes)

Collin Hays
#2 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,535
  • Votes 3,534

If you start running MC for your guests' karaoke party, you've got to pay SE tax.  

Post: Did I get ripped off by my contractor?

Collin Hays
#2 Short-Term & Vacation Rental Discussions Contributor
Posted
  • Property Manager
  • Gatlinburg, TN
  • Posts 2,535
  • Votes 3,534
Originally posted by @Paul Sandhu:
Originally posted by @Collin Hays:
Originally posted by @Paul Sandhu:

In my market, you got raped without a reacharound on the shingles.  I can not comment on the bricks, don't have any knowledge.  

I heard this phrase on the satellite radio that @Luke Carl can be heard on.  I'm going to try and phrase it so this post won't be deleted.  "If you fork someone in the as.  You're going to get shirt on your dirk."

 reach around?

There is a song or a band called Reach Around.  It's where a guy gets it from another guy and the guy from behind reaches around to do what you think he is going to do.

nominated for POY.