All Forum Posts by: Drew Macomber

@Mary S. - Yeah, I heard that Zaatari v Austin was still awaiting a verdict. Word was that it seemed to favor Zaatari, but who knows. But I thought it was at the highest level.

In regards to cases in Austin, just seems odd, as I have a few places over 6 people, and all my places are not permitted (obviously, as they can't be), and I've never heard a word. 
But how would they? Airbnb doesn't give them my address.

I have gotten lots of people with no reviews ask for an address and I give an area, and they don't book.

Who knows. I wouldn't pay a $2,000 fine if they charged it, and add to the lawsuit if it persisted. 

@Mary S. Do you have any source to show that Austin recently opened 800 cases? I'd love a link of this specific data point.

Also, what judgement are you referring to? I thought the first case is still awaiting a verdict (and the bill against cities banning STR has only been passed through one side of the house)? I'd love a link on that? Also, it was Texas Supreme Court... so what court did it appeal to?

Would love some info/links so I can stay up-to-date.

@Allen Carpenter If I allowed 1 night bookings I'd be booked 100% Feb - Oct. In Oct my places were booked 24 - 28 nights booked, and that's with a 3 night min. 

Nov - Jan is more like 70%+. But I lower my rates a lot for winter.

Airdna.co has been extremely accurate for me in Austin. 

Let me know if you have any questions, and feel free to message me.

@Michael Guzik To be clear, I've personally disregarded it in Austin, but... 1) Have no experience in San Antonio (not yet!), and 2) I'm still a little cautious - I don't put pictures of the outside, and I don't give my address out until booked. 

That being said, I think the regulations scare off most of the supply and can cause higher prices. So I view it as a risk worth taking. 

@Alex M. So airdna.co is purely for short term rental estimates - revenue, seasonality, etc... 
I find it to be very accurate in my market, but don't trust it in cities with very small numbers. Or if a zip code only has 3 data points I don't trust it.

But where I live (78701) and the nearby area, the data has been very accurate at predicting revenue and the months. For example it says November is the slowest, followed by Dec, followed by Jan, and that's been true down to the details projected. (For me I averaged $2.5k per property this winter... Then it says you print money March - Oct :-p). 

Zillow, I love but don't trust. My only real experience is Texas  where privacy regarding sales prevent zillow from showing actual sales numbers. However, any realtor can pull those accurate comps. Only comps I get from Zillow are current listing prices.

I have a number of short term rentals in Austin, and it's been great. Feel free to message, if you have other specific questions.

1) It's all booming now. But for STR, I personally focus on something walkable. All mine are downtown or close. But if you had a deal a little out, perhaps the savings would be great enough.
Just run the numbers on the property vs the airdna.co or airbnb estimate.

2) I've had zero issues. My understanding is that they stopped enforcing it when the lawsuits came in and the state of Texas explicitly said they'd side with STR owners.

3) The cashflow is great. Who can predict the future? But it's good enough I'm happy regardless.

4) That just depends. Has little effect on STR, in my opinion.

How to get started:

1. Buy a house.
2. Furnish it.
3. List it on airbnb.

That's pretty much it. I personally look for walkable places. And because short term tenants don't care about things like school districts and what not, it's a good way to get a deal, and have the same superior cashflow.

Yes, SAT did pass regulation, but 80% of people aren't registered. And I've been doing it in Austin (heavily regulated) for a while and have had zero issues.

@Dan Burstain So, a luxury condo for $500k renting for $2k (which is 2.4% COC ROI), is not close to $4k (as mentioned earlier). That is literally negative cashflow with most conventional loans.

I agree appreciation is what draws people here, no doubt. I'm just not seeing the same numbers.

Outside of the city of Austin, I've no idea. The example closest to a $500k investment bringing in $4k is technically in Lakeway, not Austin. So it's a little apples to oranges. The idea behind Austin being #1 in the ULI for investors, is that city's booming density is bringing insane density... Which is not the same selling point as Lakeway.

Maybe relevant to @Kevin Yi's question... I know of a huge 4 bedroom home on the east side that was listed at $2,000/mo for rent, and it sat there for months. I was the first to make an offer to rent it. 

I'm not saying it can't be done, because I know of many 20%+ COC examples. But I don't want people to be misled to think you can come in Austin and buy a place downtown for $500k and get $4,000 a month, and experience the appreciation. That's just not happening. Yes, outside of Austin the cashflow is a little better... but the appreciation will come from density.

@Roger Covin It sounds like in 6 months you'll take cash off the table and we'll be a lot higher than 8%. 

If you can own a house for $75k that cashflows $1,000 a month... that's pretty good! 

Not only is that potentially better than 8% COC, but even if it were 8%, it seems silly to compare it to an index fund. An index fund does allow you to deduct appreciation, it doesn't account for appreciation (SATX is one of the fastest growing cities, and highly ranked among developers), and again, that doesn't account for your cash out.

Seems like area will be later to gentrify than others, but I personally think it will certainly appreciate faster than most zip codes in SAT (as you can't buy much lower than $10k a lot).

Sounds like a great investment to me, and everyone is getting hung up on the 8% COC.
And btw, you can like refinance after 6 months. 

Agree with @Bryan Petrinec