All Forum Posts by: Jarrod Covey

Quote from @Caroline Gerardo:

This trend is nationwide. STR operators acted like the wild west. Tenants driving neighborhoods into three day frat parties, trash and water problems, additional crime, parking problems... while the city received less taxes. Cities want to tax all STR to pay for the use. States want the income tax lost from hotels.

Keep up with the every changing rules in your property location. The get you with huge fines. The fines will diminish your bottom line. 

Go to the city counsel meetings and advocate for your right to own income property and demonstrate your kind responsibility to counter the tide.

The cities right outside big metros don't mind STR operators because it brings foot traffic and sales revenue to their cities 

The mature cities who have been dealing with STR complaints at city council meetings for years and years are searching for a more regulated structure to co-exist in

The trend that should be adopted is STR operators sending seperate Rental Agreements outside of AirBNB and having these Agreements explicitly state "No Parties, No disturbing the peace, etc". This in addition to collecting a security deposit stopped the threat of parties from ever starting at the places I manage.

Quote from @Ryan Kelly:

@Jarrod Covey I think this will impact STR operators over the coming years. The city is going to focus more on enforcement than they have in the past. In addition, there has been a rush of investors and owners converting their homes and rentals into STRs, so there is bound to be an oversupply at some point. I've got people calling me weekly asking about STR potential in Austin. Many are going to switch to the mid-term rental strategy to try and avoid the regulations, but that could potentially cause an oversupply in that category as well. I think the best operators will survive and thrive, but a lot of other owners will have to make some tough decisions.

 Appreciate the well thought out feedback, and I agree, the city seems to be motivated to stop illegal operators. 

Biggest curiosity regarding all of this is how they intend to crack down on illegal operators. Following the lead of cities like San Francisco and working directly with Airbnb would be most effective. 

Currently, AirDNA shows 9,943 listed properties in the City of Austin. My guess is that number will start to decline in the next six months -- but we shall see!

Austin Business Journal released an article this morning titled "Austin City Council moves to tighten reins on short-term rentals"

Political Significance: City council voted to approve an amendment to be drafted to City Code that governs STRs. More specifically, sections 25-2-788 through 25-2-799 & 25-2-950 of City Code govern all things Short-Term Rentals. In this Dec 8th meeting, city council voted 10-1 approving an amendment to the Code to be drafted and shared with the council no later than March 2023. 

Operator Significance: Based on pace of city, this won't affect operators for at least a year, more than likely a year +. The article notes "This action indicates City Hall is returning to a subject that made waves in 2016 but became tangled up in state court". Nearly 8 years later something is about to be proposed, not passed, by city council.   

In an article posted Sept 9th of this year, Austin Business Journal noted that "City officials suspect about 8 out of 10 rental skirt rules and taxes."  That same article outlined how the city was policing these non-permitted houses and the methods were very manual and time consuming. If the amendment doesn't define a more sophisticated method in finding non-permitted houses, this will have little affect on the STR market in Austin. 

Quote from @Nathan Gesner:

Quote from @Jarrod Covey:

I haven't seen an overlay specifically for short-term, but most city maps include a zoning overlay. All you have to do is figure out which zones allow STR. For example, my City allows short-term in zone R-3 or above. It's color-coded and easy to identify.

 That's a clever approach to identifying opportunities. These same maps in Travis county provide easement and flood zone layers that are useful when purchasing a property

Quote from @Kevin Smith:

Hey @Jarrod Covey

That's pretty cool.  I definitely wouldn't mind seeing such a tool here in the Denver area.  I'm not sure how much you've looked into the Denver area yet, but Denver proper and many of the surrounding areas aren't allowing nightly rentals for non-owner-occupied properties.  Some notable exceptions would be Arvada and Unincorporated Adams County.  There's also Wheat Ridge, but last I checked, they were close to issuing their final license.  Westminster should have their rules in place next year (it's still up in the air whether they'll have the primary residence rule).  Finally, Northglenn and Centennial may be options, but I prefer the Arvada and Unincorporated Adams locations more.

 This is great information, Kevin! I've comped out a few properties against their debt service, but I'm not very familiar. The Denver market has a lot to offer IMO. Would be great to connect next time I'm out that way.  

Quote from @Leslie Anne Morris:

That's pretty cool, have not seen this anywhere else.  I imagine the spots that are easy like this to determine regulations will become saturated fairly quickly.  Low hanging fruit syndrome. 

From agent optics, the least favorable part of it is seller's expectations being inconsistent with reality.

What I see most commonly is an overestimated net revenue trying to trade at a 5 cap when it is really a 2 cap, or a random value associated to the STR permit and added in addition to the house price

There are benefits -- like finite competition and peace of mind knowing the government won't shut you down out of no where 

Btw - enjoyed your episode on the Sjogren podcast !

Quote from @Ryan Moyer:

I live in Ogden. It's awesome. But it is not a good STR market if you're looking to make money or even break even.

Can you expand on why this is? @Ryan Moyer

Comps on AirReview show profit over expected debt service is why I ask. Is there a STR tax

People have said similar things about Austin’s STR market bc of the 11% hotel tax, but it’s not the case 

What a great thread @John Crimmins! A beachfront market I've been tracking is a lot is Gulf Shores because of an anticipated increase in tourists. That is because starting as soon as March 2023, the airport there will start to host commercial flights! 

I am not as familiar with west coast markets, though there have been a few people on podcasts speaking highly of Ogden, Utah. It is not technically west coast but it does feature snowboarding and scenic views! 

Hello BP! 

STR owner/operator, Airbnb co-host, and realtor here in the Central Texas area.

Curious if anyone is seeing suburbs of major metro's develop STR regulations anywhere else in the nation?

Here in Central Texas, New Braunfels has made it incredibly easy for investors to identify properties through providing an interactive gis map. Simply search the address and use the legend to identify STR friendly zoning.

Here is the link for the map https://newbraunfels.maps.arcg...

A 2023 goal is to purchase an STR out of state - preferably Phoenix Metro or Denver Metro - and in an area where I can get it permitted.

Cheers, 

JC

Good information @Jared Prevost!