All Forum Posts by: John Carbone

I’m here now. Deep diving in tourist activities. Same amount of people circling for parking at Local Goat. GPS still having me avoid the parkway and bumper to bumper on back roads to cabins with out of state drivers holding me back from speeding to get to mine. This was last night. Line at Alpine Coaster longer than anytime I’ve ever been there. I’ll see what this week holds. I’m headed to Townsend and River Rat today. 

Thanks I understand that at the end of the day the numbers have to workout 

But first of wanted to make sure it was in the right range of the market because I’m very unfamiliar with this market…it’s supposed to be a “ deal” according to the seller but you know how that goes 

I have been researching and it seems comparable but thought I would ask of those that might have actually done recent deals 

Cosby. Best kept secret in the Smokies. I have 5 there and the ROI on all but one is better than the one i own in downtown Gatlinburg right on the river!

Shh don’t tell anyone.  🤣

LOL... I'd known Cosby. It is under development. Do your cabins have good views? 

The term has become synonymous with STR. I wouldn´t let it bother me, more general awareness of the market means greater acceptance and ultimately a bigger market for everyone regardless of where they are choosing to list their properties.

I went to the Smokies last week to check on a few properties, meet with my management team, and do some fly fishing.  Here are my observations:

Gatlinburg was still relatively busy, but not like a typical summer.  Several nights, we didn't have to wait for a table at a restaurant.  The traffic going through Sevierville and Pigeon Forge was still heavy, but not bumper-to-bumper.  

Townsend looked half empty.  To the east, Cosby looked slow.  There is a brand-new campground there with cabins, and it looked to be about 50 percent occupied, maybe less.

I drove over to Maggie Valley, NC and it was absolutely dead.  It felt like February.  Many of the shops were closed, and even finding a restaurant open to eat at from Sunday through Tuesday was a challenge.  Lots of empty parking lots and closed souvenir stores.  I have never seen Maggie Valley this way during the summer months.  

I drove through several entrances of the national park to kind of gauge traffic.  Sugarlands, Greenbrier, Cosby, and Cataloochee.  If the NPS is stating that the number of visitors to the GSMNP is up from last year, something's wrong with their counter, as it simply can't be.  I talked to merchants all over the region that told me business is way down.  

I read it and it said the ventless heatpump dryer takes longer to dry.

This wouldn't make it a good fit when your trying to get the laundry done on site. 

Have a property in a popular vacation destination, 7 BR / 5.5 BA / 4000 sqft. Was originally our primary residence, but we began experimenting with part-time STR this past January, and then full time STR starting last month. I'd say it's gone very well, $45K of bookings in July alone.

AirDNA and Rabbu estimators agree pretty closely, around $280K gross revenue for the year ($1100 ADR @ 70% occupancy).  Could be higher -- our $45K July exceeds Rabbu's estimate for the month by quite a bit.  Hard to know for sure, the data set is sort of thin for properties this size.

Market value for the property is around $3.75M based on recent comps.  $1.6M 30-year fixed mortgage at 2.5%.

It looks like it will cash flow pretty well at around $180K/year net. On the other hand, a sale would get us around $2M in cash. I know there are frameworks for comparing the relative value of these, but thinking about it is making my head hurt. Some of it obviously depends on our outlook for the housing market vs. STR demand.

What say you BiggerPockets experts?

Well, I said I would come back here and post my results of my experiment tanking my rates for July. That was 3 days ago. My market is Four Corners, Florida. I altered my STR as follows:

1. Turned off auto-booking on both AirBnB and VRBO.

2. Put the strictest non-refundable policy in place on both.

3. Dropped my rates by about 75%, which catapulted my listing from about the 75-125 home rank in the searches of my demographic to top 10 of my demographic (4br/3ba, private pool, house, waterfront) and top 50 of all demographics, and easily the lowest or just about the lowest price. 

In the 3 days since I did that I filled up half of my July calendar and turned down several booking requests that I either didn't like their answers to my questions or didn't like their reviews from other hosts. 

So anecdotally, there's still demand out there in my market but only at pretty rock-bottom prices, certainly lower than I would ever normally consider renting my home. Of course, I can afford to do this experiment because my STR is really my winter home and I didn't buy it to make money nor expect it to make money, and only rent it out when I'm not there just to help offset some of the fixed costs. If I needed the money on this property, it would be a pretty sad situation right now. And I have a nice place, I'm a premier host and have perfect reviews, and I was already competitively priced in a "normal" market. I spent a lot of time looking at calendars of my "competition", and there are a whole lot of empty weeks on virtually all of them, and my PM there says all of her properties are dead right now.

So I don't know about the rest of the country, but I feel pretty safe in saying that at least in Four Corners/Disney area right now STRs are struggling. If you owned for long enough and don't mind cutting prices you can probably still stay booked but anyone who got in during probably the last 3 years or so is probably getting hammered unless they paid full cash. 

Always good advice from Legendary Luke!

I guess what I was going for was that I know it can be a cash flow killer a lot of times to have a monthly expense for property management. But if you didn’t need around the year management is there another option? What if there was a service for isolated events? Emergency stop ins from someone close and local, end of year remodels involving multiple subcontractors (for bigger projects than what a handyman can handle). 
And maybe that’s the answer - there’s no real need for that. Just fishing for ideas. 

Love the podcast Luke! Keep it up!