All Forum Posts by: Kate Stoermer

Hey Matt! Fancy seeing you here. Not quite what you were asking but Sarah Frazen over at RevZen might be able to take a look at your strategy - pricing, settings etc and give some insights - pretty sure she does ad hoc consulting - all she does is Revenue Management for STR.

Do you track your conversion rates and views?  

I don't know any masterminds that deal with larger group stays.   I worked w a gal in Orlando and she got friendly with travel agents who specialized in larger groups and sport organizations (the latter of which there must be some for around A2?)  

If I can be of help, shoot me a text. I do a lot of this type of work.  Happy to give a high level assessment and catch up. 

So, you're going to visit a potential STR market and you are wondering about steps to get started? Here's my 2 cents:

1. Have a clear goal. Some people get into this for ROI and could care less about the property itself provided it turns a strong ROI. Others care deeply about the property, location, layout etc. Most people just getting started are inbetween. Advice is helpful - if the person giving it understands your goals or you align with theirs.

2. Learn how to analyze income potential.  YouTube is a world of help, there are calculators (including here on BP).  Don't take a local realtor or Property Managers word for it unless you can have an informed conversation with them about how they came up with those projections.  Remember achieving income potential is a result of good management and knowledgable marketing. 

3. Have realistic expectations.  Its harder to find cash-flowing properties, and in some markets they are hidden gems (in need of renovations) or simply don't exist.  

Have fun!  

I just did an optimization analysis of a 3 bedroom in Pigeon Forge area in a resort (shared amenities) for a client.  You've gotten a lot of good info and I see that you understand you are likely to be around break even and using the tax deferral strategy as the key goal. 

What price point are we talking? 

Here's the thing - income potential is as much or more about how well marketed and managed a property is.  But its also about alignment. You are asking good questions but let's be clear - 

Question 1 -  great view.  Its a premium amenity.  And it comes at a price. Ideally you buy and set up as a upscale or luxury offer. What you can draw as income will depend on too many factors to suggest. 

Question 2 - heads in beds. Sure, they..can make more.  Or not.  Its the whole package. A 4 bedroom with 1 bath or a 4 bedroom with (2) ensuites has a big differiental. Here's that alignment point again - these two are very different offers and will generate different income. 

Question 3 - Resale (appreciation) Them's gamblers words. Okay, maybe not. But the area has seen sharp climb in home values so it stands to reason it will level off. Thats a question for a local realtor, not an STR consultant who serves across the US. So, grain of salt.

Question 4 - having just done a pool ROI analysis for a client - its hard to say without specifics (type of heater, size, etc). But let's go with $2500. AI is fun for making assumptions like this, and it will ask you quesiton to help. Do you need a pool? Familes coming with kids want access to amenities. So if you don't have a pool/access to a pool then assume you are more likely catering to a different type of group or a different budget tier (ie, "cant afford a pool")

Question 5 - steep driveways is a point in the area that deters ..some.. potential bookers. For a view, I'm sure most placs  with steep drives do just fine.   And I also giggle about Bear break ins... only because last time I was in Gatlinberg we DID have bears frolicking on the roof of our condo. But they are a real risk in mountain communities. 

The truth is - some homes (think wow factor - right location, right view, etc) can always do well.  Some homes we have to work harder to make them even break even. Its a big market.  Pick what's important to you - views or a pool?  Larger home or smaller home.  Closer to town or further. Be your ideal guest and run numbers and see what makes sense and what you'll enjoy owning.  If the numbers make sense for your goal (tax) and its a solid home run well - score. 

Hope this helps!  

Talk to Rent Responsibly, they might have insights. That said, ss far as I know...no. 1773 different legal municipalities in Michigan alone- everyone gets to pick how they regulate and no standard place or way to capture that. Plus some just say they arent allowed because zoning regs would have to explicitly allow. Plus state level- which is a hair easier. Some states regulate at county level too Taxes are often separate legislation or regulations than STR stuff. It feel like a tough nut to crack, but if you can- amazing.

If its their only listing they can make you a co host and they can essentially leave the account. Otherwise,  Its...not terrible to start fresh. Take screen shots of past reviews to show, use "new management" language in the narrative and use the new listing  discount.  

May 2025 update - if you use a channel manager you can still collect it for on platform booking related purposes only. 

So I'm just parroting The STR Law Guys... The best layers of protection, but of course - get your own legal opinion from your own team

 1. Rental Agreement for every stay (include language that covers credit card authorization and controlling law language) 

2. STR specific insurance with minimum $1M liability coverage - ideally more (not just landlord insurance)

3. LLC structure - one property per 1 LLC that roles up to a Holding Company (I've heard that if you have multiple properites in one geographic area that's probably okay)

4 Holding Company is held in a Living Trust 

I have no input to your location, but check out the STR Law Guys - I've seen them present at a few conferences and its good content.

Quote from @Collin Hays:

They are on a roll.  

Both VRBO and Airbnb switched to the "all in" pricing in the name of "transparency."  What they actually meant to do, and did, was completely disguise their fees.  

Eventually, both are going to face a class action lawsuit and end up in court over this one.  

What would be interesting, is if you placed in the body of your Airbnb description texts something like:  "Please be aware that Airbnb assesses a 15.5% service charge on all reservations, which is then included in your total price."

Think they'd delete that?

 Actually, they were mandated as an FTC ruling that went into effect in May.  I already put details like that in my descriptions and I am adding precisely that statement to my listing descriptions. But we know less than 1/4 of people actually read the listing description - at least prior to hitting "Reserve".  But..its there.  I'm thinking more about that lack of transparency and how we will need to rethink modeling investment potential - I'm sure the data clearinghouses like AirDNA are scrambling to update their processes so their products continue to be (mostly) relevant, but like Pricelabs allows you to see your comps cleaning fees which won't be available anymore for Airbnb listings etc.  https://www.theceohost.com/blog/airbnb-pricing

Quote from @Terrance Hill:

Hey Derek! Welcome to BiggerPockets — it’s great to see someone taking the time to really prepare before jumping into investing. Giving yourself six months to learn about STRs is smart; you’ll be surprised how much you can pick up in that time by networking, reading, and connecting with experienced operators.

Even in smaller markets like Jackson, MI, there can be solid opportunities if you understand the local demand, seasonality, and regulations. One thing I've seen help new STR investors is starting with a few case studies of similar markets, talking to property managers or other owners, and really mapping out expected cash flow and expenses before making a move.

Also, don't underestimate the power of virtual networking — connecting with experienced STR investors online can save you a lot of trial and error. By the time 2026 rolls around, you could have a clear game plan and maybe even a few potential deals lined up.

Are you thinking about starting with a single property first, or looking at multiple units right away?

Jackson? Interesting example. I mean, sure - acquisition costs are low. Not exactly a hot bed for STR, and city is strict on rental housing. So much more fun to find a little log cabin on a lake, value add, enjoy visits to the property and enjoy the ROI. But it truly starts with an individuals goals. Jackson as an example? Go to Detroit if you want affordable urban.

Quote from @Don Konipol:

Quote from @Patricia Andriolo-Bull:

There is no end in site for these platforms to play games. They just don’t want guests to see how much they charge. I’m on the higher end and guests end up paying Airbnb $2-3k which is outrageous. Now they want to disguise that fee and make it look like I over price. Hopefully more will come to my direct booking site now. 

 From the view of the consumer WHO CARES?   The customer is just concerned with their total cost, not how the pie is divided.  It’s not like the customer is going to say, well, since the host is only getting $200 of the $275 then I’ll go $75 over budget because it’s not their fault.  The point (from the users point of view) isn’t that the Airbnb fees aren’t disclosed separately; it’s that those fees increase the cost to a certain amount.   Since Airbnb fees increase the total charge, either of the following result - (1) host lowers amount charged so TOTAL amount still attracts customers (2) total amount is enough to decrease demand and hence increase vacancy time while consumers find cheaper alternatives either through less expensive platforms, direct with host, or at hotel, or (3) consumer stays home or goes somewhere else. 

Here's what I don't understand. How can someone be in the STR business for the long haul and NOT do everything possible to establish a business model where they're almost exclusively direct to customer of through low fee platforms? I understand that 10 years ago (when I owned some STRs) competition was less, Airbnb fees were lower, and Airbnb was all you needed to have an outsized profit - if you were in the right location. But now? It will only get worse as Airbnb growth slows down - they will look to "make it up" by "squeezing" hosts even if it's detrimental to themselves long term.

It .. depends. These platforms making getting warm leads easy, and it takes a lot of warm leads to get enough bookings. While inching toward more direct bookings is a good goal, for most STR operators getting the eyeballs needed in order to hit conversion rates is a lot more skill and time than paying these platforms to do it for them, esp. in markets where direct booking was never a thing. I would also note hospitality science research tells us the biggest driver on the "buy" decision is trust. The platforms offer that immediately. An operator with a listing or two ? Much harder sell with trust in the equation. I agree from the consumers standpoint this is a non-issue and frankly probably not worth the hype its getting There are SOME muncapalities where there are minor tax implications but most folks just want to know how much their stay costs and compare it to other options based on total cost.