All Forum Posts by: Lyndsey Garza

As someone who has watched the Texas Coastal market closely (from Galveston) over the past 15-20 years, there are a few factors I believe come into play when looking into revenue comparisons across these markets. 

I believe the differences in demand between the markets, what brings the renter to the destination, number of available properties (supply), and Galveston’s close proximity to Houston are the main reasons for revenue differences. As compared with Padre or Port Aransas, Galveston tends to attract guests who stay shorter stays and may be thinking more last minute. We had a VERY short booking window this past summer - still continuing! Market saturation and comparable property type(s) can also be responsible for lower revenue totals here on the Island. The name of the game this year here on the Island was occupancy vs typical revenue earned. 

Hi Katrina! Great news on you taking the leap of faith into real estate! I have only worked as a manager & real estate broker on STR investments. Personally, I would not touch management of LTR properties with a 10 ft. pole! Location is key to determining which strategy would provide the best ROI for you.

And besides, owning an STR is more fun! Now you can actually take a vacation and enjoy the home yourself when you want to block off time. You won't get the reward of personal use with an LTR home. :)

Are there locations that you already have in mind?

Hi Sean, 

Unfortunately, your experience during a Vacasa acquisition happens to many owners. The transition from small local company to a big publicly traded company is never easy for owners who are used to a certain level of personal service that the local management company provided, amongst many other tech changes, commission structure, etc. The transition after a buyout can be quite painful to all involved, owners & employees who made the transition to Vacasa. This has been true & I also experienced it first hand 9 years ago, but as the local management company owner who sold their “baby” to Vacasa. I have been a real estate broker in the local Galveston, TX market for 16 years. In December of 2014, my company,  Pointe West Properties, was acquired by Vacasa. This was the 14th acquisition for the small company (at that time) and their first Texas acquisition. Quite a lot has changed for the company as it’s growth skyrocketed and since going public, but a lot remains the same as it was 9 years ago. Many of my 65 property owners had similar, if not the same, experiences. Many of my industry colleagues say that 50-60 units is the number that many managers get “stuck” a lot usually due to not scaling the growth of their almost always, seasonal business. 

Change is always a rocky road & continues to be a struggle all around when a buyout happens. It’s scary for both owners and employees to hand over the keys to their investment/family getaway. Trust & transparency are vital to the vacation rental management industry. Trust is earned over time so it’s like starting all over again for owners. 

I have a lot of respect for Vacasa as they were a huge disrupter in the VR space, similar to Airbnb. I was lucky to have worked directly with Eric Breon and Cliff Johnson, the brilliant men who started Vacasa with ideas/concepts  that were unheard of 10+ years ago. There were not mergers & acquisition strategies, brokers, or even guidelines for company owners  back in 2014. I represented myself during the negotiations. The few lawyers I consulted with did not understand the industry at all. Many of them knew nothing about this type of accommodation being an option! Keep in mind, Airbnb did not exist back then. 

While Vacasa fits some owners management needs, there are many owners who are looking for a more personal business relationship with a smaller, local company. Many of them don’t know what smaller, locally owned companies do differently. 

I just started my second management company 4 months ago  after hearing my real estate clients were struggling to find a local manager that offered a personal business relationship AND offered a tech stack comparable with the “big boys” out there. I am growing slowly but steadily & manage 7 properties to date. My website will be finished next week & I will officially announce that I am back for round 2. My success was based on relationships, trust, transparency, and customer service to both owners and guests. I am very excited to provide all of that and more to home owners again! I am staying small and plan to keep it that way. ☺️

There are so many options for owners when it comes to vacation home management - I think it’s awesome as each owner can choose what fits their individual needs and wants out of their investment. Vacasa has hundreds of homes now in my market & I do not regret my decision to sell “my baby” to them 9 years ago at all. I have learned a lot since then & am excited to be an option for those owners who want to have a one on one management style.

This was also a long post! But I wanted to give my 2 cents from a different perspective. So much has changed tech wise but true hospitality has not.
Thanks for your post, Sean. Good lucK & best wishes - keep the faith! STRs are great investments & fun to own as long as your needs and expectations are met.  

 Hi Ashley! I am a local broker and vacation rental manager who specializes in helping people gather the info they need to make an informed decision, eespecially from afar. My team can help you do it all - advise, represent on a purchase, and help you find the right management fit for your investment startegy, as well as someone you can trust. That can be difficult when you are out of state. I have 16 years of experience selling only Galveston vacation homes and would be honored to answer any questions about any part of the vacation rental real estate purchase and management options once that's done! 

What part of Houston are the properties located in?

I am at 78% here in Galveston! 

Hi Danielle, I am sorry that you are having to deal with this situation with your HOA. I like your approach of the "grandfathering" - this has been seen as the answer for scenarios that I have seen here in my local market, Galveston, TX. It seems best to meet in the middle & this would be the tactic that is most accepted by both parties, the STR investor and the HOA. It really is only fair, especially if you purchased the property for this sole purpose.

To answer your questions about market values...I will say this. As a seasoned second home and vacation investment focused Texas real estate broker, I have been watching our local market for 16 years now. There is not a valuation approach (yet) that can take into consideration STR income data for the appraisal that I am aware of. Yes, the loan underwriter may get creative and consider it then, but not an appraiser. Without data, it's hard to quantify and have numbers to back up either side.

My opinion - YES, YES, YES the STR ability does affect the market value, at least here in Galveston. It is blatantly obvious without running data. The condo building & communities that allow STR rentals have seen a SIGNIFICANT increase in their market value. It may be perceived value to the right buyers, but 97% of my clients are those buyers who want to start or expand their STR property portfolio. Because these condos have the ability to generate $30k - $100k per year in revenue, what buyers in our market is looking for. In those communities, inventory is low and prices keep climbing at a steady pace.

The communities or condos that do not allow rentals under 30 - 90 days are suffering...lots of inventory to choose from and prices have not shown much of a change over the past 2-3 years. I think value can be in the eye of the beholder (buyer) and not always a quantifiable number. 

I am a local broker and vacation rental manager here on the Island. 16 years here on the Island only. Sending you a message. 

Would love this! Please keep me on the list!!!