All Forum Posts by: Ryan Moyer

It's mostly the middle one. SLC doesn't really enforce it very strictly. But it's playing with fire to buy there if STR is a priority as it's very likely they will eventually start enforcing it better.

@Trevor McCormick I have a lot of properties in that area.  If you want some revenue numbers for similar properties to the ones you're looking at or anything to use in underwriting feel free to reach out.  Just make sure you're actually putting pen to paper and doing your due diligence on underwriting.  It's a competitive market and most of the people that get in trouble here are ones that buy blindly without actually figuring out the numbers, etc.

You'd be surprised the number of times I get asked after month one if their electric bill of $xxx or whatever is normal, and the thought running through my head is "how did you not  check things like that before you committed half a million dollars to something?"

If you're doing STR the first thing you'll need is the VLS license from the state, and that comes with the requirement of taking an 8 hour class.

There weren't any of those on the schedule, but I need mine so I talked them into doing one in early February if you want to hop on that one.  It is virtual over zoom but taught live.

Hi Melanie, I both own and manage in the area and to be honest, the market in Kissimmee/Davenport is tough right now unless you're willing to invest a lot of capital into high end theming. 

The area has certain advantages like shelter from regulation risk (pretty much as low as anywhere in the country if you buy in the approved STR tourist zones) and long term security (people aren't going to stop going to Orlando anytime soon). It is a nice safe long-term spot if you're approaching it with a more long-term traditional real estate mindset. But the competition is high so cash flow or even break even can be an unphill battle unless you're willing to put money into the property.

The reality is that this isn't people crashing on the couch while we're out of town anymore.  Most of us are running lodging businesses in areas that are zoned residential.  As long as you're doing that, there's always a risk, and 50 years from now it will probably be illegal everywhere to operate STRs in residential zoning, just like it's illegal to operate a steel mill there.  Every market in residential zoning has an expiration date, we just don't know what it is yet.

The obvious solution is to buy in already regulated areas with tourist/commercial zoning.

The returns are lower, but at least they can't go to zero overnight.

You're not wrong, but there is certainly some irony to several (4 out of 5?) of the "great photo" examples having calendars that are wiiiiiiide open, with barely a booking on them.

AirDNA only know whether a night is open or booked.  They don't know the source of the booking.  So whether it books on the hotel site or Airbnb, AirDNA will see it booked either way.

The only potential discrepancy is if they're listing it for a very different rate on the hotel site than on the Airbnb site.  So it's listed for $79 on the hotel site, and $189 on Airbnb, if it gets booked on the hotel site AirDNA will just use the Airbnb price of $189.

But most people have prices the same, or at least similarly close, across platforms.

The numbers don't make sense to me, based on their descriptions.

The most dubious is "First page search impression rate"

Airbnb defines it as the percentage of time your listing shows up in the top 10 results when a guest searches for a location/date.

I have 30 listings in a market with 20,000+ homes available, and they all have a "First page search impression rate" of 40-60%.  Nevermind the unlikelihood that any ONE of them is appearing in the top 10 that often (especially at the rate we're getting bookings, I know we're not showing up on the 1st page nearly that often), it's statistically impossible for 30 listings to show up in the top ten 50% of the time even if our 30 listings were the only ones in the entire market, instead of there being 20,000 other listings.

It makes no sense.  Some of these listings are dead on Airbnb, way down on page 17 on Rankbreeze etc (others doing much better).  Airbnb basically lists that metric as 40%+ for every single Airbnb property even though statistically it's only possible for most properties to show up in the top 10 well under 1% of the time.

How the hell can 20,000 properties in a single market all show up in the top ten 40% of the time?

Two factors at play here.

1) STRs generally appraise as residential homes, not as businesses based on multiples. In STR common markets like Gatlinburg this naturally adjusts itself as most homes are STRs so the entire market lifts to meet their cap rates, and they appraise on those cap rates in spirit, even if not technically. You don't have that action here so are left as an outlier, way above appraised value. Even if offering owner financing it's still tough for someone to risk $1M on a property that appraises for a small fraction of that.

With multiple units, maybe you could look at a commercial sale?  I'm not super familiar with the commercial side of things, are there commercial appraisals that can be done on multi-unit properties?

2) You net $85k....but since you bought in 1994 I assume that's with no mortage.  That $85k cash flow pretty quickly becomes $0 once you add a $1M mortgage to it at current rates.  So what's the incentive of the buyer to spend $200k+ cash just to break even on a property that is in a market with limited to no chance of appreciation?

Airbnb dynamic pricing has ruined the whole industry.

Airbnb's dynamic pricing isn't designed to get YOU a booking.  It's designed to get AIRBNB a booking.  Because Airbnb only makes money when the guest books on Airbnb.

Hence, they want the price to be cheapest on their platform, so people book on Airbnb instead of elsewhere, and want their properties to be able to compete with hotel prices (even after cleaning fee and service fees).  That means their pricing tool is designed to price beneath the rest of the market, which drags the entire market down, especially when combined with their algorithm changes a couple years ago that made pricing (IE lower prices) the #1 factor in ranking.

Even if you use an external pricing tool, it gets dragged down by the people using Airbnb's pricing.  But at least you have a chance, and aren't exacerbating the problem as much.