All Forum Posts by: Ken Boone

Quote from @John Carbone:

Quote from @Ken Boone:

Quote from @John Carbone:

Quote from @Michael Baum:

I would also begin to wonder if this is something systemic with the area. In the greater Sedona area, water can be hit or miss.

There are some areas outside of the Sedona area that look like great opportunities until you find out that their aquifer is drying up and water will no longer be available.

 That’s what I was kind of getting at here. I’m hearing this more and more around here. How do you protect yourself even on a “turn key”, do you just lose half of your investment when the water runs out and can’t be brought back?

No I think you gamble and drill another well or go deeper and pay the price. 

And what happens when the gamble doesn’t pay off? 

 I think you will eventually hit water just may have to pay more and go deeper in that area.  I don’t think the gamble is whether or not you will hit water.   The gamble is in how deep you have to go and how much is that gonna cost.  But I would definitely be talking with the well drillers as they have a pretty good idea about most areas they drill in where the water is and the typical depths they have to go. My comments are only concerning the southeast don’t know anything about out west. 

Quote from @John Carbone:

Quote from @Michael Baum:

I would also begin to wonder if this is something systemic with the area. In the greater Sedona area, water can be hit or miss.

There are some areas outside of the Sedona area that look like great opportunities until you find out that their aquifer is drying up and water will no longer be available.

 That’s what I was kind of getting at here. I’m hearing this more and more around here. How do you protect yourself even on a “turn key”, do you just lose half of your investment when the water runs out and can’t be brought back?

No I think you gamble and drill another well or go deeper and pay the price. 

Quote from @Gregory Boulet:

Hello Everyone,

I’m thinking about giving the option to rent a PS5 VR2 to my Airbnb guests. I mainly advertise to traveling professionals and it’s likely that a 50 year old traveling nurse wouldn’t be interested. However if I give my tenants the option I’m sure that a lot of them would like to have it. What I’m thinking is…

$35 a week for a PS5 or VR2, or $50 a week for both PS5 and VR2.

All feedback and suggestions are welcome!

Thanks,

Greg

I put Xbox in all my strs hooked up to a 10’ theater screen as an extra amenity to help set myself apart from others.  I don’t charge extra for it.  

So I showed my wife this and she pointed out the fact that it was just listed and they want all offers in today.  Sounds like they don’t want people to see what this cabin needs as far as repair.  The listing indicates work needs to be done which sounds like more than just a well and they don’t want anyone to have a chance to inspect it ahead of time to really know what is needed.   When things sound too good to be true, they usually are. 

Quote from @Michael Baum:

Looks pretty great actually. It is a risk but I would want to know the deets on the well. How deep is it? What was it flowing historically?

Any good well guy in that area could tell you if he could find water on that or near that lot.

It does say in the ad that the new owner would have to dig a new well, so it is possible...I guess...

Devils advocate - drilling a new well isn't that expensive so why didn't the owners just do that? Are they expecting a bidding war that might bring up the sale price to where it might be with a working water system?

The well drillers in that market started doubling their prices about 2 years ago.  Well drilling there is now around a minimum of 30k for a 500 ft well. Depending on the location some have to go 1000 ft and they will charge you by the foot.  It can get real expensive real fast.  

it is also a shared well for a reason.  Either it was already expensive to build so they wanted to share the cost or historically they knew they had hard time hitting a vein there. 

It could be resolvable with another well. It’s just a gamble. 

Quote from @Nathan Gesner:

Quote from @Matt Owens:

Collect it at the time of booking. The easiest method would be to tell them you require an email to send them a receipt, reservation confirmation, house rules, etc.

 That is a way to collect but that is not acceptable to use in a mailing list unless you also have their consent for it to be used on your mailing list.   At least that is my understanding.  

I use hostfully's guidebooks at my STRs. Anyone at my STR, husband, wife, brother, sister, mom, dad want to see the digital guidebook, they have to enter their email and concur. I get them all with a concurrence and slap them into my mailchimp audience.

Quote from @JD Martin:

Quote from @Leslie Anne Morris:

I would calculate your break even and determine what it's truly worth to you.  You will be renting for less per night and still having the same amount of wear and tear.

 And that of course leads to the second part of the conversation - if you'd rather it be vacant than rented too cheaply, how long are you willing to do so? I suppose the easy answer is "until I run out of money" or "until the market gets better" but let's suppose there is no "better", but instead a market shift (i.e. oversaturation, market loses popularity, etc) or you're unwilling to actually run out of money - what then? 

To some extent this seems to be playing out in my own market (Four Corners, FL), where there's a lot of inventory and still a lot of owners that are willing to chase the dollar to the bottom. My PM says all of her properties right now are somewhat slow. I'm not one of the bottom chasers - I'd leave my property empty completely than rent below what I feel is fair and reasonable, regardless of the "market" (I use this house too, so that is part of it), but a lot of my PM's owners feel opposite - they'd rather have $50 than no dollars. One of the side effects of this strategy is that it drives the market down for everyone, and I'm curious how many owners out there will see stagnant prices (especially the ones that just recently bought as Collin H noted above) and decide to jump ship or continue the race to the bottom. 

 We are seeing the same thing in the PF/Gatlinburg market.  I have seen 6 bed cabins listed for cheaper than my 2 bedroom pool cabins.  There are a lot of new owners that are panicked expecting the same thing we saw for the last two years and they bought based on those numbers.  I don't think many of the new ones will be able to just ride out with the cheapest price strategy.  Time will tell.

Quote from @JD Martin:

Quote from @Ken Boone:

There is definitely a balance that has to be played out here.  And that low rate may be different by season as well.  Also, it depends on the client, I would go much lower on a returning guest that previously treated my properties well, than some random guest because I know how they treated my cabins.  But there is a price point that once you go past heading downward, you definitely raise the risk of bad guests.

 How much lower for a good repeat guest - 10%? 20? 30? At what point would you rather have it empty than rent to a repeat guest at a cut rate?

For a repeat guest that treated my cabin well, i would drop it to 50% if I had too if it was last minute and we were not booking well.  Why not make 50% off a guest that treats your cabin well vs nothing?  I have never had to do this as of yet though.  Keep in my mind my rates are on the high side typically.  Most of my cabins have indoor heated pools so I start out much higher, plus I have low mortgages compared with those who bought in the last couple of years.  In a normal scenario I would never consider dropping past 30% and that would typically just be for last minute bookings.  There could always be exceptions I suppose.  

There is definitely a balance that has to be played out here.  And that low rate may be different by season as well.  Also, it depends on the client, I would go much lower on a returning guest that previously treated my properties well, than some random guest because I know how they treated my cabins.  But there is a price point that once you go past heading downward, you definitely raise the risk of bad guests.