All Forum Posts by: Tyler Divin

The people I know that use overseas employees for guest communication and admin work successfully hire people full time so they learn the properties and spend a TON of time documenting the home and the processes.  That means SOP's with a video of every lock, every TV, links to their manuals and troubleshooting sites, photos of everything, reminders for when the last time the batteries were changed out, documenting every possible Q&A, documenting what constitutes an emergency, training them, recording them, giving them feedback after reviewing their communications, and having company operating procedures well documented to build them up to where they know as much as possible about the property without actually having visited it.  I think it would be a disaster to hire a firm/call center to handle these things or to hire someone, put them on the listings, and let them figure it out as they go.  That would be frustrating for you, the guests, and the employee.  To do it the right way it's a huge upfront investment on your part but I've seen where it pays off when you hire the right person, train them properly, and give them the documentation/processes/SOPs/material.  It does not work to dump it in their lap and hope for the best.

This does not sound like fun. It sounds like Sevier County doesn't have the manpower or a well-defined set of criteria for what they're inspecting for.

In Chattanooga, you have to apply for a permit.  There's an application fee and a permit fee with annual renewals.  To obtain, apply for, or renew a permit, you must sign a form that includes an affirmation stating that your property complies with the codes (a linked PDF) and then schedule an inspection.  The inspections are conducted by the building department inspectors, who focus on the items listed in the PDF document.  It all seems to work well.  

https://chattanooga.gov/pay-and-apply/permits-applications/s...

https://chattanooga.gov/sites/default/files/2024-05/SVR_Code...

Do the large owners and managers in your area have any association?  It sounds like Sevier County could use some guidance on how the process works.  If you band together, starting with a Facebook group, you could exert influence on the procedures.  A big thing I've found after being involved in STRs is that those who aren't in the business often are very ignorant of the most basic parts of our business. 

For example, I had a HOA board member call me one time and ask me if we knew when a guest was in the home. Ahh, yes, we do. How do you know? Well, they've booked the dates, and we've prepared the house for their check-in. I can see when they use their code in the lock, and I can see their vehicle in the driveway on my camera. Ohhh, okay, good, that's good. I wasn't sure if ya'll even knew when people were there, so that's good to know. This comes from a guy who had STRONG opinions on every single issue relating to STRs in the neighborhood and was CONSTANTLY trying to make rules and regulations that affected everything. All this to say, don't assume the people regulating these things have even a basic understanding of how the STR business works.

Hi Gregg & Gwen, my wife, Meghan, and I are vacation rental managers in Chattanooga and North Georgia (ChattaStays). We're glad to help answer any questions.

Regulatory - Start here https://chattanooga.gov/pay-and-apply/permits-applications/s... Long story short, you can't get a new permit in residential zoning in Chattanooga or Hamilton County.  A lot of townhomes downtown are zoned to allow non-owner occupied STVR, and let it, but the permits are limited to 25% of the project, so you have to ask, and it's constantly changing on new projects.  Don't believe what the developer or the real estate agents say; only what the city says matters. 

There has been a significant influx of townhome development in Chattanooga. I checked about six weeks ago, and there were 44 on the market in the greater downtown area (which is probably a record for Chattanooga); today, I see 67. Additionally, multiple townhome projects are currently under construction in various stages, so I think it's fair to say it's a buyer's market for townhomes.

I don't know of any new taxes or regulations brewing.  Our big overhaul that culminated in the ordinance I linked happened in 2023, which included fee increases and a halt to the issuance of new permits in residential zoning.  Everyone seems to be happy or used to where it sits today.  Some residential homes on the market have existing permits, and existing permits can be transferred, but again, you have to check with the city.  We looked at one for a client a few weeks ago, and even though they were advertising it as having a transferable permit, the permit had expired and could not be renewed because of the zoning.

The positive side of our regulation is that it has limited the number of STRs we have, so annual revenue, occupancy, ADR, and RevPAR are all trending up.

Underrated neighborhoods - I would say Highland Park and St. Elmo, but again, you have to be able to get a permit.  Lookout Mountain, GA, on the bluff (no permit required), and the Rising Fawn, GA area, offer cabins with hot tubs and a North Georgia mountain feel with their own set of attractions (Cloudland Canyon State Park, McLemore Golf Club, Chickmauga Battlefield, Lookout Mountain Flight Park, Rosie Mae's Coffee Shop with Llama's, etc).

For downtown townhomes, rooftop decks with a mountain view of Lookout Mountain and/or the city can reach income levels that those without them cannot. I'm aware of at least one off-market townhome that features a rooftop deck with views, which the owner would be willing to sell.

Only about 10% of the STRs in Chattanooga have hot tubs, so if you have a way to add one, it's a difference maker.

I don't know any investor-friendly agents. Not saying they don't exist, but STRs are not moving very well in Chattanooga right now. Most agents focus on the owner-occupant sales, and I hear a lot of misinformation about permits and revenue floating around. We'll see if the STR buying market heats back up with the return of 100% bonus depreciation.

I have a great property manager recommendation, best in town if you ask me :)  I also have a great insurance broker who underwrites a lot of STRs and is very knowledgeable.  I can recommend some GCs, but I would have to understand the work before making the right recommendation.

Seasonality does trail off hard after New Year's, but picks up again starting the 2nd week in March with Spring Break.  Overall, Chattanooga is a great market.  Barring January and February, the rest of the months are more consistent than, say, a mountain or beach town.  More than 11 million people live within a two-hour drive of us (Atlanta, Nashville, Knoxville, Huntsville, and Birmingham).  We're those town's 3-day weekend/quick/easy/affordable trip town all year.

We're glad to help regardless of whether you use us or not.

I certainly understand being cautious, and including a golf cart absolutely increases your risk; however, at the same time, nearly every beach town in America has bikes, golf carts, and mopeds, and those trike things for rent.  Every golf course in America rents golf carts all day, every day.  Most cities have e-bikes for rent that go 15+ mph. All of those businesses aren't getting sued into oblivion.  You can't waive your right to sue, but if you're providing a well-maintained golf cart in a community that allows them, making guests aware of how to operate it, having them sign off on a document saying you must be 25, have a valid driver's license, operate safely, you take responsibility, your insurance, etc.  I think there is a way to do it responsibly.  I'm pretty risk-averse, and I was able to make myself comfortable with that part.

The reason why I sold ours is that I couldn't figure out how to avoid bad reviews or canceled bookings if the golf cart broke down or was in for repairs.  What if I have a big week-long booking in July, the guests chose our place because of the complimentary big neon blue six-seater golf cart to ride around Helen, GA, and the guest before them rams it into a curb, and it's down for repairs for the week?  The local rental place only had a few six-seaters, so if I'm lucky, I'm paying $165 a day to rent a six-seater, or my guests are unhappy.

For all the reasons discussed, I think @Josh Ball has the best idea to partner with local rental companies that offer pickup and dropoff.

@Josh Ball

We had one for a little while and found insurance for it through https://www.foremost.com/.  We required a copy of DL's for anyone driving and their insurance.  Our rules stated this and more...

ABC, LLC takes no responsibility for the operation of this golf cart. THIS GOLF CART IS SOLELY THE RESPONSIBILITY OF THE REGISTERED DRIVER(S).

We put laminated signs with this in the cart and in the guidebook with this, safety rules, and operating instructions.

Try looking at properties that have been on the market for an extended period of time or have issues and look past what they are to what they could be.  I think you'll have better luck generating cash flow buying a property that needs work than one that's already beautiful.  Especially older homes that might lack curb appeal.  It's usually not a good idea to use the front of the home as the cover photo (although that's exactly what many people do).  Guests are more concerned with what's going on inside the home and in the back yard than the front.  Keep an eye peeled for unfinished basements or garages that can be converted into game rooms, bunk bed rooms, etcetera and consider forcing appreciation that way.  An ugly, older home with a big yard presents opportunities for improvement and outdoor amenities that jump off the page to short-term renters.

I see quite a few successful STRs that started with a flip strategy. Meaning, someone buys an ugly duckling type property, re-does it, and decks it out as a STR. It makes a lot of sense if you're planning to redo the finishes anyway why not buy the home that is sitting on the market in need of updates? I have encountered prospective clients that have a friend or know someone that has done well in STRs starting with ugly properties with issues and fixed them up turning them into rockstar STRs but the client's shopping for a turn key home or existing STR where all they have to do close and sign a management agreement to be in business. At today's prices and interest rates turn key deals that cash flow are few and far between. I think it's commonplace to confuse a fix up strategy with a STR strategy. The STR is the way the property is put into service but the original strategy was buying a house that has issues and spending a lot of time, money, and elbow grease fixing it up. All the blood sweat and tears poured into the project to force appreciation tends to be overlooked.

We just went through this recently when we sold a property we personally owned.  Airbnb let us off the hook complexly without penalty with a closing statement, VRBO did not they said selling a property is not a valid reason to cancel bookings.  We appealed and they cleaned the blemish off our record but my understanding is they did it as a favor because we asked nicely.

https://help.vrbo.com/articles/Partner-Cancellation-Fee-Poli...

@Collin Hays How do you reconcile this against AirDNA's market data that shows Gatlinburg/Pigeon Forge ADR and annual revenue up 9%, RevPAR up 8% and occupancy at 60% (down only 2%) versus your Black Bear Falls cabin at 53%?

Oh, one more thing.  Look for gaps within the market.  Go to Airbnb and search for 1, 2, 3, 4, 5 bedrooms and run a little spreadsheet subtracting to find out how many of each there are.  I did this recently for part of our market and noticed there were half as many 3 bedrooms as 1's and 2's and in the downtown area very few 4 and 5 bedrooms.  If you find that go look at all the 4 and 5 bedrooms.  Are they performing well?  Are they competitive?  Are there any ugly duckling 4 or 5 bedroom homes for sale that could be turned into rock star properties bursting with amenities that would outperform for large groups?  Filter for pools, there might be very few if any.  Now go to Zillow and create a search for 4 and 5 bedrooms with pools.  Onto the next market. Bait lots of hooks like that and wait to see what bites.