All Forum Posts by: William Beck

I haven't seen recent data since I quit working as a national consultant for STR's a year ago, but prior to that Big Bear was always saturated and the performance on vacation rentals there was shockingly low. Not a top place to make money. You're right about saturation and the resulting low occupancy. If you are looking to offset some costs and that's your goal, it's obviously free of any major regulatory restrictions and vacation rentable vs. some other Cali cities but not a place I'd personally look to invest to make gobs of money. Again, if you're mixing some personal use with it, that's up to you. Take this all with a grain of salt though, since things may have changed in a big way since Covid.

In my opinion, a duplex with 3 listings might be a good idea with the strategy discussed. The only thing to be aware of is SEO cannibalization on the listing sites. 3 listings competing against each other for business (Even though it's your business) could drop each of the listings down in the search results if the conversion rate is affected by having 3 separate listings, vs. 1 listing for the combined duplex. I'd personally look at renting the entire duplex, see how that goes, then if needed splitting into 2 or 3. Either way, you've got options!

Revenue data is always a challenge to find unless you find the needle in the haystack where the seller has 10yr trailing full financials with a CPA. I find a lot of sellers who aren't serious investors tend to just 'ballpark' what they make, which can be a bit aggravating for clients that seek in depth info. It's good to know what the market occupancy looks like month to month so you can understand what the low-average-high expectations are there. Then the ADR you can do the same with analyzing comps for low-mid-high assumptions and create a range there too. Then you combine occupancy/ADR to get worst worst case scenario, average scenario, and pie in the sky high scenario. 

I had a few thoughts I shared here:

https://www.biggerpockets.com/...

I believe it has to do with AirDNA's data scraping. If someone blocks a calendar for a week or two for personal use, how does AirDNA know if it's an owner block for personal use, an owner block for another booking from a different source (Vrbo, booking.com, their own website). I would say sophisticated marketing & pricing revenue management should lead to better overall performance via total revenue generated with a management company. People who want 90% occupancy can always drop their rates to the lowest pricing to get it filled, but that's leaving money on the table. I think there's always a point to make when people are talking about how high of an occupancy rate they can get or have gotten. You could have the highest pricing in the market and get little to no bookings but have an incredibly high ADR for your bookings, or you could have the lowest rates and have the highest occupancy % - but neither of those strategies nets the most.
I would absolutely say I have some degree of bias working within a nationwide management company but having someone run AirDNA's numbers for a property we managed and it's showing it would make $158,0000 and our system's showing it's made $97,000.... I would say something to be very wary of. I don't think the company mismanaged that badly on the pricing, marketing and booking side. (on other fronts, that's to be debated) So it becomes a "Where did AirDNA come to that estimate?" I would say very roughly - most STR's nationally are somewhere in the 20-40% occupancy range depending on what market they're in. Some higher performers like in Gatlinburg or Branson or other high occupancy markets are doing 40-70%. But 70% is on the higher performing side. Hawaii was the only market that could consistently get into the 80%+ occupancy range as an average, but that was pre-covid and pricing/regulations in Hawaii have gotten silly. @Alex S.

I got spoiled and worked on the inside of a national management company for vacation rentals. SO I got to see the true #'s for occupancy & rates. AirDNA was always OK but not perfect. They just tend to skew a little bit high with performance.... which isn't ideal for data analysis on your financial model assumptions. Like some people I've seen on BP say "Oh I'll get 70% occupancy according to AirDNA" in a market area I knew most properties in the 25-75th percentile were doing 45% occupancy and then top performers (75th-99th percentile) were doing 55% occupancy. Just check with as many sources as you can, maybe even call up management companies to see what they say. There's a negative bias on BP for using management companies but some of them have the #'s that you seek. Good luck!

Fairplay made the list because you get more bang for your buck there. You're still within 30 min drive to the Breckenridge slopes, but also have better access to 14ers to climb in the summertime. High 6 figure condo's in Breck are going to be at the mercy of limited 'customization' since the COA will limit your ability to deck out with amenities (hot tub, games in the yard, firepit) by the nature of how condos are set up whereas Fairplay/Alma cabins you can do those things to your liking with the plot of land you get with the purchase. Condos in Breck are purpose built for ski season, then have a lack of draw in the shoulder season & lower occupancy in the summer than a cabin would. I've had Fairplay on my personal top 10 list. I think at this point it's just a matter of inventory and "Can you even buy something?" The Valley of the Sun neighborhood is set up with a lot of vacation rental properties. 

Grand Lake, Tabernash and Granby area is also noteworthy. I'm a bit concerned about the price appreciation there and the NIMBY issue with locals not wanting vacation rental saturation eating up the housing supply. It has same fundamental play as a Fairplay/Alma <> Breck with the proximity to Winter Park and access to skiing. 

Steamboat actually has the strongest occupancy % performance of all the Colorado ski towns, but not sure what current inventory looks like. 

Buena Vista could be an intriguing spot, but performance tends to dip a little since it's not super close to any ski areas that are located to the north. 

Vail: too expensive. Estes Park: Super regulated and exclusive management issues. Black Hawk/Evergreen/Idaho Springs: heavily regulated. Glenwood Springs and anything west of that: too far.

Hope this helps

Banks get a little wary about the newfangled VBRO's (sic) but if you've got a local bank that "gets it" , it might help your value you want to sell it for from a commercial standpoint in the future

AirDNA is notoriously bullish on their property estimates. Garbage in, garbage out. I think your worst case scenario of having 60% occupancy (or 40% vacancy as you want to put it)  is still high. I'd check with other data resources to confirm your assumptions. 

@Samuel Affhauser I've consulted on this topic for a number of years. I'm only familiar with domestic markets but message me if you want to chat more.