All Forum Posts by: William Beck

How's La Quinta from a regulations standpoint looking recently? I had the impression it was the most STR friendly of the Coachella Valley area but haven't heard how it is recently.

Just sharing my opinion but 1/1 STR's are limited on upside earnings potential because the ADR is capped. You can't charge guests $500/night if you're only sleeping 2-4 people. (and you don't want to smash 8 people in there for obvious reasons) You mention an upstairs/downstairs split which is going to mean the lower guest or tenant is going to be at the mercy of the noise generated above. If you've got a long term tenant in the 1/1 and STR guests above, that might be a bit of an annoyance and cause some potential issues.
I'd personally go all-in on renting as a 4/3, one listing. You've got ability to charge a higher rate for the property as a whole gives you much more appeal than having a vacation rental with shared space. It will cost more to furnish but be a more attractive place for guests to stay knowing they have the whole place to themselves. Maybe do some # crunching on what you can generate with 2x LT renters vs. what a 4BR STR generates. Let me know if you need any help. 

Since short term rentals are just different than hotels from a staffing & operational standpoint, you should be fine with just a clean once they have vacated the property. If they want someone to clean up they can always request it and pay extra for it!

Great timing! I'm sure you could sell them today for whatever you bought for + 25% maybe even more. Awesome to hear and keep it rolling

Beware of potential cannibalization  with a multi-unit short term rental. Sometimes they can work, but if you've got a 4plex for example that doesn't have a ton of competition in the area in general, you're basically having Property listing #1 vs #2, #3, & #4. I've seen some highly successful duplex & fourplex's, but have also seen cases where a 12 unit hotel converted to a bunch of 1BR Airbnb's just wasn't successful. 

Putting Logan, OH on your radar, That place does really well for STR's. Very random but true.

Data has been overinflated and numbers are aggressive from my experience. Potentially a mix of the data scraping taking into account blocked days on the calendar as true occupancy, and factoring fees as part of the ADR (average daily rate) I would say they have shown a material miss when it comes to data for properties that I had managed in the past. By a big factor. Take caution and beware of the AirDNA info. It's better than nothing but still compromised in my opinion. 

Just like you can guarantee someone will book your place if you charge $19/night. I'd be highly skeptical of the "G" word. Also agree that PM's like to share different #'s when it comes to vacation rental performance. It's just the nature of the degree of knowledge some people have (or don't have) with accounting.  Sometimes 'Profit' means gross revenue. Or sometimes gross includes taxes, cleaning fee, VRBO/Airbnb Fee, etc. Also, is profit including debt servicing or pre-debt servicing? You could be profiting $500/month, but if your mortgage is $700 you're netting -$200/month. Skepticism is warranted. 

The biggest hurdle for Hawaii is zoning/permitting restrictions, so if you've gotten past that and your numbers work out that sounds like a really awesome investment!

Just depends on if you get caught! ha. 
Agree with Jeff's comments on not being able to factor in income. I had a situation where a client was buying a short term rental with a 2nd home mortgage. It didn't appraise and it killed the deal. If they were able to do 20% down, the income the property was generating would have allowed a commercial appraisal but Fannie isn't in the business of investment financing.