How Quirky is YOUR Property? (My two cents from a Branson perspective)

Question

I started investing in Branson in 2008, and the trends have changed dramatically since then. Guests used to be satisfied with the more ordinary, nice, and clean properties. If you had a luxury product, you knew yours would book, as well—as long as it was managed well and CLEAN. Most of the inventory in my area (Branson, MO) consisted of condominiums with a smattering of houses. The biggest vacation rental house at the time was a massive 7 bedrooms. In 2018, I had the opportunity to be on the cutting edge of something new—I bought one of the first 9-bedroom lakeview properties in the Branson area. It was unprecedented…a new development of mostly 9-10 bedroom homes only. As you can imagine, I wondered if anyone would even book it since there were no homes currently on the market to compare it to. I wondered: are mid-size groups coming to Branson regularly? Are there really that many multigenerational families visiting our area, and will they be coming year-round?

Thankfully, the answer to all of my questions was a resounding: yes! The first full year of being open, we generated approximately $180,000 in revenue, and our equity went gang busters. So, we bought a second 9-bedroom in the same development (and during Covid—another nail-biting story entirely). The second one also booked incredibly well, and a year in advance to boot!

The trend had taken root, and more and more of these large, luxury homes built up around the Branson area. Lake-view became the new sexy thing to invest in. To be competitive you also had to have a hot tub. And then you had to have arcade games. If you had outside space for kids to play, that was a bonus. Swim spas or indoor pools became the newest trend. And why not? If your budget and imagination can handle it, guests seemed to love it. Today, there are properties with indoor basketball courts, lazy rivers, movie theaters, and exterior spiral slides going from the upper deck to the lower deck...truly creative ways of grabbing the first round of renters.

Even though my rents were steady because I had a hefty repeat renter business by then, I realized that this trend of having a large luxury home was not enough if I wanted to capture more renters. We will always have a need for large, luxury homes, as well as smaller condominium units. There is also a group of renters who are looking for a unique experience. Although themed houses aren’t massively popular locally (or maybe we haven’t gotten there yet), data suggests that unique properties that offer something special or that are a different type of construction seem to becoming increasingly popular.

Are you noticing the same thing? I’d love to hear what you are seeing in your neck of the woods.

Andrew Steffens · Answer

Speaking for Tampa, the answer would be it depends. The more urban markets clean and comfortable with a little patio still does well. Price drives these units as competition is up from previous years. The beach areas, clean and comfortable with a functional pool used to do just fine, now you must be renovated/modern, heated pool, etc to be in the top 10%. Large homes do better as the bar is higher and competition is less. Luckily we are not where Orlando is and need to theme out houses etc. If you hit all the best practices checkmarks i.e. maximizing the space, renovated, great outdoor space, pro photos, priced competitively, you will do fine!Gone are the days of half updated houses with used furniture and cell phone pics.

Chris Watson · Answer

Branson is a little behind the Smokies (PF/GB/Sevierville) market. This is exactly what has happened. So to be in the top 10%-15% you need the quirky. I was one of the first in the area to build a modern home about 6yrs ago, now people are looking at me wondering why my new builds are not modern. Modern is now over 50% of the new builds. Next trend is A frames. They will be over built too. You either need to be quirky or accept you will probably not be in the top 10%-15%. It is interesting to see in the Smokies 8 to 12 bedroom homes are not getting that much more income than 4 to 5 bedroom BUT has 4 to 5 bedroom been overbuilt as they represent majority of the building permits? Possibly as they also represent a large percentage of new builds. All this to say, numbers must work without a quirk because today's quirk will become a non quirk as people look at their competition and one up each other or copy what they see.

Jon Martin · Answer

Where I invest the bar is much lower, thankfully! I like being able to stand out by being a few notches above the median performing listing. All of that stuff sounds fun but also incredibly time and capital intensive. Would be interesting to see the actual numbers that those listings produce relative to the input. One thing that seems to be universal across markets is the ROI of the higher bedroom count. Makes sense, because if someone is searching for that and you have 4-5+ bedrooms it wipes out 90%+ of the competition in most markets.

Theresa Holl · Answer

Congrats on your success. It's totally in line with what AirDNA predicted for 2024 as well. The forgettable $175 ADR listings will struggle but high end and eco are doing well. You really have to be different these days.

Carolyn Fuller · Answer

My STR was designed to appeal to a large audience so I can't speak to the STR market but I suspect that it is not all that different from the MTR market. We have an MTR unit that we designed to meet our unique dream unit and the niche audience of like minded people LOVE it. Everyone seems to be ready to pay premium price for it but some people truly love it which is very satisfying. I have to say, managing this uniquely designed unit is so much more fun than managing the one designed for the mass market.

Kelly Worley · Answer

oooh, I love that! I bet you have a lot of repeat guests. :)

Michael Baum · Answer

Hey @Kelly Worley, our lake house features...the lake. I find that is more than enough to keep us booked for the season.I don't feel the need to add any kind of gimmicky "feature" that some might find "Instagramable". We cater to families and groups of bike riders for the trail. Pretty simple for us really.