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The Future of Phoenix Short Term Rentals (AirBnb)
At least once a week, I got a message on here from an investor looking to buy a condo or townhome to use as a short term rental for AirBnb in the Phoenix Metro Area or Flagstaff.
Having discussed the pros and cons with numerous investors multiple times, I thought it would be appropriate to share some of the information I’ve learned with the rest of the BiggerPockets community here on the forums.
The Lure of Phoenix Short Term Rentals
Short term rentals are the latest hot trend in real estate investing, and it’s easy to see why. There are lots of upsides to choosing this strategy:
- Lower entry point for pricing (since it’s mostly condos)
- Can experience higher returns than LTR, especially during high tourism seasons
- AirBnb has made it easier than ever to book your property
But despite all this goodness, I can’t help but issue at least a word of warning regarding the future of Phoenix area short term rentals.
Disruption = Legislation & Regulation
AirBnb has been not only a complete disruptor to the hotel industry, it’s also been a disruptor to local neighborhoods and property owners.
And with that, comes lots of regulation.
South Lake Tahoe recently passed a ballot measure essentially banning most short term rentals.
And Laguna Beach just did the same thing:
https://www.latimes.com/socal/daily-pilot/news/tn-dpt-me-lb-council-20190505-story.html
“We don’t want commercial ‘touristification’ in our residential neighborhood,” said resident Charlotte Masarik.
Ok, well that’s not Arizona… but rumblings of similar complaints are happening in Flagstaff as well:
And Phoenix too:
So let's take a look at what laws regulating short term rentals are already in place.
Current Arizona Legislation
In 2017, a law was passed declaring that cities, towns and counties cannot place any restrictions on short-term rental properties just because the property is not classified as a hotel.
This law specifically targeted any municipalities that were trying to restrict Airbnb and other online lodging marketplaces from operating in the area. The law states there are no restrictions on the number of properties an investor can own and rent using these short-term online rental services. Neither is there a limit to the number of days a home can be rented out in a given area.
On April 11, 2018, Arizona enacted Senate Bill 1382 that requires any online lodging marketing places operating in Arizona to remit all state and local taxes. This clarification means that the individual property owners do not need to individually collect and pay any additional taxes. The online services would be responsible for collecting these taxes from any renters and making payments to the state and local authorities.
https://legiscan.com/AZ/text/SB1382/id/1738135
Fantastic news right?
Well… not everyone was on board with those decisions…
"I didn't move into a neighborhood to have the house next door to me turned into a weekly rental property,'' said Sen. John Kavanagh, R-Fountain Hills, in voting against the measure.
"We feel the same way at the local level,'' Sedona City Attorney Robert Pickels said. "The city of Sedona feels very strongly that the characteristics that are unique to Sedona and preservation of those characteristics are left to the city of Sedona.''
Pickels reminded the legislature of Arizona's claim to state's rights when objecting to federal legislation is proposed for Arizona, and that local municipalities should have the same rights.
But that fell on deaf ears, as in signing the measure, Gov. Doug Ducey said the legislation provides "financial breathing room'' for families by allowing them to earn something extra.
(Remember that line… it’ll be important in just a bit.)
With the OK from the government, investors nationwide hopped on the gravy train and starting buying up properties in AZ to rent on AirBnb.
But soon after the complaints piled up from neighbors and fellow residents:
Soon after came the renters, who brought an increase in noise, traffic and even recreational use of marijuana, according to the neighbors.
"We were all on edge," neighbor Holly Keeble said. "It was taking away our quiet enjoyment of living."
https://www.azcentral.com/story/news/local/phoenix...
And now new legislation is headed your way…
Proposed Arizona Legislation
A bill with the backing of 57 Arizona lawmakers from both parties aims to add new regulations to short-term and vacation rental properties like on AirBnb.
House Bill 2672, sponsored by Rep. John Kavanagh, R-Fountain Hills, adds restrictions on the number of people allowed in a short-term or vacation rental property and would require the installation of security equipment, among other additional regulatory measures.
https://www.azleg.gov/legtext/54leg/1R/bills/hb2672p.htm
“REQUIRING THE INSTALLATION OF SAFETY AND MONITORING EQUIPMENT THAT MONITORS AND DETECTS THE LEVEL OF NOISE AND NUMBER OF OCCUPANTS ON THE PROPERTY AND THE TRANSMITTAL OF THAT INFORMATION TO THE PROPERTY OWNER OR MANAGER.”
Uhmmmm… you mean like cameras? How else are you going to determine how many people are in the property at any given time? Say hello to Big Brother!
Perhaps some other solution will be proposed (body odor sniffing technology anyone?) but if it's cameras you can bet those vacancy rates will go sky-high as tourists opt for hotels where they can sleep, dress and knock boots in private.
Although, Representative Kavanagh has stated this bill is to target the “major abusers” who host parties and large events in properties that are not intended for that use. So perhaps it will only be if you receive violations or complaints.
"This was sold as a bill to allow individual homeowners to make some extra cash on the side," Kavanagh told The Republic in October. "Unfortunately that morphed into large investment groups (aka you reading this) pooling their cash, buying homes and creating party houses and catering to drunken golf outings."
But here’s the whopper:
“RECEIVES NOTICE OF THREE ADDITIONAL VERIFIED VIOLATIONS OF A CITY'S, TOWN'S OR COUNTY'S APPLICABLE LAWS, REGULATIONS AND ORDINANCES WITHIN THE TWELVE‑MONTH PERIOD AFTER THE SUSPENSION ENDS, THE DEPARTMENT SHALL REVOKE ALL OF THE ONLINE LODGING OPERATOR'S TRANSACTION PRIVILEGE TAX LICENSES.”
If a property gets enough verified violations, the license to rent like this would be revoked.
Meaning if you rent your AirBnb during Spring Training and your tenants get a little too drunk and rowdy a few times, you’re screwed. Property goes back on the market and you’ll have to pay the costs of sale, or switch to long term rental.
This bill isn’t finalized yet, but it’s coming. And these kind of punishments will definitely be included.
HOAs Can Still Ban Short-Term Rentals
Before you purchase an investment property with the goal of using a short-term rental service to generate cash flow, you want to make sure to carefully review the rules around this option if the property has a homeowner’s association.
Land use restrictions within the homeowner association’s governing documents arises under contract law. Therefore it is still legal for the homeowner’s association to place restrictions on the length of a lease or completely ban short-term rentals.
An investor should work with a real estate attorney to make sure that their desired income strategy for the home falls within the HOA CC&Rs before moving forward with any purchase. AND make sure that it would require substantial majority to overturn short term rentals if already allowed. Attitudes can change.
Regulating AirBnb Drives Down Local Rents & Housing Prices
Remember that line about wanting to give Arizona families “breathing room”?
Well, a recent study of LA county showed that regulating AirBnb could help lower rents and home prices.
https://voxeu.org/article/short-term-rentals-and-housing-market
There’s already pressure from current homeowners on the noise, and now you may get added pressure in the future from potential tenants and owners about prices.
“There are clear distributional implications of the home sharing ordinances. We show that rents will decrease due to the home sharing ordinances, so the average renter will gain. Because of the home sharing ordinances, homeowners lose, while renters tend to gain. This offers a plausible explanation as to why cities around the world that have heavily restricted short-term rentals typically have a high share of renters”
So it's also going to depend on the owner/renter percentages of your community what the attitude may be towards short term rentals. Be sure to take that into account if buying in an area with an HOA.
Caveat Emptor
I don't mean to come off like I'm sounding the alarm on STR's in Phoenix or Arizona and saying they're no longer a viable investment strategy or about to be outlawed.
I’m just reminding potential investors that there is current legislation in the works, and will undoubtedly be more legislation to come in the future.
And while some investors and families will certainly enjoy the “breathing room”, complaints from local families will be ten times louder.
You probably won’t show up at the local town hall meeting to tell everyone why STRs in your area are a great idea...
But the super pissed off soccer mom next door will, along with a story about how one of your tenants oogled her teenage daughter and made her scared and now they now longer feel safe there. That's headline material that will easily sway public opinion.
As ridiculous as this sounds, all you need is one murder or rape case in a short term rental to bring forth an avalanche of new legislation (background checks for renters?).
And don't think people aren't that stupid. This man killed six people while driving for Uber. He claimed a “devil figure” on Uber’s app was controlling him on the day of the shootings.
https://www.theguardian.com/us-news/2019/jan/07/uber-driver-michigan-kills-six-guilty-plea
So there is A LOT outside of your control:
- You can't control future legislation.
- You can't control your tenants and the complaints they may get you.
- You can't control how your neighbors will vote to change the HOA.
Of the 13,000 single family homes for sale in the Phoenix metro market, 9,000 have an HOA. So you've got roughly a 75% chance of having your HOA vote to ban your short term rental.
So when a first time investor asks me about this, after telling him all these details I ask “Does that sound like a scenario you’d want to make a $200k bet on?”
For most of them the answer is no.
But at the end of the day, DO YOUR DUE DILLIGENCE. Far more than you normally would.
This strategy has worked for many an investor, and shall certainly work into the future. But if you buy into the wrong neighborhood or manage your property poorly, you could be in for a world of hurt.
PLEASE SHARE YOUR THOUGHTS:
1. Do you own a short term rental or know someone who does?
2. Do you think short term rentals should be restricted or regulated in any way?
3. What’s your best advice for investors looking to get into short term rentals now?
And I thought the main 'disruption' to Phoenix AirBnb's was summer heat? ;-)
@Wes Blackwell Wow, very comprehensive Wes, thank you!!
Thank you for the great breakdown @Wes Blackwell.
In my personal opinion, air b&b's work great in certain areas and not so much in others. If I were to get into owning an air b&b I would want to make sure the numbers worked for a standard rental as well for a back up plan. Lots of uncertainty right now.
@Wes Blackwell thank you for a great post! This is a very comprehensive overview of the short-term rental market here in the Phoenix metro. I also see a ton of people being lured in by the high returns of the STR strategy here, and many of them are not taking all of these factors into consideration when they need to be. At least if they plan on using this investment strategy for the long term.
1. I have 3 short term rentals here in Phoenix.
2. I am obviously a little bias, but I feel some of the regulations that are being considered and already imposed in other cities is too much.
It is very easy for people to push horror stories and say that short term tenants are going to disrupt the neighborhood with noise, traffic, parties and god forbid smoking weed. Although, the same thing could very easily happen with a long-term tenant, or even a neighboring property owner. I have experienced this personally on multiple occasions. Growing up I lived in a very safe middle-class neighborhood in Billings, MT. My neighbors across the street (who owned their property) had an older son who sold drugs from their home. Heavy flow of traffic, cops regularly coming to the property, and all of the other complaints people have about short-term tenants applied. More recently, I lived in a condo here in Downtown Phoenix in a small tight nit community of residents where the HOA banned short term rentals. While living at the property, my neighbor (who owned the property) got a new boyfriend who loved to party. At least 3 times a week they would be blasting music until 4 in the morning or even later. We approached them multiple time asking them to keep quiet and it still kept happening.
The worst part about these situations is at the end of the week these people didn't leave to return to their home. This was their home, and we were stuck dealing with them as long as we lived there or either of us decided to move. In both of these situations I would have gladly replaced my neighbor with a short-term rental knowing that this stuff would happen occasionally, but most likely not nearly as frequently as we already had to deal with them. 95% of our guests are respectful and we never hear any complaints about them from neighbors. This may be different in areas that are more conducive to parties, such as Old Town Scottsdale. Although, from our experience we have very rarely had the nightmare guest that is described in all of these claims.
I also feel that it is easy for people to demonize "large investment groups" that are coming in and destroying their neighborhoods. From what I have seen locally most of our competition in the short-term rental space is individuals with a few properties being ran as short-term rentals like ourselves, or individual owners with only one property. In all reality, it seems like these people are trying to pool small investors, including many here on BP, with large "evil" corporations. There are a couple big players such as Wander Jaunt and Sonder. Although, Sonder seems to stick to partnering with larger apartment complexes in listing a few of their units. Wander Jaunt is a little more across the board with their rentals.
Also, many property owners I see doing short-term rentals are renovating their properties substantially before listing, us included. Many of our neighbors are very happy to see improvements being made to dilapidated properties next door, bringing up the value of their neighborhood.
I can understand and see many points being made against short term rentals. Although, I feel that some of the claims are sometimes a stretch and could easily be flipped to a bad long-term tenant or property owner.
This may be a little more than what you wanted to hear, although this is my two cents on the situation.
3. My advice to investors looking into this strategy is to look into all aspects that you outlined in your post. Pretty simple. Do not buy a property in an HOA as they can easily shut you down. Make sure any property you purchase makes sense as a long term-rental as well so if any future regulation comes down on AirBnBs you have a back-up strategy where you don't have to sell in a potentially down market. Also, try to find a property where you can add value so when you do end up selling (forced or by choice) you have additional margin.
Great points. I think that with STR here in Phoenix, the main issue comes down to the tendency for tenants to not treat a property and their neighbors with as much respect as an owner would, and the neighbors' assumption that if it was an owner instead of a tenant they wouldn't have this problem.
You could get a bad neighbor who owned the property, and people would just consider them a bad neighbor. But with AirBnb if you get a bad tenant, the neighbors will blame the fact that it's a STR and if only it was owner-occupied things would be so much better. We both know there's no promise in that.
The coming legislation looks fairly light, but could be added onto later in the future. Seems like the state is trying to be pretty loose, but cities and HOA's are pressuring for more regulation & self-control.
We'll probably have to wait another year or two after the coming bill passes before further regulation. The big hammer would be if enough complaints came in and the state suddenly allowed local municipalities to regulate. That's when I think bans and heavy regulation would come fast and swift.
So like you said, buyer beware, know all of the issues going in and have a backup plan just in case. Great post!
@Wes Blackwell I really enjoyed reading your detailed post! You've brought up many key points and I wanted to put in my 2 cents for what its worth. I live in CA, and for the past few years began investing in AZ. I noticed you are a Sac native and as you know, good deals and cash flow have become much harder to come across here in the valley so it brought me to look into different investment strategies.
With that being said, I do own a few STR's in the Old Town Scottsdale area. With the SB 1350 being signed in 2016 by Gov. Ducey, it gave me SOME peace of mind & definitely brought in a ton of new investors to the Phoenix market. This is because an actual law has already been set in place in Arizona (majority of other states have done the complete opposite) and makes it much harder to overturn at this point. For example, house bill 2672 sponsored by Rep. John Kavanagh that you mention started off with a many regulations including the addition of safety and monitoring equipment to detect noise levels and occupancy. This all got thrown out, and the only regulations that were actually approved (minus providing the city contact info) were directed to special event, and party houses, etc. From what I heard, this was due to receiving a ton of push back from investors.
Sure you can't control future legislation... BUT, with the law and regulations already set in place, I feel as if the state has already put themselves in a pickle if they try to add any type of harsh regulations at this point due to the amount of active investors already in the game that will push back. Let alone the push back, look at proposition 207 called the Private Property Rights Protection Act that was passed in 2006 in Arizona. This is a law that requires the state, county, or city, to pay compensation when a land use regulation results in any decrease in a landowner's property value. With SB 1350 being passed to use their property as a short term rental, any regulations being added restricting that right would cause the state of Arizona to incure HUGE liability for property value loss to everyone who owns property in the state whether they were using it as an STR or not. Knowing this, I highly doubt the state of Arizona would put themselves in that situation.
As @Chris Pike mentioned, many STR investors are adding tremendous value by purchasing and renovating these properties from the ground up. A STR is cleaned after every checkout and this reassures the investor that their investment is always kept in tip top shape. You can't really say the same when you sign a 1 year lease to a tenant. In theory, this is drawing the values of the neighborhood up with higher comps. As an owner living in the same neighborhood, wouldn't you like to see the value of your home continue to increase? Don't get me wrong though, I can see why neighbors see it as a nuisance but again, as @Chris Pike mentioned, you can always have that bad "long term" neighbor that never leaves so it goes both ways.
At the end of the day, there is risk with ALL real estate investments, (STR's being a little more risky) but I make sure to let all my clients know to run the numbers on a worst case scenario and make sure it still pencils as a long term rental.
One question I get asked a lot is if the Phoenix market has become over saturated with STR's. According to AirDNA, in Q1 2018, there was 5,174 active STR's in the city of Scottsdale. In Q1 2019, 6,032. Roughly 1,000 STR's have been added in a years time. Sounds like a big jump right? But the UNDERLYING question should be - How many travelers have converted from using hotels to vacation rentals between those same dates? Something to definitely think about...
@Wes Blackwell Thank you for the nice breakdown.
@Andrew Narsi Wow, thanks for the great info, Andrew!
I have a listing coming on the market soon (less than 2 weeks) in Old Town Scottsdale walking distance from Fashion Square Mall, The District and Sprouts that will make the perfect STR and I want to be able to inform potential investor buyers of the legislation regarding vacation rentals in Arizona.
My strategy is to market it as a potential STR as well as an owner-occupied for those who may want to house hack their high-end digs!
Do you have a management company you use here in AZ?
@Chris Pike Excellent post Chris, thank you!
I know investors making close to $1000/week on their high-end downtown Phoenix STRs! Are you seeing those kinds of numbers?
Well said @Andrew Narsi!
@Wes Blackwell great summary post! I own roughly 20 STR throughout the state. I had one in a high end HOA complex and the neighbors lost their mind and the HOA battled me until I just sold it and moved on. I have another in an HOA for 4 years with no issues. Today, I would not do a STR in an HOA community, not worth the aggravation. The neighbor backlash is ridiculous in my opinion. My guests pay upwards of $4000/month in the peak season. These are travelers with disposable income that I have found generally respectful. Every STR tenant issue I have had has been with longer term stays that were probably an evicted local with no where else to go and my inability to screen them properly.
By far my biggest issues are regular long term tenants. These are neighborhood destroyers. By definition a tenant in AZ paying a $1000 monthly rent is most likely paycheck to paycheck, will not maintain landscaping and will end up being the bad neighbor. You can't compare this tenant to the STR tenant. Yet there are no restrictions on a long term tenant. Futhermore, the STR model increases demand for housing and as such home prices. The not in my backyard owner simply doesn't understand this.
AZ was supposed to be the bastion of the gig economy yet we are falling prey to the same demonetization of the industry as you see in CA. I live in Fountain Hills and will certainly be letting Rep John Kavanagh know my position. Where else do you see a conservative republican mandating such outrageous regulation on an industry? This is the hotel lobby at its best, they are alarmed at how many homes are coming to market and the effect it has had on the demand for their hotel units. At the end of the day, the best strategy is owning an entire small multifamily and using those as STRs. In this scenario the hand of the government shouldn't touch you. This is the only way I would consider growing this business.
Originally posted by @Andrew Narsi:
@Wes Blackwell I really enjoyed reading your detailed post! You've brought up many key points and I wanted to put in my 2 cents for what its worth. I live in CA, and for the past few years began investing in AZ. I noticed you are a Sac native and as you know, good deals and cash flow have become much harder to come across here in the valley so it brought me to look into different investment strategies.
With that being said, I do own a few STR's in the Old Town Scottsdale area. With the SB 1350 being signed in 2016 by Gov. Ducey, it gave me SOME peace of mind & definitely brought in a ton of new investors to the Phoenix market. This is because an actual law has already been set in place in Arizona (majority of other states have done the complete opposite) and makes it much harder to overturn at this point. For example, house bill 2672 sponsored by Rep. John Kavanagh that you mention started off with a many regulations including the addition of safety and monitoring equipment to detect noise levels and occupancy. This all got thrown out, and the only regulations that were actually approved (minus providing the city contact info) were directed to special event, and party houses, etc. From what I heard, this was due to receiving a ton of push back from investors.
Sure you can't control future legislation... BUT, with the law and regulations already set in place, I feel as if the state has already put themselves in a pickle if they try to add any type of harsh regulations at this point due to the amount of active investors already in the game that will push back. Let alone the push back, look at proposition 207 called the Private Property Rights Protection Act that was passed in 2006 in Arizona. This is a law that requires the state, county, or city, to pay compensation when a land use regulation results in any decrease in a landowner's property value. With SB 1350 being passed to use their property as a short term rental, any regulations being added restricting that right would cause the state of Arizona to incure HUGE liability for property value loss to everyone who owns property in the state whether they were using it as an STR or not. Knowing this, I highly doubt the state of Arizona would put themselves in that situation.
As @Chris Pike mentioned, many STR investors are adding tremendous value by purchasing and renovating these properties from the ground up. A STR is cleaned after every checkout and this reassures the investor that their investment is always kept in tip top shape. You can't really say the same when you sign a 1 year lease to a tenant. In theory, this is drawing the values of the neighborhood up with higher comps. As an owner living in the same neighborhood, wouldn't you like to see the value of your home continue to increase? Don't get me wrong though, I can see why neighbors see it as a nuisance but again, as @Chris Pike mentioned, you can always have that bad "long term" neighbor that never leaves so it goes both ways.
At the end of the day, there is risk with ALL real estate investments, (STR's being a little more risky) but I make sure to let all my clients know to run the numbers on a worst case scenario and make sure it still pencils as a long term rental.
One question I get asked a lot is if the Phoenix market has become over saturated with STR's. According to AirDNA, in Q1 2018, there was 5,174 active STR's in the city of Scottsdale. In Q1 2019, 6,032. Roughly 1,000 STR's have been added in a years time. Sounds like a big jump right? But the UNDERLYING question should be - How many travelers have converted from using hotels to vacation rentals between those same dates? Something to definitely think about...
The way I see it is that professional Airbnb/STR investors make an area more valuable because they keep the properties in top shape and attract better people to the neighborhood.
So we are actually in the midst of HOA trauma with our STR. I'd be interested in anyone's input as to how to deal with HOA boards. We checked with the HOA Management when we purchased and were assured that the portion that gave me pause, was not referring to AirBNBs but bed and breakfasts. A new management company and board is in place.
Everyone has that one neighbor? I have found ours. She took to a social media app and began enlisting neighbors to climb on board her accusations of "party house" "every weekend". For the record, in AZ Summers ..It would be nice if we rented more, but being new at this especially, we had 3 guests other than us, and our family. The three renters were all families of 4 to 7. No parties were had. One guest was noisy in the pool past 10 PM. at 10:03 THE neighbor called the police. (not us of course).
We aren't big time investors. This house is our retirement home someday. We rented about 110 days in 14 months of ownership. We occupied the property 150+.
The HOA meeting to discuss our "party house" is Saturday, August 24th. We are flying down to be there, although a letter from the HOA did not arrive until yesterday (August 21st). We've just paid a retainer to an attorney to look over our CC&R's and maybe draft a letter for us.
We could use all the advice you can give.
@Laurie Hatfield: First, take a deep breath! Just because one neighbor is "THAT neighbor" doesn't mean the HOA will amend their bylaws or come down hard on STRs. It's been an ongoing issue here in AZ, and it will continue to be. There will be battles. That doesn't mean you'll never be able to STR your property!
At the HOA meeting, I would be prepared to counter "that one neighbor's" allegations with evidence. It appears she is the only one who complained. There doesn't appear to have been any police intervention. (This is an important fact that proves her 10:03 call to police was absolutely uncalled for.) She has little - if any - ACTUAL evidence that this is a party house. She will come into the HOA meeting foaming at the mouth. This will only prove just how unreasonable she is. Let her rant and rave. You will then calmly present evidence that there is not, in fact, a problem.
I can't promise what the HOA board will do. But don't freak out or let one neighbor get you down!
@Pamela Sandberg : I'm grateful for your input. I’m trying hard to exhale LOL
I hope beyond hope you are correct. I'm concerned that she's gotten other neighbors involved through a social media app call NextDoor. From what I read (I had to download the app to see it) some neighbors near and far are coming with their theoretical pitchforks and torches to the HOA meeting. "To DEMAND that STR's not be allowed".
The management and board have changed since we were told the interpretation of the CC&R's. The new board is hung up on the words that disallow a bed and breakfast. That is the exact section I called to ask about before we purchased. My novice brain thought the same thing. I was assured STR and Bed&Breakfasts are not the same. And that the section which discusses intended use, (personal vs business use) and the ability to lease the property are the sections that do apply to our use of the property.
I might add, we’ve given our contact information to several neighbors. Not this one, as we’ve never been able to catch her home, or if she is she doesn’t answer the door.
We’ve tried to mitigate whatever issues the neighbors had discussed on the app. We put a timer on the back yard lights so after 9:30 Pm the lights will go out. We posted a not very welcoming :( sign on the fence behind the pool that states pool quiet hours and the warning that the neighbors may call authorities after 9. And we installed NoiseAware to monitor noise.
I’m not sure what else we can do. But as you suggest, take a deep breath …and maybe pray.
:)
Update: So far so good. We consulted an attorney who says our HOA CC&Rs are clearly in our favor. There is nothing to prevent short term rentals. This, of course, is the opposite of what we were told at the meeting, and in writing.
I'm not sure what happens next but ... here we go. We will continue to host in our home.
@Laurie Hatfield That is great to hear! Good work.
there is a role for AirBnB and VRBO in the market, hotels have led to their own demise ($40 plus resort fees for coffee in your room and safe access and the pool) and there is a need for Rental owners to be responsable, i just sold a home in scotsdale with https://www.airbnb.com/rooms/22583822?source_impression_id=p3_1568819338_dRxPUAijOd2TOdSO behind it, buyer was worried about the noise, watched 8 cars park there and loud parties, airbnb didnt care and the owner collects its fee, the outcome was a reduction in value on our home by $15000
Be responsable, be a good neighbour
This is great. Very eye opening. Here I was just thinking about buying property and have long term tenants. This changes the game for me!
Thank you @Wes Blackwell for starting this post - great info on how the legislation could potentially impact the STR market here in AZ. Very helpful! I purchased my first rental this year in Old Town Scottsdale. When I was renovating this townhouse, the neighbor came over to "introduce" herself and let me know how they will fight me every step of the way if the property becomes a STR (they have had a bad experience with unit next to them). It didn't necessarily detour me, but certainly become a factor to consider. I would hate for that neighbor to sabotage my bookings/stays, especially when reviews are so crucial starting off. I decided to get long term renters in there and cash flowing well. I am still very interested in doing a STR in the valley (and in N AZ). When working the numbers it seemed that although Jan-May are huge months in Scottsdale for STRs, it falls off a cliff in the summer/fall. So the net-net didn't seem too much different vs. a long term rental. @Andrew Narsi and @Serge S., what kind of vacancy rate do you see in summer/fall compared to prime season?
@Wes Blackwell, great thought-provoking post!
My husband and I own and syndicate hotels here locally and keep a close watch on all regulation and proposals. Our hotels are in the limited service space focused on the business traveler. No resort fees, no charging for parking or no costs for amenities that business travelers require like wifi. We are in the convenience space and I see STRs (at least in Scottsdale) as being in the experience space.
I've been leading a local meetup for women investors and I host a weekly podcast.... I've noticed that most of the new investors I meet are interested in STRs versus other niches like wholesaling and fix/flipping. My episodes focused on STR have been some of the most popular.
I wonder if there's too much hype and perception that STRs are "easy money"? And, will the newer investor buying their first STR have more exposure with higher home prices (which don't pencil out for LTR) less marketing longevity on STR platforms & social media accounts and potential regulation changes?
Originally posted by @Nichole Stohler:
@Wes Blackwell, great thought-provoking post!
My husband and I own and syndicate hotels here locally and keep a close watch on all regulation and proposals. Our hotels are in the limited service space focused on the business traveler. No resort fees, no charging for parking or no costs for amenities that business travelers require like wifi. We are in the convenience space and I see STRs (at least in Scottsdale) as being in the experience space.
I've been leading a local meetup for women investors and I host a weekly podcast.... I've noticed that most of the new investors I meet are interested in STRs versus other niches like wholesaling and fix/flipping. My episodes focused on STR have been some of the most popular.
I wonder if there's too much hype and perception that STRs are "easy money"? And, will the newer investor buying their first STR have more exposure with higher home prices (which don't pencil out for LTR) less marketing longevity on STR platforms & social media accounts and potential regulation changes?
Hello! @wes Blackwell made a very wonderful post that brought up many good topics that should be considered by the experienced and new investors. I am a beginner investor in the research phase of my career and actually plan on becoming an investor in Phoenix. I currently live in Fl, but am soaking up as much information on REI and the Phoenix market as possible, as you can see. Haha!
I noticed that you have your own podcast for women and just had to jump in and ask what might that be?
I’m female and am very interested in linking with other individuals in my same boat and area as far as investing is concerned. I’d like to understand if women really do get treated differently and have different experiences than men in the industry and if so, how do they handle their business?
@Aaliyah Iman thanks for the question! My podcast actually is more geared towards people who work in Tech.
BUT -- the group I mentioned is part of the InvestHER community. The founders of that community have a podcast focused on women who want to invest in real estate as well as local Meetups across the US. A good place to start and get connected both in Florida, online and in Arizona is on the facebook page - InvestHer Community
https://www.facebook.com/groups/Investhercommunity/
Originally posted by @Nichole Stohler:
@Aaliyah Iman thanks for the question! My podcast actually is more geared towards people who work in Tech.
BUT -- the group I mentioned is part of the InvestHER community. The founders of that community have a podcast focused on women who want to invest in real estate as well as local Meetups across the US. A good place to start and get connected both in Florida, online and in Arizona is on the facebook page - InvestHer Community
https://www.facebook.com/groups/Investhercommunity/
Oh, okay I see.
Thank you so much! I’ve put my request in so hopefully they’ll accept it.
