All Forum Posts by: Ben Scarborough

Quote from @Jose Jimenez:

Hello all! I am currently in El Paso, TX. I will be moving in about 1.5 year and would like to buy at least 1 or two more properties before then. I am in the process of trying to locate a single family home right now to move into and rent out the one  I am currently living in. My question is, is it worth it to invest in a house with a pool, move into into it for a year or so then rent it our when I leave the area? I just don't have any experience with maintenance of how much of a headache it will become if ever with renters. Thank you all for your time!

There is certainly a ton of maintenance that comes with having a pool at your rental, however I think it comes down to ROI and making sure your liability insurance is pretty stout. How much are comparably sized homes with a pool pulling in revenue vs those that have no pool? You have a great opportunity to increase the value of the home by adding a pool as well. Focus on the numbers! If the numbers make sense, the numbers make sense.

Hey Alyssa, welcome to the STR world! If cohosting is how you are thinking you want to get your journey started, I would highly recommend binge watching the Real Estate Robinsons YouTube channel and listening to STR podcasts (I prefer Short Term Rental Secrets and Get Paid for Your Pad). Then begin joining Facebook groups in the areas you are interested in cohosting in. Let people in those groups know what you are all about and let them know how you can make their life significantly less stressful! Good luck and feel free to reach out if there is anything I can help you with!

-Ben Scarborough

Thanks for sharing Sloane! It was a fantastic conference and I highly recommend for anyone reading this. So cool to have been able to connect with some icons in the STR space and loved how easily accessible they were to talk to constantly throughout the event. Gained some invaluable information and created some invaluable relationships with several like minded investors. Looking forward to sharing my notes from the event with everyone on my STR email list!

Quote from @Joshua Furrow:

What website has the best data on occupancy rates, avg daily rate, revenue, etc for short-term rentals?

I almost always run my detailed analysis through AirDNA. However, due to its cost, I typically run my analysis of a market/home through a funnel...

1. Decide what cash on cash return works best for you. 20% is my bottom line. However, several investors are fine with less.

2. Select a market of interest.

3. Utilize a free market data software that will generate the details you mentioned, such as Rabbu, or the rentalizer tool on AirDNA, and run through several different properties that are on the market there. If these very general numbers check out, move to step 4.

4. Use a more affordable/reliable data software to dive into market of interest in more detail, such as STR Insights, Awning, or AllTheRooms. If numbers check out, move to step 5.

5. Buy zip code of interest in AirDNA. Look into how properties with a view or how properties that are waterfront are performing. How are the homes with multiple amenities performing vs homes with less amenities? There are several different things you can look at to then narrow down to what your target property should be in that market.

Happy to share my STR calculator I use and dive into this more with you if you would like. Feel free to reach out!

-Ben Scarborough

Quote from @Saranya Sundararajan:

Our first real estate investment and we want to get into STRs. Looking in the $500K-$750K price range. Have enough cash reserves. I want to start closer to the lower end of my budget ideally but I feel like the 1beds and 2 beds may not be the best investment in today's interest rate environment. Considering the smokies, PCB, maybe Blue ridge but not comfy with the fact that the STR rules are still developing and changing there.

I was keen on the Smokies market - due to 1) mature str market 2) People will always go there for vacation. Goal for my STR is to make positive net-income - atleast $15K-20K a year.

From my research, the smokies looks saturated clearly. I plan to self-manage. I saw this 3bed 2bath (although sold as 2bed maybe because of the loft) sold for $737K and the listing says the STR can bring it $100K (probably based on airdna rentalizer) : Recently sold $737K 

this is in my budget but i am curious - this feels very high to me for purchase price :$737K, putting 20% down, ADR says $376 a night and 71% occupancy ( giving rental revenue at $101K)

Operating Expenses

$ 32,621

Net Operating Income

$ 68,382 

CoC rate = 48%

If these are true numbers for a property like this then I might be in but wanted to see what other thought? What would be the more realistic returns? 

My criteria for the property would be - close enough driving to attractions, view must, Cabin, big windows into mountains kind of a feel, some cool things to offer - pool table etc

Thanks - I know the Smokies are a tough market and you really need to find a good property and I have time (I know which realtor I will likely work with) 

any other places I should maybe be open to?

If you are open to investing in a coastal short term rental, I would highly recommend checking out the gulf coast of AL and FL. I'm biased, but you will not find prettier beaches in America. I am originally from Atlanta and the combination between the nature parks, cleanliness, and the friendliness of locals quickly convinced me to make the move more permanent in the Gulf Shores and Orange Beach markets. More specifically, Alabama is a great option for STR investors in general due to being ranked the 2nd lowest state in the USA in property taxes. If you are looking for appreciation, the market still has significant amount of room to continue to develop and several new constructions are in the works. If you are looking to avoid seasonality, you can count on the snowbirds to swarm in from the midwest from January to March. Several more reasons I would be happy to discuss... Feel free to reach out!

-Ben Scarborough

Quote from @Dick O'Hare:

Thanks for the responses, guys. Let me rephrase. I have been doing STR's for a while now, so I am fairly comfortable doing them. But, they are my own properties. Co-hosting for someone else's properties would take on a slightly different set of skills (and responsibilities). I am looking for this perspective. Specifically, the use of a PMS. I started using Owner Rez, but my knowledge is just scratching the surface. And, you cannot pay for a "Master Class" of sorts with them. Does anyone know someone who is strong specifically with Owner Rez? Any insights are appreciated.

We use Guesty for our PMS, but I would recommend searching youtube videos for tips and tricks on how to use owner rez. I'm sure there are some great videos that could provide you with some good visual guidance. Hope this suggestion helps some. Feel free to reach out if you have any questions!

-Ben Scarborough

Quote from @Eddie Torres:

Just curious if anyone has any experience running a short term rental in a freelance type of way. Meaning you do your own marketing and booking without the airbnb or VRBO platforms? Is that even possible? Pros or cons? Any feedback is appreciated. TIA.

Yes, this has become significantly more popular amongst the more serious vacation rental investors this year. They are typically referred to as "direct booking" sites. We created our direct booking site utilizing our property management software (PMS). We use Guesty, but most PMS will have this capability. 

Another great technology to add to your STR is StayFi. StayFi is a security gate essentially that plugs in to your wifi router, and guests have to provide contact information to be granted access to the wifi. Their contact information can then be exported off the stayfi website and into your customer relationship management (CRM) software, which you can create campaigns on to drive more traffic to your direct booking website. If you have any questions or if there is anything I can help you out with, feel free to reach out!

-Ben Scarborough

Yep, not much more to add here based on the other replies... My one recommendation for all newer STR investors though would be to not run your numbers or base a decision on how well a property rented in 2021. Those will be peak numbers and are good to know what the potential is in a property, but it's much wiser to run your numbers based on 2020 or 2022 performance. Additionally, you should expect vacation rental performance to still be better than 2019 data in more popular vacation rental markets. If a vacation rental dominant market only has 5-6 airbnb homes listed on the market, I'd say that sounds like a pretty solid vacation rental market to buy in, because everyone else's rentals must be performing well.

-Ben Scarborough

Quote from @Joe Solari:

Hi I’m looking to buy my first time short term rental. I live in Massachusetts I’m open to any and all areas was wondering if any one could share some info or places you have had success in.

Thank you 

Hey Joe! Exciting to see you are interested in getting into the STR world!

To pick your market, I usually recommend that new STR investors begin in the mountains due to less seasonality issues. If you pick the wrong beach market and you don't have other people's money to work with, it is going to be hard to build a profitable business since majority of beach markets will only rent well March-October (some even less). Some big mountain markets I still like for first buys are Gatlinburg, Blue Ridge, and the Western NC Mountains. It is critical you are running conservative numbers in today's market though in bigger markets like the ones I mentioned, with a higher supply of Airbnb listings (Higher supply = lower demand). If you would like to check out a great beach market though, I work with investors in Gulf Shores, Orange Beach, and Fort Morgan on the Gulf Coast of Alabama and would be happy to give you some info on the area and let you know some of the advantages of buying real estate in Alabama.

Feel free to reach out if you have any questions, I'd be more than happy to help!

-Ben Scarborough

Quote from @Christopher Lynch:

My name is Chris and I am a new investor who is looking to buy my first of many rental properties. I live in Oregon but have no interest in investing in this state with the way the landlord tenant laws are here. 

I am primarily looking at Birmingham and the surrounding areas: Hoover, Homewood, Vestavia Hills, Mountain Brook, Meadow Brook, and Shelby County. I'm also looking at the Huntsville and Madison. I'm also open to areas like Tuscaloosa, Auburn, Fairhope, Mobile and Baldwin County.

I'm continuing to learn more about the areas and want to start talking to people there so I can get an even better grasp on the area. It's time for me to start "taking action" and make my investing goals a reality. If you invest in Alabama I'd love to hear about your experience and what your portfolio looks like in those areas! 

Cheers!

Hey Christopher, not sure if you may be interested in STRs or not, but feel free to reach out if you would like to learn more about the Gulf Shores/Orange Beach/Fort Morgan markets! Alabama is a great state to buy your first rental in due to the very low property taxes!

-Ben Scarborough